The a16z Show - Creators, Creativity, and Technology with Bob Iger

Episode Date: January 6, 2023

with @robertiger @cdixon @smc90A wide-ranging conversation with Bob Iger on the interplay between technology, content, and distribution; as well as Bob’s journey -- and that of various creators! -- especially as the industry evolved from TV and cable to the advent of the internet/ web 1.0 to 2.0 to briefly touching on web3 and other emerging technologies. As well as topics top of mind for all company and community builders: from build vs. buy and the innovator's dilemma, to managing creativity, decentralization, remote work, and much more. Subscribe to web3 with a16z: https://podcasts.apple.com/us/podcast/web3-with-a16z-crypto/id1622312549 Stay Updated: Find us on Twitter: https://twitter.com/a16zFind us on LinkedIn: https://www.linkedin.com/company/a16zSubscribe on your favorite podcast app: https://a16z.simplecast.com/Follow our host: https://twitter.com/stephsmithioPlease note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. For more details please see a16z.com/disclosures. Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Happy New Year, everyone, and welcome back to the A16Z podcast. This is your host, Staff Smith, and today I am delighted to share what I think is an incredibly relevant episode for this audience from our Crypto and Web3 podcast, Web3 with A16C. In this episode, Sonal Choxy and A16C crypto founding general partner, Chris Dixon, sit down with Bob Eiger, yes, the Bob Iger, longtime CEO of Disney. Bob draws on his learnings from working with top and emerging creators, including how to effectively deliver feedback, what it really took to close deals like Marvel, Pixar, and Lucasfilm, and even what it took for Disney to disrupt themselves. Having just listened to this episode myself, I can tell you you're in for a real treat. And if you like this episode, be sure to subscribe to the show if you haven't already. Just search Web3 with A16Z wherever you get your podcasts.

Welcome to Web3 with A6 and Z, a show about building the next generation of the internet from the team at A6NCrypto, hosted by editor-in-chief Sonal Choxy, that's me, and also with occasional co-host founding general partner Chris Dixon. In this special holiday episode, Chris and I interview Bob Iger, as we've been spending a lot of time thinking about what's next in media as enabled by new technologies. So it was an honor for us to sit down and chat with Bob in an intimate conversation, recorded in L.A. a few months ago. Bob probably needs no introduction, but after this chat took place, it was recently announced that he was returning to Disney. Still, just to highlight more about his background as relevant to this conversation,

as a longtime CEO of Disney, Bob was responsible for, among many other things, leading the acquisitions of Pixar, Marvel, Lucasfilm, and more. He also navigated questions that many company builders of all sizes face, like whether to build versus buy or how to navigate the innovator's dilemma and disrupt oneself. Bob was also previously the head of ABC Entertainment, and he is the author of the book, Ride of a Lifetime, which we referenced throughout this episode. As a reminder, none of the following is investment, business, legal, or tax advice,

please see A6NZ.com slash disclosures for more important information. Anyway, our wide-ranging conversation covers the interplay between technology, content, and distribution, and Bob's journey and that of various creators throughout, especially as the arc parallels the evolution from TV and cable to the advent of the internet and Web 1.0 to 2.0 to very briefly touching on web. Three, we also discuss business models like advertising and distribution models like streaming, and we end with a quick tour through emerging technologies like VR and AR, but we begin with the very top of mind topic of focusing on creators,

including the question of what's different about managing creatives. It's been 13 years since Disney about Marvel. Like, why can't the competitors, this has always puzzled me. They've got hundreds of millions of dollars. They can hire whoever they want. Like, why can't they replicate the success of Marvel? When I ran Disney, I always found that focusing too much on the competition was not healthy. It always created anxiety from me.

First of all, it's people. You have to choose the right people. And I'm not just talking about a director. That's obviously important because you don't get a good movie without a good director. But it's management to supervise. It's people who understand just to give you an idea. A lot of cases in movies, a movie studio will make a different. decision that they're making a film and actually slot it onto a calendar, into a schedule, and say,

well, this is going to come out in July of 2003. And off they go. It's very rare that a studio will say in the middle of the production process, this movie is not as good as we needed to be. We're going to wait. And so they force things into the marketplace before they are fully baked. Basically, it's a lack of commitment to excellence. And I'm a big believer in the relentless pursuit. of perfection. Steve Jobs a great role model there. And realize no one's ever going to criticize a movie that's great for coming out late.

But certainly we'll criticize a movie. If it's bad, yeah. If it's bad and it comes out on time. Yeah. I agree. And what happens with these companies often is they think about a movie's going to come out in a quarter and we have to make our quarter and we got to get the box office. And that's the tail wag in the dog. And also, like a lot of these execs,

isn't like the average relatively short. They're under pressure from Wall Street and the board. And they may not be able to even, if they want to even manage to a long-term vision. Yeah, I think that probably plays into it a bit. Yeah. But there's a whole other side, too, and that is the management of the creatives. I hired Alan Horn in 2012.

I remember the day he came in, June of 2012, and I said, I've got a really big secret to share with you. He thought he's coming at Disney to manage Marvel and Pixar and Disney. And I said, we're on the eve of announcing the acquisition of Lucasville. He said, you're kidding. I said, no. He said, that's the greatest thing I've ever heard. Alan Horn was the kind of studio executive that knew how to manage creative talent. And not just creative talent, but the talent that manages creative talent.

Yes, yes, exactly. Oh, God, yes. Which is you figure out how to insert yourself into a process in a benign way where you're looking over people's shoulder, but you're not making them feel paranoid. You're giving them advice on what to consider, but you're not ordering them to change things. you're being patient, and you're also understanding the anxiety that they feel, and you're not trying to build onto it or to exacerbate it. It's fascinating.

I engaged a lot in the big movies. I read scripts. I looked at early rough cuts. There were a couple of times I went into added rooms, very rarely, very rarely, because it just wasn't my role. But where you look at something and you have to give critical feedback to someone is a way to do that. Bob, actually, could we pause here? Because I want to ask you more about this because this was literally the part of your book.

I love the best. And the reason I think it's important for our audience as well is because I think a lot of technology companies don't actually know that they're creative companies first. And this is a huge shift that's happening right now. And so I want specifics on some of your lessons learn for managing creatives and creative management in particular because the point about feedback is literally one of my favorite points. So tell us more about managing. Creatives. Sure. The first thing you have to do

when you manage creatives is to put yourself in the shoes of the person who's the creator and realize the idea typically has come from within them. It's part of their

almost their fabric. It's who they are in a way. Not only they have a sense of ownership, but is very much tied to their self-esteem how they feel about themselves. And you can't dismiss that.

You have to really understand that. Oftentimes, executives try to exert their authority or show who's boss. You don't do that. It's not about that. It's not about coming in and having the big title. It's about trying to establish in the most sincere, genuine way, a partnership. I come in peace. I just want to help. I'd like to give you my perspective, not tell you what to do. I'd just like to give you some thoughts that I have about what you just showed me. Some of it sounds like common sense, but there's always ego on the line. Is it ego? But let me just play devil's advocate. Someone else might argue, well, we do have to make, you know, we have a budget, we have to make this schedule, and these creative people are running around. Listen, I do believe that managing creativity responsibly for your shareholders is really important.

You can't allow just want and spending or allow creators to take how much time they want. Some do. By the way, some have earned the right to do that. Jim Cameron's a good example of that. I respect Jim immensely. His next Avatar movie is coming out under the 21st Century Studios banner, but owned by Disney, because of the deal that was made in 2019. Jim Cameron makes movies on his own timetable.

You cannot impose your own calendar on Jim Cameron. You have to know that as a studio. And if you don't, then it's your fault. Then what happens ultimately is there's tension. What do you mean? I can't deliver it by this date. And then that relationship starts to rupture. You just have to know what you're getting into.

So there's that. There's also just how do you actually articulate feedback about creativity? I'd often find executives would think if they talked about minute details that the creator would think, wow, what a sharp eye that person has. They noticed this little detail in this image and this film?

Wow, the opposite is the case. To the creator, that's trivial. That's meaningless. What are you doing? What are you wasting my time telling me that the color of the sky is too pink or whatever? But I've seen executives do that

because they want to show that they're looking, they're watching. I like to always go in and be really big in terms of my thoughts. I think you've got a good movie and it's a great story, but it's not as digestible

or understandable as I would like it to be. Let me tell you what I didn't understand. I might have missed something, but let me articulate it. It's that simple, or the pacing is off for me. It feels a little slow. It dragged in spots. They may ask, well, was there a spot

in particular that you felt that? You have to back it up. This particular act, it's not getting too granular, but it's saying this is where I thought it slowed down. And often the creator will say, oh, that's interesting. I'm going to take a look at that again.

Well, sounds like you're giving authentic feedback as opposed to kind of fake expert feedback. Correct. Or just trying to use your authority. And actually letting the creative diagnose how to solve the problem instead of micro, like saying, let's do this, this, and this at that level of notes. The other thing you have to realize is know when to stop. When the creator has absorbed enough, has heard enough, they don't really want any of that, some of them. Some of them invite it. Some of them don't really want it.

But stop. And often I try to read the body language. And when I did stop, I'd say, you know, I have a couple of other thoughts. I'll send you an email. Or have Alan Horn do it. And then often, sometimes it's hard. You try to lead with something positive. If you could see the worst cut of the worst film and you don't know what to do.

The lights would come up in the screening room at Disney. And then invariably, I'd have to say the first thing. I think, oh, my goodness. How am I going to deal with this? But I tried really hard to say something nice first, even if it was transparent that I was doing that, because it just puts people at ease. And in some cases, it was great. Like, when I watched Black Panther for the first time, Ryan Coogler, who was not even 33, directed two other films, Fruitfail Station and Creed, comes in, and he's made this big film,

first big film you ever made. He barely knew me. He's obviously intimidated because of my title. I could tell he was nervous. And I had to say something first. And the first thing I said to him is, Ryan, I've got some things I want to tell you about the movie that I just detected or felt, but I got to say one thing, you made a great film here. And it's just like, oh, my goodness, you could just see the anxiety just pour out of it. And that gave me license then to say something. He's still euphoric. And it wasn't manipulative.

I truly meant it. But I knew that if I didn't put him at ease first, everything I said was going to bother. That was an earlier version of it. It was the very early version. It changed a lot. Interestingly enough, it was clear that the changes that we felt that could be made were going to cost money. There had already been a big debate about the budget of the film, I think, $175 million, and people saying that in all-black cast never resonated in certain parts of the world like China,

and therefore $175 million on this film is a huge risk. Well, we're not going to give the blue. black director a smaller budget to make this film. I felt very strongly about that. But I also knew that this was a great story you could tell in the script and it deserved the budget to become a great movie. And you also actually accelerated it in the slate. In your book, you talk about how you tried prioritizing that as one of the things that

could come out sooner, I think. I must say I don't remember the timing, but what I do remember is in thinking about the changes that could be made to turn this into a true, not only hit, but phenomenal film, it was going to cost money, and we were clear with him right away to spend what you need to make this better. The rest is history on that one. That's great. On the last note on feedback, the other thing you said, and this is a part that actually resonated with me personally. I'm glad you read my book.

I haven't read it in a while. I mean, I read the entire thing, cover to cover. It's very quick read. It was the specific details that stood out, and the one that really stood out to me here was not to be petty with your feedback. Like, you already alluded to this already when you said not to focus on minutiae, but I literally had someone call me like two weeks ago because a big tech company, they're launching a new podcast. And the first piece of feedback this person gave to her creative was, yeah, the music seems kind of off.

And I was like, that's literally where you started. That's probably the worst thing to do. And it was like so relevant to what you say in your book. Yeah, only say things that will really make a big difference. Well, the big visionary stuff first, which I thought was a really compelling thing. And sometimes the petty stuff never. There were times when I had a list that was three pages long, small stuff that I just can. Essentially, it's a little bit like my business.

business and venture capital where I have a rule where I basically never give specific product feedback to entrepreneurs. Oh, I didn't know that. Yeah, well, because I used to be an entrepreneur. These VCs would come in and they would say, you know, move this button. And, like, we had a person on the team who spent four months on the layout of that page. And the other problem, right, is that what you don't realize is a investor. Yeah.

Is that will then propagate down through the company. Exactly. And it really was just one person's opinion, but suddenly it becomes like a board mandate. Yes, exactly. And so, like, that's why I just don't want to do it because, sure, I have thoughts. But I don't want it to be seen as like an investor mandate, like the colors off. It's just silly because I'm not an expert on color. But it's interesting, though, conversely, having worked with Steve much as I did, he did believe that details mattered.

Yes. And that a collection of details, which can be small in nature, actually made a big difference. And so the question that is... But he's such a special... I don't know, the books where he's sitting in there going through every pixel. Yeah. Well, I remember he would take me to the... the Pixar Design Lab and take the blankets off the design tables and under the blankets

with the new products. And at one point, I think I might have described this in the book, but if I didn't, I've described it other times. He made me put my ear down to where the power cord touches the laptop. And it was then they were using the mag connector. And you could hear the click of that magnet and the click. And he'd be it about ten times. Both are ears down. There. Click, click, click. He says, you hear that? And it was clear as really making them feel good. But you're making a key point here, Bob, because there is a paradox.

You're right with how do you focus on details and not pettiness? And there's a difference between the two. And I think you're right, Chris. Like Steve Jobs is an example of someone who's earned the right to be focusing on minishe because he's such a visionary. The problem that I see with a lot of tech people who do this

is sometimes where people who come into a room, they'll sort of act like their visionaries like Steve Jobs, but they're actually not. And then they focus on the minutiae and you're kind of looking at them like, yeah, I don't really care. I think it's sort of... Steve earned the right.

Yeah. Yeah, and I think what you were saying, I guess I think of it as the feedback should sort of correspond to the person's expertise. Yes, exactly. Right, the person has earned the right. That's right. Because of experience knowledge,

and he's been proven right. And not just hierarchy. And not hierarchy. And not just throwing authority around. Exactly. I'm glad we talked about that. We can segue up to other topics before your guys is pivot

because later on we come to Disney Plus. Great. So Bob, you became the CEO of Disney in 2005, and you had had a career at ABC, and a long media career. Can you kind of give us a picture of what the media world was like at the time? Sure, it's really interesting looking back

because 2005, there were forces of disruption that were already impacting the business, but it was still relatively superficial. Web 1.0, and the internet growth that we were seeing by then was starting to have impact on a variety of different things, including consumer behavior, but not nearly as much, obviously, as we've seen. But it was clear that the promise of the Internet was vast.

And I think that there was anxiety that was just starting to build in the industry. And people running traditional media companies were being asked to be visionaries. And how were they going to, one, contend with that disruption. And two, really, how would they thrive in a newly disrupted world? My recollection was you had the really, obviously, the big kind of bubble in the 90s. and then you had the backlash, from my perspective in the tech industry, 2001 to 3 or 4. But by 5, I think Google might have gone public.

The downturn might have been overstated. And broadband penetration was increasing. Yes, exactly. And people, just use of new technologies, even though it really was not the era of mobile technology yet, but use of new technologies was growing like crazy, and people were spending time and money on those technologies. So you kind of knew it was important,

but not necessarily specifically how yet. Correct, but the board of directors of Walt Disney Company wanted to know when they were interviewing me to become CEO what my plan was. What would my priorities be? What would I do? And what I articulated was that I saw a world where technology was going to create a proliferation of distribution and really of consumer opportunity to access, consume by media and entertainment. And as I looked ahead at a world where there was so much more distribution, I also saw a world where there'd be a lot more production or creativity and a lot more consumption. I thought, okay, well, if the world is going to expand or even explode like that, how does a company like Disney play or really thrive in that world?

And what hit me was that great content, high-quality creativity, and branded content, would stand the test of time no matter what disruptive forces impacted the business. In other words, people would seek out best brands, best content, best experiences, no matter how they were getting them. And we should worry less about the distribution and more about what we were creating.

I always think of it, tell me if this is naive, but I think of there's an ebb and flow in the media business between the relative strength of content distribution. And so maybe one way of saying what you saw was that as the supply distribution went up, the leverage of the distribution side would decrease relative to content?

Well, what I was actually declaring was that there's an ebb and flow in terms of the debate, but there really shouldn't be a debate, that the content side would always win out. Okay. Creative, brilliant people is just a fundamentally scarce resource. We'll find their way to the consumer

and the consumer will find their way to brilliance no matter what. And we were way too paranoid about the forces of distribution basically ruining our business. And remember, cable and satellite was still growing like crazy. And then, of course,

there was a concern that the web browser would ultimately become another form of consumption and distribution. That's interesting. So another strategy would have been to sort of run around trying to own these different

new forms of distribution. You said no. I mean, obviously you'd do some of that, but your priority would be the content side. Well, at that point, what I declared, because there had been a debate at Disney for the decade prior, should we own distribution?

Should we invest our capital in that direction? I shut that argument down right away. It said, no, it's all about one thing, high-quality branded entertainment. And I described Disney, obviously, as just that, high-quality branded entertainment, but we had to invest

even more of our money, our time, resources, in that, because, again, it would stand the test of time. And interestingly enough, Walt Disney proved that in ways that were so obvious to us. He makes Snow White, in 1937.

And in 2005, it's still being consumed by kids around the world in the form of at that point. I think it was just DVDs, really. I guess Blu-ray was just coming into play at that point. And you think about that, you think, wow, that was only movie theater

distributed in 1937. It went through an era of TV in the 50s and the 60s, and then it ends up in a home video form. That's kind of telling. It doesn't matter what the technology is that's going to get that product. two people, it's about the product itself.

And so I made that case loud and clear. I articulated it as the company's number one priority, invest in high quality branded content, period. Can you break down? High quality means premium, like you spend a lot of money on it? Or just high, does that mean you don't, like you don't do low-end TV shows? Well, it means you tell great stories. Doesn't everyone, like, what do you not do? Like, doesn't everyone try to do that?

Isn't that? Everyone, I think, sets out to do that. But they don't create processes that result in that. I see. They rush things into the marketplace, meaning they don't take the time. They get impatient. They don't manage the creative community well.

They don't take risks on new ideas that sound odd but could be great. They don't know how to process failure in creativity, which is interesting because one of the things I'm seeing today is there's so much anxiety over transformation and disruption that companies managing creative processes are transferring that anxiety to the creative community. There's already basically an embedded anxiety.

Don't make it worse. So I just felt that there were ways that we could execute. So that's sort of a cultural operational kind of thing that you build into the company culture? Yes, it's very cultural. And so here we are in 2005.

I make that declaration. I look at Disney and see where are the deficiencies. One of the biggest was Disney Automation, which had powered the company. starting with Walt in 1923 when he founded it. And if you looked at the years prior, when Disney animation was great, the company was great.

Because it had such a massive effect on company perception, brand perception, of course, on commerce. And then the way Walt created the company was if you create great IP, it's leverageable in consumer products and in theme parks and music and et cetera and so on. Why had it lost its way, do you think? There were a lot of reasons.

There was a process problem. I could get really granular. You do have a great write-up about it in your book. I spent a lot of time on it. In fact, you had a great line, I think, which was where animation goes is where Disney goes. Yeah, and that was very true at that point. And so I thought, okay, number one priority,

under the umbrella of the strategic priority that it just articulately is fixed Disney animation. How do I do that? Great people. Where are the great people? They're all working for Pixar. We didn't have them. And then it just happened at the time

that a long-term partnership that Michael Eisner had created, which was a co-ownership, co-funding of their movies, was ending. And Steve, who having declared that Disney was over and he was done with them. So not only was Disney animation at sea, but the relationship with Pixar, which had driven some pretty good commerce for Disney, even though it was only then 2005, 10 years old, was ending. So I thought, okay, I got to get the relationship with Pixar back,

but I also have to fix Disney animation. The light bulb that went off was, what if we were, buy Pixar, which was a crazy idea because it wasn't for sale. All roads had to go through Steve. They were public and worth $6 billion or something. We paid $7 plus billion for it. I don't remember what they were trading out. They were expensive and relatively.

They were expensive. They weren't for sale. Steve owned half the stock. And they were unhappy with Disney. Correct. And they were really unhappy. And didn't your board even say, can't you just acquire John Lassener and like the talent? And you were like, yeah, that's not happening.

Just buy John Lassner. John loved Disney, but he didn't want to work for it. Exactly. And that's actually part of the point because the creatives didn't actually work for Disney at that time. They worked for Pixar. So what happened was I, in my first board meeting as CEO, after they chose me, I showed them 10 years of Disney animation failure and told them this had to be fixed because it conformed to my strategy. But I went through the process that I had gone through in my head, which is who do I identify to do it? And I said, well, roads lead to Pixar. I said, the problem is that we can't pluck those people out of Pixar. too hard, and they're not for sale. And if they are, it would be terribly expensive.

I think the board was so blown away by the craziness of the idea that they didn't say yes and they didn't say no. They just felt, this is so crazy, it's never going to happen. And I read that as what I call an amber light, which is they're not putting a red light in front of me, don't do it. They're certainly not putting a green light in front of it, do it. But again, I think because they were just so shocked at the thought, they weren't really focused on how are we going to contend with this.

Of course, in my case, I had a head of steam. I was a brand new CEO. My wife told me I wasn't going to last more than three and a half years if I didn't do something really bold, which is good advice. So I picked the phone call Steve Jobs with a crazy idea. That was in October of 2005. And we announced the deal, I think, in the first week in February, just a few months later. How did you fix things?

I was lucky, really lucky. Before I became CEO, I spent some time with him. I didn't get that far because he just viewed me as, one of the Disney bureaucrats. But I at least showed him interest in curiosity in Apple and what he was doing. And before I made the call on Pixar, there was a six-month period where I was named CEO when I was waiting for my predecessor, Michaelizer, to leave, which was planned. I called Steve, and I said, I have a crazy idea, my first crazy idea.

And that was to create a television version of iTunes. He had created this with almost find every song that you ever wanted to find in one place. I thought, why don't we do that with TV shows? Why don't we go back to I Love Lucy and you name it? Put all TV shows in one place. And that point I'm thinking about basically web distribution. I was not thinking about any mobile distribution because the iPod at the time didn't have a screen on him. He then said, I'm going to come down and see you.

He comes down and takes a prototype of the iPod. with a video screen on it, shows it to me, which in a way was the precursor to the iPhone. There's a potion-stamped screen on, and he said, you see this? I said, yes. He said, this is a screen. I can tell.

It doesn't just show the name of songs. It'll play video. If we put this out, he was already playing to announce it, would you put your TV shows on it? I said, yes. In five days, we made a deal. He could not believe that a traditional media company would be willing to disrupt itself so much

by taking shows lost, Desperate Housewives and Grey's Anatomy and putting them on the video iPod. And I think that changed his perception of me tremendously. Because one, I cut through all the red tape, got a deal done. Two, I showed a willingness to be future-oriented and willing to disrupt ourselves.

Three, I was interested in Apple. He knew I showed him playlists. We started talking about music. We hit it off. And then when I called him about the Pixar acquisition, he at that point was viewing me as a much different executive than he expected. So we bought Pixar. I assigned the people who ran Pixar, John Lassner and Ed Catmull,

to run Disney animation with a goal to turn Disney animation around, which if you look back on what they did, it's just extraordinary because it was Moana and tangled and frozen and Zootopia. Because those were Disney, but under Pixar, under John Lassel. Some of them were not even gestated. They were developed by them. Some were in an early pipeline, but very early.

So you bought them and then put them in charge of Disney. And they come down every week and turn that place around. And so they started to do that. And we also proved pretty early on that we were good stewards of Pixar, too. That one, we were benign. We wouldn't do any harm. And two, we were incredibly supportive. And most important was we were respectful of their culture.

and that's really important when it comes to creativity. Yeah, exactly. It was a different creative culture than Disney? Highly. Not even close. Not even close. Very creatively. And that's why you didn't try to fold Pixar into Disney animation?

Correct, although we ended up adopting a lot of Pixar's creative processes at Disney. I'll just give you one example. At Pixar, every movie that they made was basically driven from the idea of a director. Director pitches the idea. Pixar says, we like your idea, go make your movie, they go and make the movie. There's a passion that exists deep within inside that director that is evident in every single step of production and creativity of that film from when it just starts to basically be born

to when it starts to grow and be shared with the world. At Disney's case, we assigned ideas to directors. So a director would be brought in to direct a movie who was someone else's idea. And the connection didn't exist, the passion didn't exist. That's one. There were other little things, even logistically. at Pixar, every movie got assigned a room.

Basically, a nice conference room. The movie lived in that room full time. The director and the team put pictures up all around the walls, had music that was referenced to the movie. They did all of their meetings about the film in this room. The movie started taking on kind of a tangible quality of actually existing in a space. We were at Disney, we had one room that all the movies shared.

One movie comes in for a few hours, has a meeting, does something they move out, another one comes in. That's subtle, really subtle, but a sense of place and home and collegial feeling. I mean, I had gone up to Pixar. I could not believe what I saw. I go into the Wally Room and the Up Room. One day, I see Ratatouille, Wally, Up, Brave was another movie they made.

Two others that I went into rooms, the movies never got made. One was about a blue-footed nude that was getting near extinct. And the other one was about pets that lived in a building on the Upper West Side of Manhattan that didn't get made. Interestingly enough, I still remember it so well. By the way, it was so obvious to me. The film that feels like it has a home and the people that, first of all, they become part of the film. Yeah. There's a sense of place.

It starts actually to become, I use the word, tangible. It comes to life. I don't think I've ever really told that. I love that. So anyway, then I looked at their technology platform, and they take me through not what they were. using to make CGI films then, but what would be the next generation of them. And it was shocking to me what they showed me. They started off as a tech company, right?

Yeah, Ed Capnell's computer scientist. And they showed me a technology that enabled a director and a team to edit through space and through time in ways that were vastly different than what I had seen before. Essentially, it was an ability to change an image, a very, very specific image within it, and the overall image. And the change that was made would basically apply. to the whole movie. It was plucking something out

a moment and that hadn't existed before. Like find and replace for like an animation which seems completely cutting edge. And it was cutting edge. It became the next generation of Pixar technology. So you can imagine just how blown away I was by all of this.

And then when it worked, we closed a deal for them in 2006, success through 2009. If I remember correctly, cars and Ratatouille, We're at a Tuane Card and Wally and Up. Just amazing stuff. Original ideas.

Interesting. And then, so then after that was Marvel? Well, we had had a process at Disney where we looked at potential acquisitions. We basically called it an acquisition filter or sieve with definitions of what we might want and what we wouldn't want and what would be left, what would make it through the filter. And there was a list of things that made it through. And one was Star Wars or Lucasfilm. One was Marvel.

there were a few others at the time and so I looked at the team and we thought okay you know what's next and interestingly enough my first thought was Star Wars and I knew George Lucas well Steve knew George very well because he bought Pixar from George people forget and we didn't get a chance to schedule a meeting with George

because Steve was sick and this is 2009 when he had his liver transplanted so we put that on the back burner to wait because Steve wanted to meet with George and I to talk about it. So while we're waiting for that to happen, I spent months trying to get to the head of Marvel. And in June of 2009,

I walked into Marvel's office in New York alone, pitched the idea about buying Marvel, told a Pixar story, ultimately got Steve Jobs on the phone to tell how great the relationship had been, offered Disney stock, which was, I had proven already to Steve, how valuable that could be.

Steve got Disney stock at $28 a share, $135 million shares of it. And we ended up closing a deal for Marvel announcing at the end of August in 2009. And then we were off to the races there. And did you have, I mean, there were obviously superhero movies like Iron Man, but it was nothing like today, right?

Like it was not... They'd only put one movie out, Iron Man. Yeah. And that gave birth to got a slew of things. Interestingly enough, I was never a comic book fan. My dad wouldn't let me read comics because I thought they were frivolous. But I was aware of the passion that people had for comic books. And in the process of considering Marvel,

I studied the business pretty closely. And the one thing that I realized is that the stories that had been told already were so voluminous. And over years, well, this is interesting. There's a treasure trove here. Because some of the outsiders who were critical of the deal,

said the company's already licensed a bunch of the characters, right? Well, so what was licensed was Spider-Man was licensed to Sony. An Iron Man had been made by Paramount. Yeah. And Universal had Hulk. That was it. But then when we did the due diligence,

First, the team said there were 5,000 characters. He said, wow. Then they came back and said, no, sorry, there are 7,200 of them. So I thought, well, it has to be characters that are as good as some of these others or in the right creative hands, we can make them good. I just thought, okay, if you can make a good Iron Man and a good Spider-Man, you can make a good Captain America. We weren't thinking Captain America.

We weren't thinking Thor. We weren't thinking Captain Marvel. We weren't thinking Black Panther. We weren't thinking about any of these characters, Guardians of the Galaxy, which existed, came from a whole other group of characters. Let's tell great stories. And like Pixar, they had a core creative team that was really impressive, led by Kevin Faggy who's still at Disney.

I always thought, this can't just be about an acquisition. It has to be about your ability to execute, and that's people. And creating a culture that enables them to thrive and giving them the resources, which includes not just money, but marketing support and distribution help and bringing things to market. it in a much more impactful way. So trust the creative team

at Marvel, give them basically as much fuel as they need to make great things. And the next thing, you know, they come in and they pitch this wild five-year plan where we're going to introduce Thor, Captain America. This is the MCU. Yeah.

The whole Marvel universe. And they make individual movies, each of those. And then we'll put them all together in one called The Avengers, which had been a comic book. And the rest is history. Just to pass there for a quick moment, just to give the listeners context, this is very different than Pixar in a few ways because in your book you describe how not only does Marvel have its own characters, but you made a very honestly kind of amazingly controversial decision not to co-brand that as Disney overtly when you put the movies out. So I think that's kind of important context there. These weren't just superhero movies. These were Marvel movies.

And it was putting a spotlight on the Marvel brand, changing even the look and feel of the logo. and reminding everybody, Captain America is Marvel, so that you build the brand with the characters and the stories underneath it, which gives you the license to try new characters and stories that you say, that's how you get to do Guardians of the Galaxy, is it something crazy and new, but people know it's Marvel. Exactly. And so they go see it.

Black Panther, another great example of that. This is Marvel's Black Panther. Yeah. The second big contrast between the Pixar deal and this one is that Pixar, where you did outline a case to your board, that this brand is actually outpacing our brand. Like people actually think about Pixar before they think about Disney.

That wasn't necessarily the case with Marvel. With Marvel, it seemed like there was more of a, like, how does this even fit? Is this even Disney? Interesting, because Marvel had been considered as an acquisition by Disney in earlier years when it was considered too edgy. And I thought, well, that's because people are thinking

that has to be Disney's Marvel. Let Wall Street think of it that way, but not the consumer. I felt that Marvel was another Disney and that we shouldn't worry. Again, I wanted the value generated to be considered by Wall Street. It didn't matter whether the consumers knew whether it was owned by Disney or not.

The same thing is true, by the way, with ESPN and you can argue ABC News and other brands too. It just didn't matter. Strengthen that brand, and then end up with a collection of them and let each basically consumer of those brands know exactly what they are, find them, don't make it all convoluted.

So continue your thoughts. So the next thing that happened is I went back to that acquisition filter, and there was Lucasfilm still sitting there with Star Wars. And Steve at that point was really ill. He died in October of 2011. So the dream that he and I had had about having lunch with George Lucas was over. I went down to Orlando to reopen Star Tours attraction that we had redone, which I wouldn't normally have done, but I knew George was going to be there. And I thought, this is my opportunity.

and George and Melody Hobson, who was then his fiancé and I had breakfast, and I broached the subject with him using Pixar as a great example in Marvel. And he says, I don't like comic books. He was not a comic book fan either. He and I had a great relationship going back to him, making Young Indiana Jones for ABC. And he said, well, if I ever sell, I'm not ready to sell, but if I ever do, I want to sell to you. And I let that go. I dropped it.

I wasn't going to put a hard sell on him because I knew that wouldn't work. And I waited, and then he ended up calling me some months later and said, I want to talk to you about that idea. Clearly, I had struck a nerve of some sort, a positive one. And that resulted in a deal that we announced in 2012. So we ended up not just with Disney and ESPN and ABC, but we ended up with Pixar, Marvel, and Lucasfilm, just like that. We had more known brands known for their quality of storytelling

than any other media and entertainment company in the world. Were there ones that you wanted to acquire that never happened? The ones that got away? Oh, I had a list. Well, one, James Bond, but I never even had a meeting on it. Would have loved James Bond. Harry Potter was already gone to Warner Brothers, so they ended up getting the right,

something obviously Disney should have done but didn't. So beloved brands where there's expansion possibilities? Exactly, where, you know, I always tried to envision our theme parks and could I see a Marvel world or a Star Wars world or a Toy Story world and all exist today. So then after Lucasfilm, so that was 2012, what was sort of the next big strategic priority? What was interesting was I felt at that point,

maybe we don't have to do anything. You know, we have such a great hand. And I actually spent 2012 to 2016, I spent an inordinate amount of my time developing Shanghai Disneyland, which was not only a pet project of mine, but I thought an incredibly important project for Disney in its future.

in terms of planting a flag on mainland Chinese soil. So we did all that, and then, of course, the winds of change got even more fierce, as the Internet 1.0 gave birth to the era 2.0 and app-based entertainment, new forms of distribution, and that ultimately started my thinking about streaming. But during that period of time, it was very, very clear that the disruptive forces

that I talked about seeing in 2005 had gotten much more profound. And we're starting to impact the entire business. And what we were seeing was not just the disruption of distribution, but disruptive distribution disrupting essentially almost every area of the business, monetization and advertising. Is that mostly Netflix? That was sort of the standard bearer?

It was mostly Netflix, but it was very, very clear that what Netflix was doing would be done by others, by well-financed. So they were at the frontier, but that was going to be the shape of the industry. They were showing the way, particularly for the big tech companies. And what was also happening is the consumer was starting to exert more and more authority. You know, one thing we've also seen over this period of time, actually you go all the way back to the avon to the remote control and television, is that technology is giving consumers much more authority and power than ever before.

Switching costs are so easy. Switching costs between channels, between devices, but impacting time. When do I watch something? Where? Where do I watch something? How? On a fixed device on the wall or on your mobile phone, all of those things. And starting to impact pricing as well, but also starting to have a huge impact on linear television watching.

I don't want to watch program linear channels. And I don't really like the user interface that cable and satellite is giving me. I love being able to watch programs. And I love being able to watch app-based programs going back to the development of Web 2.0, which, you know, I think apps have proven already that for a consumer, they're just fantastic. It was a fantastic development. And that's authority.

I don't want a channel. I want a program. Give me a program. Boom. Move a cursor over an icon or however. You got it. So I felt, because Disney was so heavily invested in linear channels, ESPN, ABC, Disney Channel, go on and on.

I worried that that business was going to be replaced by app-based entertainment, and we had to be there. And we had been the first movie company to license movies to Netflix. Yes. And I realized, wow, what we've done. Well, because Netflix, I think of Netflix

is a three-act story, right? It was first the DVDs in the mail, and then it was internet distribution, but mostly licensed content. Movies. Mostly movies. Yeah, movies, like from companies like Disney. And then the pivot into original content.

Disney first. No, sorry, I mean Netflix. For Netflix, yes. I know Dizzy was the first to license contact. And then you guys pulled it, and I have to say, I was pretty pissed when that happened because I was really mad. I was like, I want to watch my shows on Netflix, and you guys took them away.

I didn't know, of course. What hit me was, I joke about it often, is we were selling nuclear weapons technology with a country. You were starting to build nuclear weapons to use against us. I mean, I think people just didn't think Netflix would have the capability to do that, right? They didn't think they had the money. They just didn't think they'd have it. And I think they proved to me anyway that they did.

I thought, okay, we've got to go into that business. Because if we're just going to license to them, they're ultimately going to disrupt us fully. Why was it so obvious to you that that was a future? Yeah. That was very bold, actually. One, as I was a consumer, worked for me. That product worked for me. Second, I was tired of on every single earnings call answering the question about what the future of cable and satellite television was.

And I didn't really want to deal with it anymore. I thought, well, the only way not to deal with it is to say, well, that's not really where our future is either. Our future is somewhere else. We're going to redirect. We're going to change the future. Did that go back to your original? Because your original vision when you became CEO was content is king. Distribution will just be everywhere.

And so when you saw streaming, you're like, this is the distribution vehicle of the future and paired with our great content. Well, I knew that our content would thrive in the new distribution world. That was your thesis originally. You would be sort of a distribution-agnostic company because you had such great content. And look, Netflix proved they paid more money for a movie. than anybody had ever paid. And then anybody was willing to pay at the time.

So we used to license the HBO and Stars and Showtime. Netflix blew them all away. So I'm thinking, well, that says a lot, really. And then I thought, we'll be fine continuing to license to Netflix. That goes back to the argument, high-quality brand and content. They demanded it. They were lusting for it. But I thought, now we were entering a new technological era,

where the customer and a customer's relationship with the company is potentially value-creating. Meaning, if you can strengthen that relationship, you can improve the value of your relationship with a customer. If you look at Disney in 2016, 17, when we started really talking about this, the movie theaters owned the customer for all of our movies. So there were great Marvel, Star Wars, Disney fans, Pixar fans,

but the tickets were being sold by Fandango, movie theaters. We had no idea who was watching our movies. Then we'd put the movies on cable and satellite and Netflix. We didn't know who was watching there. We'd sell consumer products. We'd sell thousands of Spider-Man costumes for Halloween. Walmart and Amazon would know who the customers were. Other than our theme parks, we had no customer relationships. We had all this passion, the greatest fans in the world, Star Wars fans, my goodness. How passionate are they? We had no idea who they were. So I thought, okay, we're losing.

There's a value proposition there that we're not participating in. So it was, I know our content is going to work on a new technology platform. I know that if we control it, then the customer will be ours, and we can create a deeper, more intimate relationship with them. And it would also give us the ability to wean ourselves of basically our reliance on cable and satellite. I have two questions here. You know earlier when you were saying that you had this very strong belief that content trumps all tech? Everything.

Everything. Distribution tech, everything. Did you ever doubt that for a moment when you saw that Netflix was doing? Because there was a point where I doubted it as a consumer because I would lazily comfortably watch Netflix over anything, even if it was bad content, just because it was so convenient. Well, I knew what our movies were doing on that platform. They gave us some indication how popular they were. Got it.

They didn't give us too many details, which by the- the way spoke volumes too. Yeah, you don't get the data. I knew that Disney animation, particularly musicals, was huge on Netflix. Oh, okay. And so I never doubted that ultimately creativity and quality and brands would matter more. And it's interesting if you look at today's world and you look at all the streamers that are out there.

By the way, there are haves and have-nots, and the have-nots are going to fall by the wayside. What do you mean by the have-nots in this context? There are streamers that are not going to survive. There will be blood, to quote the name of a movie. They're not going to all make it. And the reason is that there are some platforms that don't have the high-quality branded content. They don't have enough of it.

And they're not differentiated. So not all streamers are created equal. And then the other question, did you ever have concerns or doubts or fears about being able to shore up on the technology side to pull off streaming? Yeah. To tell us more about that.

Read Hastings from Netflix, try to convince me that there's no way we could do it. You won't have the platform. You don't know how to manage things like busted credit cards, all the issues with geo-targeting, and there's so many different factors that we had no ability to do any of that. So after I articulated the desire to go into the business, we then had to figure out how we're going to execute that.

And there were a few impediments. The biggest impediment was we needed a technology solution to do so. Right. But the other impediment was that we were making all this money from other forms of distribution, including licensing movies to Netflix and cable and satellite subscription fees and advertising, that in making this pivot, we were going to have to convince Wall Street

that it was essential for us to disrupt ourselves, the innovator's dilemma, it was essential for us to reduce revenue in order to go in this direction, which means telling Wall Street, okay, you've enjoyed all this great profit growth for Disney over would have been a decade, that's now going to go in the opposite direction.

That was hard. But on the technology side, we immediately started hunting for a solution. Yeah. And it was one thought that we should build. And I was told, half a billion dollars, five years. And I said five years is an eternity. Because I thought this change was going to happen fast.

So we don't have five years. We have to do it faster. And then Kevin Mayer, who was running strategic planning for me at the time, started looking for opportunities. And we invested in a platform that Major League Baseball had created called Bamtech. and by investing we had a path to ultimately buying control, and that became the solution. Ah, interesting.

One quick thing around the Strap Planning Group and how you decentralized, you had this amazing narrative, and that was actually one of my favorite things in the book. I mean, I don't know if this is the point of it, but you have multiple examples of how Disney and ABC before that had to sort of decentralize its own decision-making. And I want to ask this question for our audience

because a lot of people who are in crypto and Web3 think about decentralization first, Do you have any thoughts on things that you might not give up or things that you would if you were to go through that again? Well, I think sometimes decentralization is misinterpreted to mean anarchy, and it can't be that. Pushing down decision-making and empowerment and a sense of ownership into organizations is important, but as long as it generally conforms to what leadership expects or other constituents expect and want, and there's a very careful balance. I felt, for instance, at Disney that too many decisions were being made centrally, and there

wasn't a sense of empowerment or ownership. And some people who knew more about their businesses than any central organization were being deprived of the ability to apply their knowledge. So it had to change. That said, I felt managing the brand and its qualities, its attributes, had to be done centrally and consistently. Yep. The other point besides the technology, you brought up in your book, which I thought was

super interesting here, is that you also had to show. shift the company's organizational structure and mindset. For instance, when you went from licensing revenues to subscribers as a metric, that's a really interesting example because it reminds me of what happened in tech when technology companies went from selling software to going to software as a service. They had to shift their entire orgs chart, how sales were done, how everything was done. I mean, at a company, particularly a successful company, every single thing is designed to protect incumbency. Everything. It's compensation. It's the relationship with investors. It's how executives are being measured. What is the definition of success? If you're running a studio,

the definition of success is what's the box office? Well, suddenly you're saying, oh, we're going to take some of the movies that you're making. We're not going to put them in movie theaters. We're going to put it on Disney Plus. Box office goes away. By the way, that lack of measurement of success also transfers to the creative community. How does a director know or team know their movie is successful or not, or creator of a TV series knows about rating, makes something so that it gets high ratings, that goes away. It's no longer about ratings. It's about other metrics. It reverberates throughout. Yeah. It's very, very hard. So the innovator's dilemma is very real, very tangible. I faced it head on. And I learned

kind of the hard way, because I sort of took the flag and decided to carry it up the hill. And it was a steeper, longer hill than I thought it would be, and counted resistance throughout. But in the end, I had fortunately, because of the success of those other acquisitions, and the fact that my strategy articulated in 2005 had worked, I had built up a lot of trust. Yeah. Not just among the Wall Street community, but the board, and in particular my senior team. And so it's nice when a leader has the trust of its team, even though it may not feel right to them because of how disrupted it is to them. If this guy says, this is what we're doing, and I promise it's going to turn out all right,

they believe you. I think, yeah, I mean, I think it was interesting is, like, I don't know when it was five, six years ago when you first did the pivot. From the outside, I didn't know you, I would have assumed Disney would not take the new tech seriously. Like, that's been a successful assumption in the tech community. So just take retail as an example, right? So Amazon against Barnes & Noble, against JCPen against Sears, now Walmart.

And you can pretty reliably predict that the incumbent kind of non-tech competitors will make noises but won't ever really go all in. Right. Right. Like, it's a pretty good assumption. For example, in retail, Amazon continues. I would argue even places like Walmart just never really go all in, right? They're not really willing to give up on their sacred cows. And I didn't know you, but I assume the same thing.

Oh, here goes Disney. We're going to see another Walmart. Oh, you of little faith. And actually, and let me take that further. the one exception in my mind is founders, founder CEO. So, you know, if you look at, I would argue Facebook, you know, Facebook is the only tech incumbent right now that's taking Web 3 and VR and other new areas seriously, and the rest I think are kind of not as much.

And that's because the founder both has the vision, but also the gravitas. But you weren't a founder. So I think you might be one of the few cases of a non-founder. Non-founder CEO taking on the Innovative's dilemma and succeeding. Didn't Disney Plus just pass Netflix and subscribers? Yeah, global. subscribers. Well, I appreciate the compliment. Going back, one, I've strengthened my conviction. I believe there's a right thing to do. Had the credibility. And the fact that you'd already had success maybe

helped, right? Had you tried that first? Would it have been? No way. Yeah, yeah. The other thing that I was fortunate at the time to have is the board supported me. Not only did they support me, they exhorted us to do it. They actually made you go faster. Is that because they trusted you or they saw the same vision? Well, a couple of them had the same vision, and they trusted me. I don't know that they were as convinced as I was that we'd be able to execute well, but they wanted to give me that chance. In fact, they came back. I pitched the whole thing to the board.

They had an executive session to talk about it with management out of the room. They came back, and one of the board members who communicated what the board had, the sentiment of the board during the executive session said, speed is of the essence. Go for it. And then I did something that, in hindsight, turned out to be more valuable than I ever expected. I met with some key investors that I trusted. that had followed our company and our business.

These are like mutual funds. Yeah, fund managers. One of them was Will Danoff from Fidelity. And the advice that Will gave me and that others gave us as well was if you're going to do this, go all in. And to your point, Chris, about some of those other companies, they don't have the ability to go all in because going all in is a serious step. It's money, it's disruption.

The key thing you have to forego money, right? You have to stop, probably kill revenue. We told Wall Street we were going to depress our earnings by $2 billion the first year. Yeah, those really hefty licensing fees that Netflix gave you actually backfires at this point. They went away. They stopped. And not only that, we spent more money on production to get ready for the new platform. Costs went up, revenue went down.

Usually when you're running a company, that's not what you try to do. But the street said, and it was so important that we did this, do it. Be serious about it. Go all in. And I thought, wow, okay. So talking to them was important both to hear that, but also to share your message with them. So they understood how to think about your stock price?

Well, yes. I wanted to set it up with them in a way that would have them appreciate the opportunity that we had and the reason why we had to do it. So it was the relationship with the customer, leaving too much money on the table, the disruptive nature of the new streaming platforms on the linear channels and linear television viewing, all of those things. So that when they heard it, when we first announced we were doing this, the stock shot up.

You were saying, oh, we're going to destroy our profits. Boom, the stock goes out. That's amazing. It was just amazing what the reaction was. And this all led to an investor meeting. Because this now goes all the way back. When we showed the street what we had developed, this is an April of the United States. 19. We launched Disney Plus in November of 19. Up on the screen comes Pixar, Marvel, Star Wars. Now we've bought

21st Century Fox and The Simpsons National Geographic, Avatar, go on and on. And everybody says, wow, okay, this is a destination, meaning literally an app, that I'm going to want because it's got all this high-quality brand and entertainment in one place for a great price. And now we've got to technology to do it. Now, talk about a nail-biting moment. We launched in 2019, and our plan was for four to five million subscribers in the first year. We signed up 10 million in 24 hours. And if you don't think I was nervous about the technology, but once it did, we're off to the races. It was those 24 hours. It's good that you bought that. You bought Bamtech, I think. Yeah, instead of waiting five years to try to build it yourself and maybe not even have it work as well.

Yeah. I had the luxury of having many great days in the job and exhilarating days. That 24 hours launching Disney Plus and getting the $10 million. Was that one of the best? It was sky high. Well, I'd love to hear. So, pass forward to today to streaming. I think I'm not a deep observer of it, but it seems there's multiple kind of competitive platforms now. I think most people probably do see streaming as the future.

How do you think that will play out? Streaming wins. Over a linear cable. A linear cable and satellite viewing is marching to the edge of a great precipice. And I happen to believe that with generational shift, meaning baby boomers being replaced, and it goes over the cliff. It goes over the edge. Not necessarily news.

So in that world, it's streaming and then mobile phones, kind of social media, is the sort of the two kind of dominant forms of media? Yeah, absolutely. So I think streaming wins, not all sorts of. streamers win. It's not for the faint of heart. It costs a lot of money and make great stuff and maintaining. But streaming, we should think of as the premium high-end experience. And will we also see new models like ad-based models? It's interesting because among the factions that are feeling anxious these days, advertised

as one of them, but I'm actually convinced that viewers, consumers will tolerate ad interruptions for lower prices. Partially, I think, has to do with inflation, but it also has to do with the fact that consumers want more than one streaming platform. And in order to afford more than one, they'll take ads to cut the cost. So all the services will have kind of multiple tiers, like the way Hulu does? Yeah. I think that's a good thing. I don't know what Apple ultimately does, but yes, Netflix has announced they're doing it.

It'd be interesting to see ultimately what Google does and YouTube and whether they go into the space. I think right now the only thing that's really preventing them from acquiring content creators is regulation and fear of basically antitrust, whether it's in Europe or in the United States. So advertisers win. Linear TV goes away. No one wants to watch channels anymore except maybe news and sports.

Power of live and big events will exist. Won't sports move to streaming at some point? Like there's this tangle of existing deals, right? But at some point, that works out. Correct. And I don't know how long that plays out. Bob, feel free to give us more of your predictions as many as you're comfortable making. What else would you like me to predict?

Movie theaters. Movie theater going. will never return to its high watermark. So it'll still be a thing, but it'll be kind of this niche activity. I don't know what you call it niche, but the reason for that is greater competition from basically movie quality television

that can be watched in the home. And everything about the home experience or the out-of-movie theater experience is pro-consumer. Mobility, basically... Convenience, time, customization, personalization. It all is moving in the direction. of giving the consumer more authority, and they're going to use it.

What do you say to the critic, like if you read the art critics who say that all of this has the quality of films, that you just have superhero movies and you don't have, I don't know what, the... I'm just laughing at Martin Scorsese's time. Well, you still have the Morton Scorsesies, but do you have the next generation? Yeah, Martin. Martin did nail us. He and I talked at one point.

I like him a lot. Well, first of all, I think we're ignoring the fact that the creativity right now that exists in what I'll call television. Yeah. is phenomenal. Vast. It's incredible. So this is a format change, not a loss of crazy.

Exactly. A lot of the shows that I watch, they're not multi-season. They're one season. It's four or five episodes, six episodes. Sometimes you watch a slew of episodes. You don't even know whether it's coming back for another season. But it's great storytelling. And you can watch it all in one weekend, all at once in one sitting,

or you can play it out over weeks. So I think, look, if you really want me to predict, the other thing, I said, advertisers are going to prevail, will prevail, consumers will prevail, creators will prevail. Yes. It's a great time for creators.

They're anxious now because of disruption in how they get compensated and how they get measured what they created. That two shall pass. And it will be figured out and they will have access to more consumers, more shelf space.

There's more shelf space for creators to create on. I started a time when there were three TV networks and movie theaters. That was it. Now look at the world out there for creators. It used to be, by the way, if you had made movies and you turned to TV, you were like pariah. Yeah. You know, you've come down a lot.

That's not the case anymore. Great movie makers are making plenty of television. I would argue about TV and how it's great right now. That's also because in TV, the creative, the showrunner is prime. And that's a very different model than a lot of what's been playing out in the past with, like, movie structures. And I think it actually reinforces your point that it's about the creator's vision. or even like the Pixar vision of like the director vision first. And when you're describing going to Pixar,

the big difference between assigning and having a person have an idea that they pitch is that person has a vision for what they want to do with it. That's a very big difference than someone walking in, turning around a situation. There's a very similar parallel between that. By the way, on this very subject, the other thing Pixar did that was quite interesting is that before the executive team came in to critique a film, all other directors critiqued.

the film. Oh. So they'd go in a room with all the other directors and have a, oftentimes, viciously honest. That's interesting. You would get essentially critiqued by your peers, people who had had a lot of success on their own. And at times, I'm told, it was never in one of those sessions, but it got kind of heated because they were unfiltered. But you're getting it from another creator, not some executive with a big title. That's funny because we had this debate in because I created a channel that's editors only for precisely this reason, because editors to other editors, there's just a respect when you have skin in the game. It changes the dynamic when anybody else is in that room.

Because you have this respect, creator to creator. And interestingly, earlier you were talking about the M&A strategy to Chris's question. The point that I think really struck through for me is that creatives draw other creatives. Because one of the reasons you were able to go from Pixar to Marvel is that you can, could say, well, Pixar, we've successfully acquired them. And similarly, early in your career, when Spielberg and Lucas are engaging with you because you took a risk on Twin Peaks, that's the message to me there, is that creatives don't want only, like, a suit in charge. And by the way, creators love executives that have the courage to take big risk. They love that. You want to work for

someone like that. No, it's great. I agree. And then, Chris, to your earlier point about the startups, there's an interesting connection here because when you said, like, as VC's, your kind of picking this person to invest in their vision. I agree. What do you think is going to play out with the content strategies that all the streamers are working on and executing right now? I mean, you covered tech, you covered the creatives, the rise of, you know, streaming is going to win, advertising is going to be there no matter what, all these trends. What do you think is working, not working out there?

Well, I think it can't just be about volume. It can't just be about filling your home screen. with rows and rows and rows of product, I think you still have to be choosy. In other words, you have to apply a little bit more editorial judgment than what gets made. That's a big difference, I think, between Disney Plus and Netflix. Netflix is you've got a zillion things.

Yeah. And there's some original content, but it's all kind of mixed together, where Disney Plus is very kind of premium, right? I don't really want to speak for Netflix, and I certainly don't want to be critical of them, but it wouldn't surprise me if they reduced volume. Yeah.

The other thing to look at, because if there's sub-based, isn't going to grow significantly, and they can't price higher very easily because there's more competition and there's inflation, then buying rights in perpetuity may be an issue. And not everything has forever value. And so it's going to be an interesting thing to watch licensing or buying these things for shorter-term usage. And then it'll revert back to the creator, and the creator and the creator will have an opportunity to sell to others, which will be a good thing for the creative community. On the IP side, you know, you have so much experience on this.

And a lot of our founders and creators are thinking about, like, new ways and creative ways of extending IP, building IP. Do you have any thoughts or lessons learned when it comes to the IP game? Well, I think if you create IP that is consumed and appreciated and understood, valued by a consumer, don't whipsaw them. Don't change it too often. Maintain a consistency. And including when you innovate with that IP, when you change it, because I'm a big believer in respect versus reverence, because the world changes. Even IP has to evolve.

Mickey Mouse doesn't look the same as he did in 1928 when he was created, but do so in a measured and a user-friendly way. Suddenly everybody wakes up and Mickey Mouse no longer is a mouse but is a rat or something like that. That doesn't work. One thing we haven't talked about is gaming, video games, interactive content. People talk a lot about maybe a buzzword but Metaverse. People define it differently.

maybe it's virtual reality, maybe it's an interactive 3D world, maybe it's just a deeper immersion, you know, our use of the internet, which has already become, you know, pretty deep, goes even deeper. Like when you think about sort of the future going out, streaming was sort of the last decade, like when you look on the horizon, what's exciting? What seems to be clear is technology,

whether it's AR or even VR, but I'm thinking more AR, is going to create more compelling experiences for consumers, either I'll call it communal consumption and interaction while consuming or just more deeply immersive, more dimensionalized experiences, even visually than they've had before. I like that. I do think that I'll call it an immersive digital shared experience, communal experience is interesting.

Could you bring people together in a place, in a digital place, and have them all experience something with one another, between one another. You know, we saw it early on, early stages of Sims and Sub-Penguins and a little ahead of their time because the experiences that were being created were so rudimentary

and you couldn't really do all that much and there was no dimension. Even the visual experience wasn't that great. At a higher level, it could be kind of interesting. You know, could we all convene in a town square, in a digital town square

and watch a movie together? I think, you know, I do VR fair amount. Like, I'm very interested in it. I think people get caught up looking at the resolution. If you compare it to a big screen TV, it's weak in the ways a big screen TV is strong, right? It doesn't have the same quality content.

Maybe you see the pixels. But it's got a different feature, which is if you do it right, you actually feel the sense that I feel right now when I'm in the same room with you, the sense of presence. It always tricks people with new tech.

It's always better in a different dimension, right? If you looked at the first mobile phone as a desktop computer, the lack of keyboard stood out to a lot of people, right? Right. But if you looked at it as, wow, a personalized phone, you know, magical computer screen in my pocket, it was amazing.

Right, exactly. So a lot of it's like the perspective. If you look at VR as like a big screen TV, it's going to look weak. If you look at it as this magic box where I can be in the same room with you with graphics that aren't quite there yet. Yes. It's also funny how quickly we forget some of the changes that felt so off to us in organic. I mean, we all had BlackBerry's.

And Steve comes out with the iPhone. What? I got a touch point of the screen? No, there's famously, the reporters were like, like, well, how are people going to type with their thumbs? He's like, they're going to learn. They're going to learn how to use a touchscreen. I was around when he was doing that,

and so much just happened that he didn't even see happening. Yeah, yeah. But he was against the App Store originally. At the beginning, someone said, how do I create an app? He said, you create a website. You have a browser, and that's it. And there's no apps. Yeah, I don't like these cluttered, ugly things in his perfect garden.

Right. He and I had a conversation about books. I asked him, I don't know whether it was the iPad. I can't remember. Wasn't the iPhone. You're going to have a bookstore. You're going to be able read books. No.

You know, what do people want to do that? He got it quickly, by the way. You got that. You know, given your experience in the physical world of character building Disney World, Disneyland, etc. Do you think we would ever get to a point where we could have a Disney world in digital immersive experience entirely? Well, I think it will be tried, some virtual theme park experience. It might become very compelling. I don't think it replaces the physical experience.

That's very unique. You do share it with others, sometimes too many others. It's just, I just think that while I agree with Chris at VR, there's something about it that's very compelling, even though sometimes there's a loss of picture quality, et cetera. There's something about that tangible, immersive experience that's about as powerful as it gets. Yeah.

I think when Disney's Imagineers build an immersive world that feels real, that such experience is very, very hard to replicate. on an app or even with VR glasses. It's like you're not going to have people that just stop interacting with one of their physical world because they can do so with glasses. It's not going to happen. I don't think. It'll probably be something, I would just guess, native to the,

like it'll be a Roblox or a Minecraft, something that's truly an interactive experience as opposed to generally when you take something like offline and try to make it online. Right. Or like you said earlier about trying to turn the early history of film as starting as plays instead of what's native to the media. I think you could argue also, in fact,

I would probably argue that you end up with a lot of these mature technologies with a barbell structure, meaning you go more digital, you also want to go more physical. Like it actually ends up people value the in-person time more. And what you get rid of is all the middle stuff, like the mediocre experiences. Interesting. This is typically what happens in any maturing industry. Like it happened in retail. They call it Death of the Middle, right?

You have the scaled Amazon experience and you have the Gucci experience, but who needs the middle? Who needs the mold? Yeah. I think it might be happening with remote work now. Like, we have in our team, we have big off-sites, we have dinners, and then we have Zoom, but who needs the mediocre coffee in the office or whatever. That's interesting. I hadn't thought about it as it relates to work. So just mentioned remote work.

Do you have any thoughts, just, you know, on what? I tend to be conservative on remote work. I happen to believe that it can't possibly equal the productivity of in-person work. That's very conservative, you understand, and generational perhaps. Also creative, maybe. I worry a lot about creative. Bouncing creative ideas off other people in the same space, really important. Creative feedback.

If you can't give someone body language, make them feel comfortable. You're doing it on a Zoom. Oh, boy, I wouldn't want to be creator. Listening to someone bishing about the movie I just made via Zoom. It doesn't work. Culture is another thing. And I worry you want to create a company culture or business culture. I happen to believe that there's value to that.

It's going to be harder to do with everybody working. remotely. And then leadership and mentoring. I would not be where I am today had my boss has not been able to see me perform in some physical space. I'm convinced to that. That's great. I was dying to hear your thoughts on that. Going back for one quick question, you know, obviously, you know, I work a lot and I focus on Web3 and crypto. And there we think a lot about bringing communities together and new ways to market and fund and co-create and other things. Well, I'm excited about Web 3.3. no developments, although everything seems so nascent that I don't think anybody really knows

what develops. If I were a creator, I like the world that is ahead, even though I think it's ill-defined right now and just don't think we know. Sometimes, as you know, it's a matter of some great creative mind using these tools in the most compelling way. You know, Pixar is a great example of that. It's computer-generated animation. I mean, originally the vision was from to make TV commercials out of it and so on it.

well, why don't we make movies instead of hand-drawn animation? And Pixar showed what could be done with that technology to enhance storytelling and thus the customer experience. I don't think we've seen that yet in Web 3.0. So I like the prospects, but I can't be specific. I don't know. I think of these technologies as having distinct patterns where there's kind of an emerging phase.

And as you said, there's usually like a kind of a breakout. I call it native creative experience. And so you have the Pixar, you have probably in mobile, it was something like Instagram. You had apps before, but it wasn't like an app that really, yeah, TikTok, that really kind of embraced the new medium. And that to me is what makes these new technology shifts exciting. Is this interaction between the technology and the creative side? So that point, Chris, is such a great point because to go back to what we talked about at the very beginning, which is Pixar, I go up to Pixar. I spend a day there, and I observe very closely what is the dynamic.

between the creative side and the technology side. And John Lassiter articulated this really well to me. He put into words what I was seeing. The creative side turns to the technology side and says, give me the tools to do this for my story, to tell the story this way. I want to show snow in the most realistic fashion. Give me those tools.

They're constantly challenging the technology side to enable them to fulfill their creative vision. At the same time, the technology side creates technology, not even knowing how it might be used by the creator's side, but they show it to the creators and inspire them to create in a completely different level or a different direction. Yeah, Pixar so interesting because normally this happens in a broader marketplace, right? So you have YouTube come along that's dependent on broadband,

which of course is hundreds of companies and there's hundreds of video providers and the Ying Yang, as you describe it, happens across all these organizations. I guess in Pixar, it's unusual. and I think maybe to do with Steve Jobs' kind of visionary. And George Lucas. Yeah, they kept funding it kind of irrationally for, I think, like, 10 years, wasn't it, before they finally had, I think it was early 80s when he first bought it, right? As I recall it for $15 million.

He bought it, at least as I recall, the tech provider. It was a pure tech thing. For $15 million dollars, you put $35 million of his own money in. 50 million and he sold the Disney for $7.3 billion. Well, Nelson was the crazy thing where he, like, IPOed it, like a week after Toy Story came out or something. I don't remember what the date was. We actually covered that on our podcast at one point. Anyway, so I personally think that we're entering, I believe, like an era now with things like virtual reality, augmented reality, Web 3, where the technology is getting to the point where really creative people can come along and try to use those tools to create brand new experiences.

And as you say, there will always be these kind of eternal truths and storytelling and other kinds of creative activities. but like what is this new medium, right? Like early film, you know, my understanding is they started off kind of filming plays and then they realize it has its own language, just like creative, yeah, vocabulary. Well, you can go well beyond the confines of a stage in a theater, and the stage is limitless. It's just completely limited. And you can do close-ups and, you know, Zoom shots and all sorts of crazy stuff you couldn't do. And what does that mean?

And it took decades for creative people to really develop that, right? Yes, and I think in Web 3.0, I think we're going to see some silly experiments. Yeah, we are. We always do. But then something's going to come along. I muse about it all the time to myself. You know, what could it be? And that sort of, I don't know, whatever we call it, yin-yang, or that dynamic,

fascinates me, and I think what you describe is going to play out, where technology is put in the hands. We call it a storyteller. Walt Disney had a great quote in the 50s. He had to write something about the future of media to prove. put in a cornerstone of a building or something. And he wrote something like that no matter what happens, I think he called it an electronic technology or telecommunications,

the purview of the storyteller, a purview he uses, is only to get broader or become more exciting. He's thinking of a world where technology is one of the storyteller's greatest weapons, tools, to create great stories. And that, to me, is what excites me about next generation technology. Well, thank you, Bob. Thank you for spending time with us.

This was super amazing. I enjoyed it. Thank you. All right. And this ends this episode of Web 3 with A6 and Z, outro music. Okay. We have good music. Oh, we have great music.

I may give you a note on that. Thank you for listening to Web 3 with A6 and Z. You can find show notes with links to resources, books, or papers discussed, transcripts, and more at A6NCrypto.com. This episode was produced and edited by Solzol. Jonal Choxy, that's me. The episode was technically edited by our audio editor, Justin Golden, with Seven Morris. Credit also to Moonshot Design for the Art and all thanks to support from A6 and Z Crypto. To follow more of our work and get updates, resources from us and from others, be sure to subscribe to our Web 3 weekly newsletter. You can find it on our website at A6NZ Crypto.com.

Thank you for listening and for subscribing. Let's go. Do you want to say what your next book is on? Yeah, I started out by wanting to write a book about leadership during crisis, which I think is different than just general leadership, because what's demanded of a leader is much greater. I'm adding to that it essentially includes leadership during times of great disruption and transformation too. It's relevant to a lot of things that we've talked about.

Themes that I'm covering are basically one of the attributes of great leadership during times of great change or great crisis. It's pretty clear to me the courage and empathy. or right at the top of the list, being able to be present for people, particularly during a crisis. And, you know, I mentioned having courage really important, but at the same time, you have to be able to make decisions in a much more rapid rate than ever before. Do you have a title for this book yet? Nope. If you got any ideas.

Got it. You know, I wanted to say crisis of a lifetime because the first book was right of a lifetime. Oh, yeah. Too cute. So I don't know. Thanks for being here, Bob. Nice to be here, Chris. Thank you.