 Let's talk about advertising. So how is advertising changing because you know, there's roughly Or is it 650 billion dollars a year spend on advertising? Yeah, and if that is going away from traditional television So what's gonna happen? Well, so it hasn't gone away. So the the the sad news for all those online video companies is that they haven't actually been very successful in Turning TV dollars into internet dollars. They'd like to they keep getting better at making a proposition But advertisers are quite conservative and so those dollars stay with TV and they probably will for a little while But there are a couple changes coming so we see we can start to see the outline of the change The first one is this year at the upfront in New York all the big broadcasters came in and their big message was Multi-platform everybody talked about all the ones. Yeah What they're really saying is we're putting some of our shows on some of these devices And then they point back to TV because that's still where the big dollars are But they heard the message advertisers want multi-platform. All right fine. We'll give you that right? So they're working on that the second thing to pay attention to now is increasingly ad agencies in New York particularly the media buyers The digital side is taking over the traditional side And so what you're gonna start to see is all those metric driven automated tools from the web They're gonna start to pervade the traditional media then traditional media will start to resemble the web much more And you'll see the two things blend together more so that's good And then finally I would observe this advertising used to be a creative business think Mad Men, right? It's not now it's an analytics number driven It's a big data business just like you were saying a minute ago advertising is a big data business now That's a shock to the people in advertising the creative people find this anathema when I say it But it's absolutely the case now. It's a numbers driven analyst analytics driven business Much of that's driven by the experience on the web where you can literally AB test You can do a real-time exchange you can buy an exact audience deliver precisely to that audience Things that were unthinkable in traditional media, but increasingly that too will start to show up on television Music and so I think you know of course that the saving grace of what we're seeing in television is that it's actually Converging with the Internet. Yeah, that's right and with mobile and social That's why I'm so bullish on video because I mean TV might have its challenges, but video I think if you're looking at the advertising pie expanding because of gamification And yeah and apps and so on then television can be part of that expansion by being part of the offering That's exactly unlike publishers. It's very easy for them to do for example second screen and those kind of things right While a publisher that is completely spoiled by the rock by the huge margin of the past You know looking at the the the analog dimes coming in or pennies right then it's not the same So it's harder for them because they don't they don't have the attention monopoly any longer So if you if you had a magazine you had a monopoly by the fact that everybody had it And that's much easier for them to to pull up the same kind of head out of the the rabbit all they had You know, but you know all these companies fine when when they do jump over the digital divide and start to become digital companies They discovered to their dismay that the margins are lower on the web because there's a hell of a lot But I think here's the bottom line. This is I was trying to tell my client Yes, it may even just be one 10% of what you made before but the global audience of People connect that's right, you know, and and if they're all gonna be fan of Your you know the Lily Hammer show or whatever you can advertise on that and you can have brand-in branded content in the Instagram advertising Right, you know, that is a lot better than anything you ever had. I'm with you This is like I'm like like the Kindle Yeah, if you're gonna sell a book for two laws in the Kindle, but your potential audience is a billion Yeah, you're gonna get a lot more people. You're gonna make money You'll make profit you may not make the same profit margin But you'll reach a bigger audience and frankly, there's also a limited amount of people's time and attention So you want that big audience if you can here's the way to look at it Media come traditional media is all about revenue maximization So that's close it down lock it off force a subscription control the audience all those things, right? It seems like a digital media. It's all about audience maximization and not necessarily revenue maximization So the two things are opposite ends of the spectrum, right? You're gonna maximize revenue you're gonna minimize audience But if you maximize revenue you have to also have control of the audience, right? Well, that's very hard to do and you can't do that anymore So I call this a transition trauma right with you know this you know this space where you say you can't control the views anymore and the brands And the message so you can control your own content, but that hasn't really changed right? So in the future you have to find a way that you can involve them in this process And this is where the big disconnect is happening. It's true. So it's not that the money isn't there the money is there I mean people are paying for stuff all over. I mean look at Netflix, you know, 43 billion subscribers Yeah, Spotify and they're spending a hundred million out of new a new series. So I think that was the economist in the presentation I saw the other day Well, I think was tepid actually it was talking about the the primal thing is that we have to look for is a reason to pay You know, what is my reason to pay for this content, right? And it can't just be one reason for example, you know, I'm not subscribed in the New York Times Just because the writers are good. I'm gonna subscribe. They are good You know, there's no doubt about that. But you know, I'm gonna put three hundred bucks with it So I subscribe this looks ten other reasons. Yeah, that make it it was basically indispensable to my life Right and then I'm in yeah, this is like major league baseball app You know pay 120 bucks a year if you're fan, you want it's worth it. Exactly. It was a thousand dollars Probably not right, but that would be revenue maximization, right? So they're they're getting a good balance because they're getting fairly high money for an app I'm very high money. Well, I would I would forecast that for books For example, we're gonna see lots of books novels in the range for dollar to five dollars. Yeah Because they'll be written more painlessly and published quicker. Yeah, and without the publisher. Yeah, so You know, I would pay more for a shorter book I think there's a lot of the model right now is broken, right? You you get someone who wrote a good article for the Atlantic and then you say great We want that article turned into books and now go add another hundred and sixty pages to what really should have been maybe a 40-page piece Yeah, I'd rather have the 40-page piece and I'd pay five or six bucks for that Or break it into five books five mini books and they probably pay a couple bucks for each of those They you can assemble that same package You know, we have this idea that the way media is the way we grew up with me is how it's always going to be But the fact is if you look over the long like centuries It changes, right? Charles Dickens used to sell books by the chapter and that's why his big books We get them today you know bound the rate of thick like that People bought him his pamphlets one by one That's why each chapter and ends with such a great cliffhanger because he wanted that audience clattering for the next chapter Right, so he got the subscription business if that's how authors have to write in the future will probably write better It'll be more entertaining people will read it more thoroughly. They'll read what they pay for it might actually be better I think what we're seeing is one of the The big switches now that we're seeing from the first part of the internet now that very soon We're going to have five billion people connected. So a lot more musicians publishers storywriters Filipid users and so on will have a landfill a huge landfill of stuff So curation and filtering and we make a sense out of it is a huge drop And that's what publishes should be doing it is and look we know this because this happened in the past when the magazine Boom that way it's gonna be bigger. I understand but readers digest emerges a really powerful thing because they did a digest There's so many magazines nobody could read them all so they did that for you right Harpers used to do this as well or they would take selections from magazines and gather it into a compilation So for sure we know this is a proven strategy that works when there's proliferation of content people will pay for the valuable service You know, I read your newsfeed for this reason because you're always thinking interesting stuff