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Let's talk about Larry and David Ellison. They're making massive media moves both in legacy and social media.
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Let's talk about the legacy stuff first. Paramount Sky Dance merger is basically
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a month old and already CEO David Ellison, that's Larry Ellison's son, is looking to acquire Warner Brothers
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Discovery. As you probably know, they're run by David Zazlov. They own CNN, HBO,
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DC Comics, Discovery, a bunch of other brands. And that would put the Ellison's in charge of not just CBS News, which
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owns 60 Minutes, they would also own CNN, as everybody knows, Larry Ellison, big
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GOP donor in the past. And there also are reports, interestingly, that David Ellison wants to buy the free press from
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Barrett Weiss for 200 million and put her in charge of CBS in 60 minutes. That would be seismic in the news business.
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If you put those assets together, 200 million paid subs. HBO Discovery, 120 million paid subs right now. CBS reaches
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80 million paid with Paramount Plus and The Free Press is obviously niche and brand new. Uh but they're growing. They
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got 136,000 paid subscribers and, you know, almost a million followers across their social media. The second piece to
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this puzzle that's super interesting is social media. Oracle is now the heavy favorite to acquire Tik Tok and uh Trump
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said that was going to happen as part of the US and China negotiations that are ongoing for trade.
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So what are your thoughts here Freedber? You wanted to talk about this is an interesting collection of assets coming
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under the Ellison umbrella. Is this strategic? Is this vanity? Is it a nepo baby with a huge pay, you know, blank
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checkbook? What are we seeing here? And what do you think? I mean, what do you do when you're worth a couple hundred
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billion dollars and you're 81 years old and you're thinking about what legacy you want to leave behind, except to
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perhaps empower your kid to build the largest, most influential media company in history.
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And I think that's the story that's unfolding in front of us. Not to mention, I think that the Tik Tok deal
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and Ellison's role in Tik Tok is going to be instrumental in realizing potential future distribution. So, if
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you think about the way media has evolved, it used to be kind of centralized studio-based production
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models, the old Paramount, the old Warner Brothers, etc. And then there's been a lot of streamers that have come
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on that started to syndicate that content and contract for production of content like Netflix. And obviously,
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Paramount Plus and HBO Max have their own streaming services to deliver their own content. But at the end of the day,
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there's kind of two big behemoths that each come at it from a different place. One is YouTube and the other one is
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Netflix. Netflix has historically been in the kind of scripted production or contracted production side and YouTube
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in the social production side. The alternative to that might be this consolidated merger and Tik Tok and now
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Larry Ellison's going to have a hand in both. And so there may be and I do think
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that there's going to be this convergence between this kind of socially generated content platform like
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a YouTube like a Tik Tok and the high value produced content like the studios like Netflix has been doing. And the
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reason is Netflix has had to compress margins on the content creators, and we talked about this at our summit last
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week, where a lot of the creators now that went to Netflix to get good deals or went to Amazon, they're all finding
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that the budgets are getting cut and that the only way these folks are going to get paid is like cost of production
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plus 10%. with cost of production getting squeezed and budgets getting squeezed by Netflix. So, as a creator,
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you may actually make more money by taking your content to a bigger audience with sponsors or advertisers on YouTube.
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And so, a lot of big-time creators, by the way, the audience at YouTube is over 10x bigger than it is on Netflix. So,
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Netflix is only paying to retain subscribers now. You know, subscriber growth is kind of slowed down a bit. At
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the end of the day, Netflix is just spending money on content to keep people on the platform. So if you take the
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incredibly rich content and production capabilities of HBO and all the Warner Brother discovery media properties and
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production houses underneath this combined company and you combine that with the direct to consumer distribution
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of Tik Tok, there may in the future be a merger between this media company and Tik Tok or a deep commercial
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relationship where imagine going on Tik Tok and you can now get premium content for 10 bucks a month or two bucks an
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episode and watch all of your HB shows in the Tik Tok app or watch all of the discovery shows or all of the other
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content that's available. So, I do think that the distribution that has been delivered by this kind of social media
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model like YouTube and Tik Tok combined with the premium model may end up creating a real category killer that can
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challenge both YouTube and Netflix. And so, I would kind of look at this story as like a beginning of an unfolding of
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something that may rewrite the entire media landscape. I mean, when you look back on it, Freeberg Katzenberg ha was
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maybe ahead of his time with Quibby. He wanted to try to make this bridge between the two the and and he just
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might have been too early or just didn't execute. Well, think about the network effects.
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What made Tik Tok so big and what made YouTube so big is the long tale of user generated content and that's what drove
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the audience and that's what built the the platform mainstream, right? And Yeah. Well, then you can do the the
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premium stuff on top of it. Yeah. Yeah, but when you try and create premium content in a small way like Katsenberg
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tried to do, it's very hard to build the audience to make the economics make sense.
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And the economics are really challenging already with premium content in the big
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players as you can see with Netflix. They're they're compressing budgets. So I would I would argue that you really
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need to have them both to make the model work now because the audience is so attuned to user generated content.
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Here's what our partner Poly Market, shout out to my guy Shane, 84% Larry Ellison or Oracle kind of the same thing
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here. They put a slash acquire Tik Tok that's up over 20 percentage points in the last couple of days. What do you
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think all this means? The the divevestature of Tik Tok, Larry Ellison getting it as opposed to Google, Apple,
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Microsoft. I mean, there was so many people maybe even Elon who might have wanted Tik Tok. What do you think of
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this divevestature? And then uh our government gets the golden vote now. I understand that the US government will
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have a seat on the board of uh Tik Tok. So the Chinese have given it up except for the algorithm. What are your
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thoughts? Remember it's Tik Tok. It's Tik Tok US. It's only 5% of the over it's only 5% 5
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to 8% of the overall Tik Tok business. So Tik Tok US is what's being spun out. Yes. Correct. Chimat what do you what do
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you think here? I think there's two things that are important. The first is that in the
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future and this may sound very dystopian but he who controls the algorithm will control what people think. And if you
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think about it in that context, you need, as you've said before, a marketplace of very different approaches
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and algorithms that are essentially fighting for mind share. If you don't have that, you'll have a massive zombie
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group think culture. So from that perspective, you have to put Tik Tok into the hands of a completely different
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owner than any of these other social media sites so that they are motivated to compete against each other. That's
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one. The second thing is there's been a lot that has been said about the Tik Tok
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algorithm called Monolith and a bunch of it has been already put out openly and Tik Tok was very
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transparent and they published a paper. You can find it on archive. You can show
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the link to it, Nick, maybe in the show notes, but it's an incredible paper that
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describes a very simplistic approach to essentially moving people into different
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directions of thought. So if you put all of these ideas together, I think where we are maybe all
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the way coming back to where we started this discussion about Charlie Kirk, it is increasingly important to make
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sure that the overwhelming majority of how people get ideas is understood by the rest of the people. Because if you
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start to go down these rabbit holes in ways that are algorithmically programmed in models that you don't understand that
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then push you into extremism, you will end up in a very very very bad place as will society.
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And then the the outcomes of that are completely avoidable as we're seeing. Yes.
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So I think that the Tik Tok thing is going to be one of these important moments where we shine a light on the
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importance of these algorithms. It's poorly understood. It's not well talked about, but I think what the Trump
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administration doing is important to keep it away from everybody else so that there's more competition.
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Yeah, I'm gonna um strongly agree. I think the Trump administration did a great job on this one. Just calling
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balls and strikes of not making sure meta got it or somebody who has already a lot of algorithmic control over what
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society seeing. And back to just just on this, you know, the I give a lot of credit to Elon too because his
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algorithm is open source. We know what's happening there. He just did it two weeks ago. Yeah.
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If that's open source and Monolith is open source, then I think the next big question we have to ask is what is going
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on in Reddit? What is going on in meta? How are we how are we guiding and shaping people?
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Why does YouTube sometimes for example like our Tulsi Gabbard video is apparently deemed too risque an adult
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content? Who decided that? How did that happen? An algorithm. Yeah. Not not any human.
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And you know the thing I think is important to start thinking about here is as an industry we're going to either
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need to regulate this ourselves or be regulated. I think that there should be regulation and I'm not like super a fan
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of regulation that algorithms must be disclosed and you must have the option given to you upfront to switch your
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algorithm. There should be a b ya bring your own algorithm. There should be an algorithm store. And I I talked to Elon
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about this publicly on on X many times. If you could say, I want one that just gives me a chronological feed. I want
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one that is from the highest quality sources. And then you should be required to show what the default algorithm is
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doing. And if you don't do that, I think you should lose your section 230 because
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an algorithm is more powerful than an editor at the New York Times or an editor at HBO or Netflix deciding what
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we see, deciding what goes on the homepage. The algorithm is a black box and who knows who's controlling it. And
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then what happens in society when young men are pushed towards more and more fringe content, more and more dark
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content? Why not just have all this be transparent? Why not let people see? Unfortunately, they don't need to be
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pushed to fringe content. All they need to do is go to a school where the woke curriculum has been mainstreamed. And
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bingo. Randy Weingard's foot soldiers are saying that conservatives are fascists.
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So you're acting like you got to go through some weird rabbit hole to embibe these ideologies when all you have to do
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is attend a public school and probably a lot of private ones, too. I think Dalton's probably the worst. So again, I
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you're acting like the radicalization's coming from the fringes. I think what's so concerning about where we are as a
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society is that radicalization is coming from our institutions or a lot of these
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institutions. You're not going to get an argument with me. I think these schools should be
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teaching, you know, basic skills and they should not be involved in the culture wars in any way. I don't think
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any parent is sending their kids there. And if you are a parent and you're in California, I I would encourage you to
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figure out what they're teaching your kids. Uh, and here in the great state of Texas, it's quite
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totally agree. But hey, can I can I It's quite different here, by the way. And it's quite different here in the
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great state of Texas. I can tell you having lived in both places with three kids,