However Ellison says he is getting greater than that for his billions: He is additionally shopping for the constructing blocks for what’s going to finally be a “World-Class Media and Expertise Enterprise.”
If that sounds acquainted, there is a good motive for that: This spring, I famous that folks in David Ellison’s camp have been telling journalists that his plan for reviving Paramount concerned infusing the corporate with numerous tech and tech know-how. And the suggestion was that no less than some of that was going to be equipped by Oracle, the corporate based by his father, Larry Ellison — who is likely one of the world’s richest males and a major investor within the new Paramount-to-be.
We have heard this earlier than from David Ellison
As I mentioned again in April, the Paramount-powered-by-Oracle pitch would not make sense. And David Ellison is not precisely making it now. However he’s positively leaning on the concept he is constructing a media firm that can also be a tech firm.
Right here he was on Monday morning, talking on an investor name to promote the Paramount deal (the textual content is through a rush transcript):
“We have to transition New Paramount to a world class tech media and expertise enterprise. The very first thing we have to do is double down on the core competency of storytelling throughout mediums. But additionally once you take a look at the panorama because it exists in the present day, there are numerous expertise firms which can be quickly increasing into media firms, and we consider it’s important for Paramount to have the ability to increase its technological prowess to be each a media and expertise enterprise.”
Ellison then pointed to a slide in his pitch deck pushing his tech plans from the corporate, which embody making its streaming service higher, utilizing cloud servers, and utilizing “AI instruments to reinforce creativity whereas driving manufacturing efficiencies.”
Screenshot through Skydance/Paramount investor deck
After which Ellison stored going, connecting himself to his father’s buddy Steve Jobs, Apple and Pixar, the animation studio Jobs constructed up and finally offered to Disney:
“Having had the privilege of being mentored by Steve Jobs and getting to observe him construct Pixar from the bottom up, one in every of my favourite quotes that him and [Pixar leader John Lasseter] at all times had was the artwork challenges the expertise and the expertise evokes the artwork. And [the] perception that understanding of the symbiotic relationship between artwork and expertise is crucial to have the ability to meet this second in time for storytelling.”
This all sounds nice — or no less than fascinating — in principle. But it surely’s additionally a head-scratcher.
That is partly as a result of David Ellison is not a tech mogul. He is a producer who makes and sells films and TV exhibits, roughly like everybody else within the enterprise. (His reps did not reply to a request for remark.)
In the course of the name, Ellison touted his success utilizing Oracle’s cloud tech to assist construct his animation division with Lasseter, and I will take his phrase on that. However this jogs my memory a little bit of the 2015 period when digital publishers like BuzzFeed and Vox Media advised traders they weren’t media firms however tech firms that made media. Spoiler: They turned out to be media firms.
The larger downside with the tech + media pitch is not that tech and media aren’t intertwined. They very a lot are.
The actual downside that Paramount — and nearly each different huge media firm — has today is not that its tech is not adequate. It is that its scale is not sufficiently big.
Why media firms need you to think about them as tech corporations
That is why you always hear about media firms — together with Paramount — as potential M&A targets: Traders consider they can not tackle Netflix and YouTube on their very own.
That is additionally why you always hear about streamers making an attempt to bundle themselves collectively — one thing each Ellison and Paramount’s earlier managers have been overtly speaking up as properly.
So, techifying Paramount’s streaming operations sounds … high quality — if Ellison and crew can actually do a greater job than Paramount’s previous guard. But it surely will not be ample.
“Streaming tech throughout all of legacy media is underwhelming, so all of them want an improve,” says Lightshed Companions analyst Wealthy Greenfield, who wrote a prescient observe on this theme final week. “Nonetheless nice tech would not matter with out large quantities of content material — since you want watch time per consumer per day to be multiples increased” — as a result of that is how you’ll tune a helpful algorithm that lets customers discover exhibits and flicks they need to watch.
All of which tells you why the Paramounts of the world aren’t simply struggling towards Netflix, which has a deep technological tradition married to a deep catalog of content material it has been mining for years. It is also why they’re struggling towards the likes of Instagram, YouTube and TikTok, who apply their tech data to endless provides of content material their customers provide for little to no value.
So, underneath the best-case situation — one the place David Ellison actually is a tech wizard or is aware of methods to put tech wizards to work — he’ll have his work reduce out for him. And if he seems to only be a man who’s been good at making TV exhibits and flicks? It’ll be even tougher.
