Peter Chernin on ‘Backrooms,’ Sequel Fatigue, and Hollywood Mergers

The low-budget horror film ‘Backrooms’ is the surprise hit of the summer so far, netting more than $200 million globally in its leap from YouTube to the big screen. But among the film’s producers is a Hollywood heavyweight: Peter Chernin. As the former president and COO of News Corp. and chairman and CEO of the Fox Group, Peter greenlit huge hits like “Titanic” and “Avatar,” before moving on to found both North Road and The Chernin Group. Kara and Peter talk about why “Backrooms” appealed to young audiences, how Hollywood has played it too safe over the last decade, and what it needs to do to get back to making the kinds of movies people want to see. They also talk about how AI could impact the movie-making business and why he’s not opposed to Paramount’s merger with Warner Bros. Discovery. A note to listeners: This episode was recorded before the Justice Department approved Paramount’s acquisition of Warner Bros. Discovery late Friday. Questions? Comments? Email us at [email protected] or find us on YouTube, Instagram, TikTok, Threads, and Bluesky @onwithkaraswisher. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  I have no legacy. I'll be dead. That'll be that.

• 0:02Kara Swisher?

  Sir, you greenlit Titanic and Avatar. You did.

• 0:18Kara Swisher?

  Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is On with Kara Swisher, and I'm Kara Swisher. The indie horror movie Backrooms is one of the big surprise hits of the summer. The film is directed by 20-year-old YouTube creator Kane Parsons. It so far grossed more than $135 million domestically and more than $200 million worldwide. For context, it had an opening weekend on par with the last Star Wars installment, despite costing a fraction of the price to make. But behind Backrooms is someone with a well-established reputation for making things people want to see, Peter Chernin. He's one of the producers on the film, and his production studio, Chernin Entertainment, co-financed the film. Chernin was Rupert Murdoch's longtime second-in-command

• 1:03Kara Swisher?

  at News Corp., which is where I met him a long time ago. He was also the head of Fox Movie and TV divisions, where he greenlit major blockbusters like Titanic and Avatar. You might have heard of them. In 2010, he founded his own private equity firm, The Chernin Group, to invest in digital media companies. He also recently sold the global content studio he founded, North Road, to the French entertainment giant, Media One. I love Peter Chernin. I'm not going to pretend. I always used to go to him because he always told to me straight, even if it was not in his interests. He was always very smart and very honest about the entertainment industry. Of course, I was always wary because of the Murdoch part, but he was very different, actually, very liberal in his politics, and

• 1:45Kara Swisher?

  at the same time was always focused on quality and just smarts. And I just think, when he went into digital media, I thought he did it right. I think a lot of Hollywood people didn't. And he also makes the Planet of the Apes movies, which I love. Anyway, he's just a really sharp person, and he really is willing to try things, and I really appreciate that. All right, let's get to my conversation with Peter Chernin. Our expert question comes from Ari Shapiro, co-host of the CNN culture podcast Engagement Party. Don't go anywhere.

• 2:21Kara Swisher?

  Support for this show comes from The Guardian and their new show, Stateside, where journalists Kai Wright and Carter Sherman use the entire independent reporting resources of The Guardian to slow down the news and wrestle with the questions we all have about what is actually happening in the world. Join Kai and Carter three times a week as they utilize all the reporting resources The Guardian has across news, international coverage, climate, culture, wellness, and more. And The Guardian's not owned by a billionaire, they fearlessly report the facts without interference. Go to theguardian.com/stateside to learn more and listen wherever you get your podcasts or watch on YouTube. That's theguardian.com/stateside.

• 3:04Speaker 02

  Ripple has been powering modern finance for a decade. We're leading the charge to bridge the gap between existing financial systems and the future of finance. You can have it all: legacy, stability, and digital innovation. Systems that work with your other systems. Because with the right partner, the question isn't crypto or traditional finance. The question is simply, why choose? A new standard of modern finance. It's happening with Ripple. For informational purposes only, availability of products can vary and may be provided by different Ripple entities.

• 3:35Speaker 03

  Parenting unlocks some pretty impressive skills, like carrying grocery bags, a soccer ball, and a sleepy kid all at once. Good thing the newly-designed Chrysler Pacifica has a few tricks of its own: hands-free power-sliding doors and liftgate, rear-seat entertainment, and stow-and-go seating and storage that adapts faster than your family's weekend plans. Visit Chrysler.com to learn more. Chrysler is a registered trademark of FCAUS LLC.

• 4:07Kara Swisher?

  Peter Chernin, thanks for coming on On.

• 4:10Speaker 00

  It's my pleasure. How you doing?

• 4:11Kara Swisher?

  Good. Let's start with what's happening now. Congrats on the success of Backrooms. It's now 824's highest grossing domestic film ever. They co-financed the film alongside Chernin Entertainment, and the film is directed by Kane Parsons. He was a teenager when you greenlit the movie. Talk a little bit- About Turner Entertainment, maybe for people who don't know what you've been up to, because it's been a wide range of things. And what stood out to you about this film? Because you've done lots and lots of traditional films. I mean, Planet of the Apes, things like that.

• 4:40Speaker 00

  So Turner Entertainment is a 15-year-old film and television production company, ranging from Planet of the Apes to New Girl to Ford vs. Ferrari, et cetera. But, you know, it's interesting. When I did Planet of the Apes, people came to me immediately. It was the first movie we ever produced. And said, "You should brand the company. You should become the next action producer. You should run the next big..." And I said, "Yeah, that's a good idea, but I don't want to. I want to make a wide range of movies." You know, the next movie we made was a little searchlight movie called The Drop. We did a family comedy. We did some animated movies. And I've always been interested in doing a wide range of content. And Turner Entertainment, which I guess at this point has produced, I don't know,

• 5:22Speaker 00

  35 movies, has done a wide range of things. You know, Back Rooms is, by the way, is just a continuation of a wide range of interests. And, you know, I was interested, I was attracted to the idea of a really young filmmaker. I was attracted to the idea of a piece of very organic YouTube content. And it just seemed cool to me.

• 5:48Kara Swisher?

  So talk about the YouTube content, because you had been, I recall you made me go visit an anime company that was doing a bunch of stuff and then some other things. And you had been, you know, dabbling in some of the other investments you made during the most recent years after you left Fox. But initially, I don't recall you being reticent about YouTube stuff, but you were sort of watching it and putting little bets down all over the place. I recall at the time, everyone was sort of looking for that YouTube, that was going to leap from YouTube to the big screen.

• 6:20Speaker 00

  Yeah, I would say, so first of all, in terms of our early investments, we were never particularly focused on the leap from YouTube to the big screen. What I have felt is that over time YouTube and to some degree TikTok would serve as the incubator for a next generation of talent, you know, similar in some ways to the way Roger Corman did forty years ago, to the way MTV Music Videos did twenty-five years ago. You know, you have a bunch of very smart, talented, young people making stuff. You know, like any other thing in life, half of it will be garbage, half of it will be interesting, and two percent of it will be extraordinary. And I've consistently

• 7:04Speaker 00

  been interested in what that two percent is going to look like.

• 7:07Kara Swisher?

  I think a lot of sometimes Hollywood is just good guessing, right? It's like making the right choice. But explain to me what appealed to you about this particular project and Kane himself.

• 7:17Speaker 00

  I would say it's certainly good guessing, like anything else in life. But, you know, I guess you look at these things in two ways. One is just look at the size of the audience and the engagement of the audience, which was quite extraordinary. But I felt from the very beginning that there was what Kane did that in my mind was so impressive, and he did it as a originally did as a fifteen year old, is he took originally Backrooms was a meme on 4chan. It was one photograph of, I believe, a furniture warehouse being deconstructed. And that was posted on 4chan. That became something people talked about.

• 7:59Speaker 00

  When he was fifteen years old, Kane had a vision of turning that into a science fiction storytelling mode. And I found that to be really impressive, because I think that he took something which was just a meme and a meme in some ways for alienation, for, you know, alternate universes, and turned that into a storytelling exercise. And I thought the ways he did that was extremely impressive, extremely, extremely impressive. And he, you know, he did all those early, he started doing those early YouTube Backrooms videos when he was fifteen, you know, and we optioned it and made a deal with him, I think when he was seventeen or eighteen. But, you know, but I think the other thing which Bear is saying is, you know, like most things Hollywood, every single meeting in Hollywood over the

• 8:44Speaker 00

  last ten days has been find me my YouTuber. That's not the smartest thing on earth. You know, it's no different than saying find me a sequel to something else. You know, it's worth noting, we spent three years on this project. You know, we spent Period time chasing, we spent a long time working on the script, we spent another year on production. And, you know, it's not just saying bet on a YouTuber, it's not just saying bet on some, it's betting on a very specific piece of content and betting on a very specific piece of talent.

• 9:15Kara Swisher?

  A person, a particular person, which is a story, you use the word storytelling, which I think gets lost in a lot of it, because some of this can be very trendy and very ephemeral, like many memes can be, right?

• 9:27Speaker 00

  Yes, and I think clearly our view was we were not betting on trendiness. You know, and I said, look, I said very clearly, you're betting on a piece of IP, but you were also betting on the ability to convert that into a different medium and a storyteller, you know, a talented individual is capable of doing that. You know, and I think in some ways, in my opinion, our most significant contribution to this film, because this is, this is not a case of we carried, this guy is extraordinarily talented and I believe has a, you know, unmatched future ahead of him. What I think we did, which I'm very proud of, is figured out ways to support him without in any way compromising usurping his vision.

• 10:10Speaker 00

  So, you know, we originally got him a very talented producer and production company, Chris Ferguson, and I think Chris was meaningful. And then we brought on Osgood Perkins as a producer, as an extremely talented director. And I think Osgood was really sensitive about how to stand, stand next to Kane without in any way imprinting his own creative vision on him, just as there is support, there is someone who could help. You know, he was 19 years old at the time he was making this. And I think we were modestly sensitive in understanding how to manage that process.

• 10:47Kara Swisher?

  So when you said, if everyone's like, this week, all the meetings are how do we find a YouTuber? What is the problem with that? Because, you know, this YouTube's obviously been popular for a while now. I mean, my kids, my older kids use it as television, it's television to them, it's the way they consume content, even if it's, you know, PBS frontline, you know.

• 11:07Speaker 00

  You know, it's, look, the analog is after a big book has been a hit, go find me a novelist. You know, it means nothing, it's meaningless. You know, 89, 95, 98% of all novels have no relevance for film. Ninety-eight percent of what's on YouTube, ninety-nine percent, ninety-nine point nine percent has no relevance and it's just a simplistic jump on the bandwagon. Somebody else was successful with this, find me my success.

• 11:31Kara Swisher?

  Right.

• 11:32Speaker 00

  And, you know, like anything in life, you need to be discerning, you need to be discriminating, you need to decide which ones are relevant underlying material, which is the relevant talent, and it's going to be very rare that that happens.

• 11:44Kara Swisher?

  You know, it reminds me a little bit, I interviewed the creators of heated rivalry, and a lot of people in Hollywood sort of turned it down or was sort of cheapening them. But of course, people in Hollywood hadn't been aware of the, you know, the, those genres of romantic, the romantic fantasy book.

• 11:58Speaker 00

  You know, Hollywood does a number of things that are very smart. It's, look, it's like no other, it's like any other business. They do a lot of smart things, they do a lot of stupid things. You know, the smart people are, every single thing is an individual bet, and you better be very discerning about that bet. The less smart people are people who just want to follow whatever has been previously successful, and who think that because something was previously successful, the next thing will be, and/or who are unwilling to take chances on original visions.

• 12:29Kara Swisher?

  So Backroom has been, of course, a big hit with young people. One audience survey found that during the film's first weekend in theaters, close to ninety percent of ticket buyers were under thirty-five years old. Talk about that sort of bet, that people don't want to stare at the screens, they want to actually physically, especially young people, go out to the movies.

• 12:46Speaker 00

  Well, I guess I would say two things. One is, clearly, to the degree any of us can remember being young, the only thing you want to do is get out of the house and get away from your parents and get someplace with your friends, along with your friends, etc. And so, movie theater's always historically been a good place to do that. So it's, in my mind, silliness to somehow assume that five, eight years ago, young people woke up and said, "I want to go home and have family dinner with my parents," or, you know, that's never going to happen. I think what happened, which made people think this is, you know, Hollywood for decades made a wide range of movies for young people. They made youth comedies, they made horror

• 13:30Speaker 00

  movies, they made dopey action movies aimed at young people. They made movies with young stars. And I think that what has happened over the last five years is they stopped making most of those things. You know, you see very few comedies, you see very few youth comedies.

• 13:46Kara Swisher?

  No American Pie anywhere.

• 13:47Speaker 00

  Yeah, there's none of that stuff. And so it's a self fulfilling prophecy, they're not going to come. And I think the second thing that happened is they came to believe that it is fair to say that one of the roles of movie theaters, particularly in a world of ubiquitous television, ubiquitous screens, has been an opportunity, an opportunity to see big effects on a big screen, movies you mentioned. The problem with that is most of those big effects movies have been sequels and franchise movies. And most of those original franchises are now 20, 25, 30. In the case of Star Wars, 50 years old. And it's a little

• 14:27Speaker 00

  bit, in my mind, fallacious to assume that the best product for young people are remakes and sequels to franchises that are, that were originated before they were born.

• 14:40Kara Swisher?

  Right.

• 14:40Speaker 00

  And I think that's one of the things that's really resonated with Backrooms is that this feels, there's a sense of ownership among people. This is our IP, this is our content, this is something that we built, built into success on YouTube, that was made for us, was made by people our own age, et cetera.

• 14:58Kara Swisher?

  Yeah.

• 14:59Speaker 00

  And, you know, you compare it to, look, I don't mean to say anything, you compare it to Star Wars, which came out the week before, which is 50 year old IP, you know?

• 15:08Kara Swisher?

  Right. Which shouldn't do as well. But one of the things that I've noticed, and I've mentioned this many times, when people push back against movies, was original horror movies are having a real moment now. Last year, Sinners and Weapons were huge box office hits. Now we have Backrooms and also Obsession, that's another film helmed by a young director who made the leap from YouTube. Talk about the the genre, because it's not just comedy, like you you mentioned the other genres. Horror is really seeing something much stronger. And I have a feeling it's because they're original stories. I don't necessarily think it's because it's horror. I think it's because they're original in some fashion. And as opposed to, say, something that feels like it was made by AI. There's nothing about Weapons, or or Sinners, or these movies that feels AI in any way.

• 15:53Speaker 00

  Yeah, you know, it's interesting, if you if you're inside Hollywood, a year and a half ago, people were really worried about horror. Horror had gone through a really bad year, sort of a year and a half ago or so.

• 16:05Kara Swisher?

  How many SAWs can you do?

• 16:07Speaker 00

  Yeah, so that I I wouldn't say that this is all of a sudden. I think your point is correct, which they feel original. You know, they are, these particular movies have very young stars, young, well, not Backrooms doesn't have young stars, but is a a young director. But Obsession clearly has young stars. Or they feel original, you know, and so, but, look, I think it's a mistake. Human beings are desperate to be entertained. The major forms of entertainment have been around for centuries because they are appealing, horror, comedy, tragedy.

• 16:43Kara Swisher?

  Right. It's not the genre, is what you're saying.

• 16:46Speaker 00

  And that, you know, people don't make comedies right now. There are so few comedies being made, both on movies and on television. I don't get that at all. It's not, it's not as if all of a sudden, human beings woke up and said, I don't want to laugh anymore. They become self fulfilling prophecies, which is people get nervous, they stop making them, and then, all of a sudden, everybody says, well, they don't work. There's point to a comedy that works right now.

• 17:09Kara Swisher?

  Right. And a lot of the ones who made those are now older, right? They're a lot older. And they, some of them seem to be going on streaming, whether, and now Seth Rogen is older now, but, you know, he was an early person to do a lot of those comedies that did well. Sandler.

• 17:23Speaker 00

  But but the truth is, there aren't that, there aren't that many comedies on streaming either.

• 17:26Kara Swisher?

  Yeah, yeah, yeah, that's absolutely true. In a recent interview with Matt Bellamy, you said the key to success is to be, quote, relentlessly focused on where the next generation is coming from. And right now, that's obviously you. YouTube and TikTok shorts. Now, of course, as you said, there's a rush to sign young content creators. How do you think the next generation's media habits will change filmmaking and storytelling? I'm of the mind, because I have two kids in this age range, that it doesn't. They like a good story. I just don't, I don't see it that different. It may be slightly different and it's sort of like, I don't know, they like hip hop, right? It's just a different version of different things.

• 18:01Speaker 00

  Yeah, I would say that, first and foremost, I'm inclined to agree with you. You know, which is people want good stories, you know, there will be some. If you, if you were to look at the evolution of movies over the last 50 years, there's certainly been changes in the vocabulary of storytelling. But the movies that are super successful have great stories, great characters. You care deeply about them. You're moved, you're excited, you laugh, whatever those things are. They may be slightly faster cut. There's clearly different music in the background. There's way higher quality special effects, et cetera. So there are certainly different storytelling vocabulary inside of them. But fundamentally, you know, human beings are human beings. They want to, they want to be entertained. They want to be moved. They want to laugh. They want to be excited, et cetera. So I don't think that'll change.

• 18:48Speaker 00

  I do think, look, I guess I can say this because I did step away from one of those jobs. When I was getting to a, you know, the, the infrastructure of Hollywood is too old. You know, people are, and by the way, I assume a lot of friends of mine will be unhappy to hear this. But, you know, these studios are for the most part run by people who are too old, you know, and that. And, and, you know, going back forever. Irving Thalberg was in his twenties when he was doing this, but people were in their thirties and forties. It's a peak of their careers. You know, I ran 20th Century Fox in my early forties. And I certainly didn't feel young at the time, I felt like. But, you know, to the degree that, by the way, on all movies, the audience is still younger

• 19:33Speaker 00

  because those are the people who want to go out. To the degree you are separated from the audience by 20, 30, 40 plus years.

• 19:40Kara Swisher?

  Yeah, you're just not gonna know. You're just not gonna know. You're also sort of happy. So the disconnect is that. I mean, welcome to Washington. Come visit Washington. It's the same thing. But no one wants to make bad movies. Is it just age or is it not using these formats or not under the executives in charge?

• 19:56Speaker 00

  So it's certainly not just age. You know, my very first job in Hollywood, I worked for a very well-known television producer who was an incredible micromanager. And probably 85% of what he did was really valuable and great. And 15% of what he did was really destructive. And I would watch that 15% ruin things. And it was a really valuable lesson for me because it made me realize these things are so fragile. It's so remarkably difficult to make something great. There are literally millions of decisions from, and you know, you can have things with a great script and the wrong director, or a great script, the right director, and there's no chemistry in the cast.

• 20:40Speaker 00

  Or there's all sorts of reasons. You can have something that's not great and all of a sudden the right piece in music transforms it. They are, you know, insanely complex things to put together with lots of nuances. And, you know, there's all sorts of reasons why they don't turn out. You're right to say, people set out to make great things, but it's really hard to make great things.

• 21:04Kara Swisher?

  So when you think about yourself, like, as you said, you did this in your 40s. How do you then stay connected in some way where you're clocking the stuff? Because you could easily make, you know, the basic movie. You could do this in your sleep, right? Presumably, a lot of the movies, since you've done so many. How do you continue to change? And especially when these studios are run by people who are quite, you know, it's the same thing with media. I've, you know, I've always sort of been agitating that. I'm like, you're not understanding, especially when I was younger, what was happening here. But how do you stay cognizant of what's happening? Especially with this movie? Is there a moment when you would have missed backrooms?

• 21:42Speaker 00

  There's plenty of moments, yeah.

• 21:44Kara Swisher?

  Yeah.

• 21:44Speaker 00

  Any number of moments where I'll miss any number of things. You know, it's not like I'm so wonderful or I'm somehow better or different than everybody else. I think that.

• 21:56Speaker 00

  You know, what I used to say when I was running Fox, and I think it's still true, is that ultimately, those jobs as an executive and/or producer is your job is to have some weird affinity for the zeitgeist of the world's public two years in advance. That's your job. You're supposed to guess what they're going to be interested in two years in advance from now. And I used to say, if you were to design a job to isolate someone from the world's public, you would design the job of a studio head. You work behind gates. You generally live behind gates. You fly privately.

• 22:33Kara Swisher?

  The lunch is delicious.

• 22:34Speaker 00

  You're so isolated from people. And I think you need to do two things, which is you need to just force yourself, both force yourself and I guess instinctively be relentlessly curious. Just, you know, you've got to be looking at TikTok, not as a study project, but just because you're interested. What's going on? What's this about? You've got to be looking YouTube. You just have to be curious. And you've got to be relentlessly curious. And then you have to surround yourself with as many young people as you can. And let me be really clear. Backrooms was not found by me at the company. It was found by a young executive named Corey Adelson, who brought it to me. And I said yes to it, but she deserves the credit for it.

• 23:17Kara Swisher?

  What did she say that convinced you?

• 23:20Speaker 00

  She said, it's really cool. Read this. And, you know, she has real credibility with me, and I'm interested in those opinions. And, you know, I think the key is to both have young people, trust them, and be interested in what they have to say. I think it's the job of young people to force you to pay attention. You know, I used to say, again, I've always said to the people who work for me, if I pass on something that's good, that's your fault, not mine. And it's your fault for not convincing me. And you need to do whatever it takes to force me to pay attention, to convince me. And I used to say, you know, go burn down my car in the parking lot if that's what it takes. But you have to do whatever it takes to convince me that this is right, because I'm by definition

• 24:05Speaker 00

  obtuse, out of touch, all those things. And, you know, you want to create that environment where you have aggressive, opinionated, passionate young people, and somehow you don't put up enough stupid barriers so that you're not capable of listening to them.

• 24:21Kara Swisher?

  We'll be back in a minute.

• 24:30Kara Swisher?

  Support for this show comes from The Guardian. Trying to locate news sources that reliably separate fact from fiction can seem like looking for a needle in a haystack these days. Social media feeds, cable news, and subscription-based news outlets might be able to give you one version of the news, but not in the way that you need. You want news fast, but slow enough to actually absorb the information. Stateside with Kai Wright and Carter Sherman is here to do just that. The podcast tries to slow down the news and wrestle with the questions regarding the world at large at your own pace. Three times a week, hosts Kai Wright and Carter Sherman bring their expertise together to showcase different and engaging perspectives regarding the world today. They will use their collective knowledge to discuss the news, international affairs,

• 25:14Kara Swisher?

  climate, culture, sports, lifestyle, fashion, and wellness. Plus, The Guardian wants to emphasize they're not billionaire-owned, meaning they're free to report the whole picture without interference. Go to theguardian.com/stateside to learn more and listen wherever you get your podcasts, or watch on YouTube starting May 13.

• 25:34Speaker 02

  Ripple has been powering modern finance for a decade. We're leading the charge to bridge the gap between existing financial systems and the future of finance. You can have it all: legacy, stability, and digital innovation. Systems that work with your other systems. Because with the right partner, the question isn't crypto or traditional finance. The question is simply, why choose? A new standard of modern finance. It's happening with Ripple. For informational purposes only, availability of products can vary and may be provided by different Ripple entities.

• 26:05Kara Swisher?

  Support for this show comes from Hers. Losing weight on your own can often feel like a fight you never win. Luckily, weight loss by Hers offers access to the FDA-approved Wegovy pill and the Wegovy pen. Wegovy is the first-ever GLP-1 weight loss medication available in a pill, but also comes as a pen, so you've got options. With Wegovy, you can lose up to 20% of your body weight. People lost an average of 14% body weight at 64 years old. Four weeks in a clinical trial of Wegovy alongside diet and exercise. To get started with Wegovy, just go to forhers.com and complete an online consultation with a licensed provider who will determine if your prescription is appropriate. And Hers doesn't stop there. Nutrition and lifestyle guidance are part of the plan, along with access to 24/7 messaging

• 26:50Kara Swisher?

  with your care team, so support is always in reach. Ready to reach your goals? Visit forhers.com/cara to access personalized, affordable care for weight loss, hair, menopause, and more. That's forhers.com/cara. Individual results may vary, and stopping treatment may result in weight regain.

• 27:11Kara Swisher?

  Let's talk about the state of Hollywood broadly then, because as you and I know, since covering this, the slowness of the penny dropping about digital has been glacial, you know, and everything else. So every episode, we get an expert question from an outsider. Here's yours.

• 27:24Speaker 04

  Hey, Peter Chernin. I'm Ari Shapiro. I'm one of the hosts of the CNN podcast Engagement Party. And here's my question for you. I know Hollywood is going to try to do everything it can to replicate the success of Obsession and Back Rooms, these two horror movies that have brought people back into the theaters, blown expectations out of the water, and just dominated the moviegoing experience so far this summer. My question is, what do you think are the wrong lessons that Hollywood will reach? What do you think are the mistakes that Hollywood will make as it tries to chase the tail of these two movies that have been such runaway hits? Thanks.

• 27:59Speaker 00

  Thank you, Ari. Look, the lesson is what I just said, which is, go find the next YouTuber. Go buy something off YouTube. It's, you know, it has no relevance. Your job every day is to find something great, exciting, new, innovative, et cetera. You know, look, I would say, and you can understand this, Kara, managing innovation is an extraordinarily complicated thing, equally complicated for people in the tech world.

• 28:30Kara Swisher?

  Yeah.

• 28:30Speaker 00

  You know, everybody, you know, it's very easy to come up and say Hollywood is old fashioned. How to touch the tech world. I don't know, you know, how many tech companies that can you point to that have innovated repeatedly over a 20, 25 year period? They are, most of them, built off of one extraordinary innovation. And then they go on and, you know, it's no accident that there are very few companies in the world that stay among the top 10 companies in the world for more than 20 years. You know, managing innovation is extraordinarily difficult and it's difficult in Hollywood and you lose, you know, you reach the, the wrong lessons. I would also say that, you know, one of the challenges for tech is that, you know, on

• 29:13Speaker 00

  the one hand, data is an extraordinary gift and an extraordinary tool. It doesn't necessarily lead to innovation. It leads to extraordinary knowledge about how your audience, how your users are currently behaving. But if you just say, this is the way they're currently behaving, this is the way they're going to behave forever, you'll fail. Somebody else who does something brand new, out of the blue, will come up with something new and better.

• 29:38Kara Swisher?

  Right.

• 29:39Speaker 00

  And, you know, innovation is a very, very challenging thing to manage and, you know, managing content is essentially managing a form of innovation. They have, you know, very different kinds of elements involved in them, but it is managing innovation and innovation and creativity are largely the same thing. There, there's, there's some very different buttons and levers to push on both of them. But ultimately you are trying to get something new and exciting and fresh and original.

• 30:07Kara Swisher?

  So one of the things that, let me just click on something you said earlier about, even though a lot of these original films are doing really well, most of the movies are franchises, right? In which you've been relying on existing IP, I'll say it that way. How do you get P E Studios to be innovative and swing for the fences on a risky pitch when they can at least bank on some success with a safe, known quantity?

• 30:29Speaker 00

  You have management that thinks long term. Because by definition, these franchises, certainly over the last 10 or 15 years, have been much safer. However, by definition, you're going to run out of them. You know, and to the degree you are running one of these places, you should be thinking long term, which is I should be both maximizing my ability to monetize the existing IP that I own, and I ought to be creating new IP that's vital and vibrant, that will have the same kind of economic success over a long term. And that, you know, you can't do it to the degree, all you're doing is just making sequels.

• 31:08Kara Swisher?

  And you noted to CNBC that risk is ultimately the lifeblood of success. So how do you get Hollywood to take more risk, given, we'll talk a little bit about the sort of economic situation, these mergers, which will, you know, to me, the more merjury they get, the less risk-taking they get, given all the huge debt, et cetera, and worries about taking risks. What needs to change? Because Hollywood does, has gone through periods where they're very safe, and then they're very risky, right? I think the 70s was more risky. How do you get them to think if it's the lifeblood of success, as you know?

• 31:40Speaker 00

  I think it's a couple of things. First of all, you know, I think the danger thing is to equate risk with recklessness. And there are a lot of people who think risk is reckless. Risk isn't reckless. You know, the wrong risk is certainly reckless, but your job is to figure out, your job is ultimately make a series of bets all day long. And clearly, you know, you want to revitalize, you know, these things are nothing if not repositories of valuable libraries. There are two things. They are repositories of valuable libraries and lots of IP, and they're a manufacturing system that is allowing you to, to make creative choices 15, 20 times a year.

• 32:27Speaker 00

  You could certainly take risk inside of that portfolio without being reckless. A, the first thing to think about is a portfolio, which is, I ought to be doing X number of these things that feel big and safe. I ought to be doing X number of things in the middle that are less risky.

• 32:42Kara Swisher?

  Yeah, some bonds, some stocks, some cash.

• 32:44Speaker 00

  Yeah, I ought to be also taking some risk. That's number one. Number two is budgets. By definition, there's an inverse relationship between the size of a budget and risk-taking.

• 32:57Speaker 00

  And the creative community ought to understand that. To the degree the creative community wants to take risk, make things at lower budgets. And by the way, I think, in my opinion, that's the really interesting question around AI. And then I think it's, it's, look, it's also the job of leadership. The job of leadership is to have really talented people that you support taking risks. You know, I believe the best thing you can do is find really talented young people, figure out the good ones, and support them during failure. Because it's a really weird thing, because you are basically trying to run a manufacturing process that

• 33:42Speaker 00

  is managing creativity. And creativity is very closely associated with failure. Very, very closely. You know, you think about, and in lots of ways. One is, it's the scariest thing on earth. Think about what it is to be an actor. You know, to put yourself out there and get judged by people and saying, I don't like, I don't like her nose, or she's, you know, he's getting fat, or, you know, those are real, or, look, he looks like an idiot with that choice. That's terrifying. Being a writer, you've been locked in a room for nine months, you bring your script down to someone, say, well, that sucks. You know, they are really, and you, you want to create an environment that makes people feel safe being creative. And you want to do the same thing with.

• 34:25Speaker 00

  The people picking those things, you want to have bold people who both understand enough about the business, who learn the lessons from when they failed, but who also take risks.

• 34:36Kara Swisher?

  Safety is also starting to prove a little risky. We keep seeing these big movies underperform. The big one now is Star Wars, The Mandalorian and Grogu, which is interesting.

• 34:45Speaker 00

  Back to the point you asked earlier, the second thing that'll bring back risk is big failures. You know, you mentioned the 70s. The reason the 70s Hollywood innovated so much is all these big bloated spectacles that were playing it safe. Big musicals, probably the biggest of them was Hello, Dolly, which virtually bankrupted 20th Century Fox at the time. All those movies started failing. All the things that they were doing, Hollywood spectacle musicals, big westerns, blah blah, started failing, and they were forced to take risk.

• 35:12Kara Swisher?

  Right. That's a really good point. Although now, Hello, Dolly's seen all the time. Like, later, they have different lives, which is interesting. One of the things, of course, is the center of Los Angeles being that. There's been a big decline, as you know, in the number of projects being shot there. A lot of productions have moved out of state and overseas. As content becomes more global, is Los Angeles still the capital of the entertainment industry?

• 35:33Speaker 00

  Yeah, I would say two things. So, jobs in Hollywood have declined by about 35%, 40%. Some of that is tax credit related, some of that is global production related. Some of that, in my opinion, is about vertical integration. And by the way, I'm far more concerned with vertical integration than I am with mergers. And that's, let's think, you know, in essence, Hollywood has always been the center of global production. They have always, it has always been the center of looking for filmmakers in France, in Italy, and Korea, and bringing them here. And it's just been a nexus for...

• 36:17Speaker 00

  Ultimately, the financial underpinnings of that, you know, movies have always been made all over the world, in Canada, in England, you know, in other places. And so probably, I don't think Hollywood has become less central. I do think that the world has become more global. And, you know, one of the things, you know, I mentioned earlier that I had sold my production company, which I have sold to a French company called Mediawan. And one of the reasons I did that was that I believe that if you look at the platforms, Netflix, Amazon, Disney, Apple, have all become global. They are a global platform serving a global community. The production companies have not. The production companies have never been global.

• 36:57Speaker 05

  No.

• 36:58Speaker 00

  The big European companies were never successful in the US. The US companies never cared about the rest of the world. They were just like, we'll sell our stuff there. We won't make it. And I think there's a big opportunity for a global production company that is beginning to unite the highest quality talent all over the world.

• 37:15Speaker 05

  We'll be back in a minute.

• 37:24Speaker 05

  Support for this show comes from Indeed. When the pressure's on and you need to hire the right person for the job, Indeed Sponsored Jobs has got your back. Instead of forcing you to spend tons of time searching, Indeed Sponsored Jobs matches you with quality candidates fast. According to their data, sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored jobs. Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs. Spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results. When you need the right person to cut through the chaos, this is the job for Indeed Sponsored Jobs. And listeners to the show will get a $75 sponsored job credit

• 38:09Speaker 05

  to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. That's indeed.com/podcast. Terms and conditions apply. Need the right hire fast? Then this is the job for Indeed Sponsored Jobs.

• 38:35Speaker 03

  Parenting unlocks some pretty impressive skills like carrying grocery bags, a soccer ball, and a sleepy kid all at once. Good thing the newly designed Chrysler Pacifica has a few tricks of its own. Hands-free power sliding doors and liftgate, rear seat entertainment, and stow-and-go seating and storage that adapts faster than your family's weekend plans. Visit Chrysler.com to learn more. Chrysler is a registered trademark of FCAUSL C.

• 39:05Speaker 06

  Now for a quick message from Anthropic, the team behind Claude, the AI built for businesses. Customers count on their bank, and banks count on their most important systems. Now those systems count on Claude, and nine of the Fortune 10 companies use it for critical work. See why leading companies trust Claude at Claude.ai/SPAN.

• 39:30Kara Swisher?

  So one of the obvious biggest trends, and it's impossible not to talk about, is AI in Hollywood. You've also said you have an obligation to be relentlessly interested in new technology, and it's something I've liked about you because you weren't, there were like three executives who weren't terrified of tech, you, Barry Diller, and Bob Iger, I would say, not terrified of tech, essentially, or dismissive, one or the other. Obviously, AI is the latest, and there's been many over the many years, and your production company was one of the lead investors in an AI studio, Promise. Their goal was to actually make shows and movies using AI. Of course, it scares a lot of people in the industry. You know, is there a real loss of jobs? I think there is in certain areas and certain areas not. But talk about the worries that go on, given you've got to be thinking of costs, too.

• 40:14Speaker 00

  Yeah, let me be clear. I said two minutes ago that jobs in Hollywood are down 35, 40%.

• 40:19Kara Swisher?

  Right.

• 40:20Speaker 00

  I don't think there's a single job in Hollywood that's lost to AI yet, not one. So what's going on in Hollywood right now, which is devastating, and I'm deeply, deeply concerned about, I'd be happy to talk more about,

• 40:31Kara Swisher?

  Sure, please.

• 40:31Speaker 00

  has nothing to do with AI. So this, and by the way, it's typical, which is people are afraid of the wrong thing, right? Which is, they're already in big trouble and has nothing to do with AI. Can I guarantee, by the way, you know, there's widespread terror about job loss everywhere because of AI. And certainly, if you look at the economy today, inflation's a problem, jobs aren't. So we've yet to see that. It's always good to be paranoid. It's always good to be worried, but we haven't seen that. Look, what I would say, my instinct is the following, which is, nobody knows. We should all be super interested in what

• 41:12Speaker 00

  it is. You know, there's certainly an easy analog in the transition from hand-drawn cell animation to computer animation. That's something absolutely analog, which is it replaced humans with machines. Artistically, it was fantastic. And by the way, it was fantastic for jobs. There are more jobs in computer animation than there ever were in cell animation. So, and that's a pretty close analogy is that it was, if the guilds and people like that said, you got to protect human beings at all costs, we never would have had Toy Story and, you know, all of those wonderful CG animated movies. And so, by the way, the same thing is true with special effects. Special effects all used to be analog.

• 41:56Speaker 00

  They are, every single one of them is digital right now, and there are more jobs in special effects than there have ever been. And they're higher quality of special effects than there have ever been. So this sort of knee-jerk paranoia about technology is bad, it's going to kill humans, it's going to be, kill jobs, et cetera, I think is not smart.

• 42:15Kara Swisher?

  Right. A lot of people are worried about the valuations these companies are getting, you know, that these all, like, for instance, you know, Anthropic, OpenAI.

• 42:22Speaker 00

  But that's not, that's not a question about Hollywood. That's a completely different question about AI.

• 42:27Kara Swisher?

  Right, right. But you think it's that they're worried about, I want to ask what you're most worried about in a second, but there are, you are seeing some jobs from real actors, for example. There's, there's Business Insider wrote, for example, about so-called micro dramas and verticals that are using them, short-form series designed to be watched on the phone. Viewers are mixed on the results. This is, you know, is it a sign to come or not? I've always found them to be. Not good yet, but whenever I see something in internet that's not good, I just recall seeing early Yahoo, it wasn't very good. And I kept thinking it's going to get better, right? And the New York Times just did an interview with AI actor Tilly Norwood, which was strange, I thought.

• 43:07Speaker 00

  It was very strange.

• 43:08Kara Swisher?

  At one point, the importer asked Tilly, what's to stop her from taking other people's jobs or alienating humanity? One of the responses she gave was, quote, "Whether the people building me are willing to say no to profitable but corrosive uses." So you think it's just overhyped, this idea of that this will be what kills these companies or hurts them?

• 43:26Speaker 00

  I think it's completely overhyped. By the way, you know, if you look at what most technology has done is extended the power of storytelling. And so to the degree micro dramas, and I tend to agree with you, that most of them aren't very good now, we'll see if they become good. But they're not killing Netflix or YouTube or anything else or movies. They are a new form. And to the degree they are valuable in new form, you'll start seeing more actors in them. The reason they have AI actors in them is they are done incredibly cheaply. And it doesn't matter that they're that they're not high quality.

• 44:07Speaker 00

  To the degree that they become all of a sudden super valuable, people start casting actors in them.

• 44:14Kara Swisher?

  Yeah, right.

• 44:14Speaker 00

  You know, my simplistic view of AI is use it as a tool. Now, that tool, it may be just a tool. It may be a way to streamline the cost of pre-production. It may be a way to.

• 44:25Kara Swisher?

  Costuming.

• 44:25Speaker 00

  Yeah, it may be a way to, obviously, it has huge implications for special effects.

• 44:30Kara Swisher?

  I think it was Scorsese with the storyboarding.

• 44:32Speaker 00

  Yeah.

• 44:33Kara Swisher?

  Correct. He was in that Ovid's company.

• 44:35Speaker 00

  By the way, it may also give you tools to actually create new art forms with. We'll see. And it's interesting to embrace all those things. To the degree you're interested in telling stories to human beings, you should be interested in. The other side of it is rather than trying to restrict Hollywood from using it, because to the degree it's meaningful, you know, all you're gonna do is is make Hollywood smaller and smaller and smaller as these other things coming. Hollywood has generally been a place that is really good at, as I said earlier, the manufacturing process of storytelling. It should be extended to new art forms. Absolutely be really stupid not to do that, so it should be. The same time, I think it's important to say you should be relentlessly focused on copyright.

• 45:20Speaker 00

  You should be focused on you can't steal. You can't steal from these works to train large language models. You can't steal actors likenesses. You can't do those things. Those are very valid, in my point, in my view. Copyright is copyright and it should be sacrosanct. And I do believe that, by the way, I think Hollywood should be more aggressive about copyright.

• 45:38Kara Swisher?

  I agree.

• 45:39Speaker 00

  Right? Much more aggressive about copyright. And I think it's gonna be real. The copyright questions around AI are gonna be fascinating over the next five to 10 years.

• 45:48Kara Swisher?

  Yeah.

• 45:49Speaker 00

  But restricting AI, I don't get. I don't think it makes any sense. And I think that to the degree, look, it may not be meaningful. It may be partially meaningful or it may be meaningful, but in any of those answers, Hollywood should be playing a part in it.

• 46:02Kara Swisher?

  What's the most interesting thing you've seen and something you've seen you've been like, oh, come on, no.

• 46:07Speaker 00

  With AI?

• 46:08Kara Swisher?

  Yeah, with AI.

• 46:09Speaker 00

  The most interesting thing is, and I won't name them because it hasn't come out yet. There is a a cable network that has started experimenting with some large scale documentaries.

• 46:26Speaker 00

  A hundred percent AI.

• 46:28Kara Swisher?

  Pulling from archives archival or?

• 46:30Speaker 00

  Just making stuff, just saying, you know, do a caveman drama or do the fall of Rome.

• 46:39Kara Swisher?

  Ah.

• 46:40Speaker 00

  Right? Using AI. And I've seen 10 or 15 minute segments that they've done a hundred percent AI that are fascinating and and really impressive.

• 46:50Kara Swisher?

  There's little experiments like that online in little short form, like, you know, it's usually around hardware or making something, but go ahead.

• 46:57Speaker 00

  But that's to me the most impressive stuff. You know, the the, you know, and look, we are the the company that we invested in Promise Studios, which is doing a wide range of stuff, all of it interesting to me. And we invested mostly because we believed in the leadership and because we were really interested in learning. I would say, if you asked me to judge today, television animation, good enough to make television animation today, good enough to make commercials today, good enough to make some reality show level quality stuff today, good enough to make special effects, getting closer on feature film quality animation, and still pretty far away

• 47:40Speaker 00

  of making true narrative storytelling with actors, right?

• 47:43Kara Swisher?

  Yeah, documentary is actually a great way to do that because there's so much stuff. Like, why do you need someone, person, to do the fall of Rome when there's, there's just history?

• 47:51Speaker 00

  Nobody can say that's not what it looks like because we weren't there. But what is, I want to go back to what I said earlier, which is what I think Hollywood, and particularly young people, should be excited about is to the degree that it's a valid tool to make things. It should play a meaningful role in driving down costs. And if you can drive down costs, you can innovate more. And, and I think in some ways, the thing I would be most excited about is the match of 22-year-old, 22-year-old genuine storytellers and AI. Because they're going to be people, there're going to be some young people with great imaginations who are going to get better at the technology than anybody else, who are going to make $500,000 movies that are great.

• 48:35Speaker 00

  And who are going to, and they'll be, there should be 100 of them being able to be made. That's great for the art form. That's not a bad thing. That's a great thing for the art form. And anybody who's interested in the art form should be interested in any innovation that has the opportunity to drive down costs. Because the single most challenging thing to the art form right now is how expensive it is to make things. You know, when the average studio movie is, whatever it is today, $80 million, plus has another $50 million of marketing behind it, it's a challenge to innovate at $130 million debt.

• 49:08Kara Swisher?

  It is, and that's how the internet got started. Those are all small companies riding off of everyone else's, like, free stuff.

• 49:14Speaker 00

  Take some chances.

• 49:15Kara Swisher?

  Well, you did say one thing that worries more and more than mergers. I did want to end talking about mergers in Hollywood. And as you noted earlier this year, you sold your content studio, North Road, to the French entertainment giant, Media One. As you said earlier, you felt like it was time for content companies to get bigger and become global as entertainment and tech platforms consolidate. When you think about, you said mergers aren't the problem, it's, it's something else.

• 49:37Speaker 00

  Vertical integration, vertical integration.

• 49:39Kara Swisher?

  Explain that for people, what that means.

• 49:42Speaker 00

  Vertical integration just means that one company is controlling the entire process. They are making things, owning things, and distributing things. So if you look at the big platforms, they produce, own the production, own all rights in perpetuity, and distribute it only on their platforms.

• 50:04Kara Swisher?

  Netflix.

• 50:05Speaker 00

  Right. Netflix app, by the way, Netflix is no worse than Apple, Amazon, right, Disney, all these people want to control everything. There are a couple of big negatives to that. If you go back to the seventies, which you refer to as the seventies and eighties were really when Hollywood exploded, and you had two things that separated that. You had a consent decree, which said the studios weren't allowed to own movie theaters. And so it separated movie production from movie distribution. And you had the financial interest syndication rule in the television business, which said the networks could not own the shows, they could only license them. Right? It led to the explosion of the movie business.

• 50:49Kara Swisher?

  Production companies, creative.

• 50:51Speaker 00

  It led to every single one of those studios, which were dying in 1970, became the dominant television producers. Disney, Fox, Universal, Paramount, Warner's, all became the biggest television producer. And it's really what led to their growth in that 25-year period. What you have right now is, so.

• 51:11Speaker 00

  I believe it would make the ecosystem far more vibrant. That's number one. Secondly is this idea that things don't go from one platform to another because all rights are held in perpetuity is just bad for things circulating.

• 51:26Kara Swisher?

  Right. So it stays in Netflix, stays in Apple.

• 51:29Speaker 00

  Yeah. And by the way, it becomes just an old piece of content on Netflix versus you look at the number of things that became hits on the second platform they were on when they got marketed again or, you know, you know, look at Seinfeld, which was, by the way, a big success on NBC, not in the first year, but was a big success later, has become ubiquitous in syndication. The Simpsons ubiquitous in syndication, et cetera, et cetera. So that's a bad thing. The third thing is I believe it's bad for creativity because you have every single creative decision funneling through one hierarchy. And creativity thrives where it's messy, where there are people arguing about things, where, you know, if one person doesn't get it, somebody else is going to get it somewhere else and we'll innovate somewhere else.

• 52:14Speaker 00

  And so I believe it's very valuable to have creativity thriving. And then the fourth thing I would say is that what's happened in this process is there's no, there's no economic hits for talent. There's also much less economic failure for talent. There's unemployment for talent and unemployment is meaningful, but once you make something, there's no failure. You're getting paid the same whether something succeeds or it fails. That's a terrible thing.

• 52:43Kara Swisher?

  So there's no incentive?

• 52:45Speaker 00

  There's no, there's, there's both no incentive and there's no terror. And being terrified as a creative is a great thing.

• 52:52Kara Swisher?

  That's a really good point.

• 52:53Speaker 00

  Right.

• 52:53Kara Swisher?

  Yeah. Yeah, you get paid, you get paid less, but you get paid, so it's safer.

• 52:56Speaker 00

  You get paid and, and, and you're also not incentivized to kill yourself to make it great. You're not, they're not incentivized to promote things as they used to be, et cetera. And so I think vertical integration is really bad for the system. I think to the degree I'm scared, you mentioned what else, what I'm terrified of is vertical, the impact of vertical integration on the Hollywood storytelling community because the stronger those vertically integrated companies get. They will look to squeeze talent because it's just a cost. It's a widget. It's the cost of a widget. If you're in the widget business, drive down the cost of widgets.

• 53:31Kara Swisher?

  Sure. So should there be regulation or maybe antitrust enforcement to force them to move away?

• 53:35Speaker 00

  I believe that that would be more valuable from a regulatory point of view than regulating consolidation. I don't think consolidation is wonderful, but I don't. I think that if you were to be able to regulate one thing, I think regulating vertical integration would be far more valuable.

• 53:53Kara Swisher?

  I hadn't thought about this. Yeah. Now, you said you're supporting the pending merger of Paramount and Warner Brothers because you want to see another strong competitor.

• 54:00Speaker 00

  Yeah.

• 54:01Kara Swisher?

  Right now, the antitrust grounds are pretty weak. There's still 20% of the market in certain areas.

• 54:06Speaker 00

  And I think that, you know, I worry about, look, I think in the current situation, what would be the single best thing to happen is another strong competitor. And whether or not it becomes that, I can't tell you. It'll be a function of how smart and talented and strategic they are. But if they became another strong competitor, it would be good for the industry.

• 54:29Kara Swisher?

  It doesn't just make them a taller, like, Oompa Loompa? Like, you know, they're not big enough for these, because a lot of these are tech-fueled, right? And I would not call, Paramount is tech-fueled now, but not exactly the same way.

• 54:40Speaker 00

  It's not.

• 54:40Kara Swisher?

  It's not.

• 54:41Speaker 00

  It's not.

• 54:42Kara Swisher?

  Trust me, I know. I get that.

• 54:43Speaker 00

  It may be down the road, and that's what they're, but it's not yet.

• 54:47Kara Swisher?

  No.

• 54:48Speaker 00

  No. Look, I think that it is certainly a big, big challenge for Hollywood. And someone who understands something about both worlds like you should be thinking about this more is that these are small companies.

• 55:04Kara Swisher?

  They are.

• 55:04Speaker 00

  Larry Ellison personally is bigger than Disney, is bigger than Comcast, is bigger than, you know, is bigger than, and so particularly when you look at YouTube, YouTube's part of a, what, $3 trillion company? You know, the biggest media company right now. I would call Netflix a tech company. In that case, the biggest media company is Disney, which is 200 billion dollar company. You know.

• 55:25Kara Swisher?

  Yeah, I was arguing at one point a couple of years ago that when they were challenging the AT&T Warner merger, which didn't turn out to be a good merger, but that had to do with dumbasses running it. But I was more like, I was arguing with one of the antitrust people, I go, they're too small compared to the tech people. You don't understand. I hate to say it, but consolidation is the only way they're going to survive.

• 55:47Speaker 00

  It is the only way they're surviving right now.

• 55:48Kara Swisher?

  And but I was like, I don't like it, but you've now got these tech companies in these pole positions where they control every bit of distribution.

• 55:56Speaker 00

  I think one of the giant questions, to the degree they end up controlling these things outright, is can they get good at managing creativity? And there are huge differences, which I'm not sure they've thought about, between managing technological innovation and managing creative innovation.

• 56:16Kara Swisher?

  So when you have something like a Paramount one, Paramount Warner one, David Ellison has promised to make 30 theatrical films a year if the deal goes through. Others, we'll see, it is all likelihood going through, but I'm looking at the math of 80 billion dollars in debt and everything else, and I watched, you know, what happened to Warner before that. It seems to me they're still small, even if they seem irritating in the news area, which they are, and they're somewhat boneheaded in the news area, more than boneheaded. You don't have, you can comment if you want, but I don't see that they're big enough, and I see the number, as a matter how rich Larry Ellison is, 80 billion dollars in debt is kind of a big thing to drag behind you.

• 56:59Speaker 00

  Look, I think I said this before, I'm not inside their books. It's very challenging. You know, it's challenging to make 30 movies, it's challenging to continue to build the streaming service, and doubly challenging while your core business, which is linear channels, is in decline. So they've got a, they're the ones making the bat, not me. They've got a really hard task ahead of them, and God bless them, I hope they succeed, because it'd be good for the business, but.

• 57:29Kara Swisher?

  Would Netflix have been a bigger owner, or was that been more disastrous? Because I think Netflix is going to come in and buy it all up at the end when they fail. That's my feeling.

• 57:38Speaker 00

  I think that, well, it depends on success. If Paramount could succeed, that's better because what the world badly needs is a competitor to Netflix primarily right now. So in that sense Netflix wouldn't have been, Netflix certainly wouldn't have been a better owner in the short term, but if it goes out of business, I guess it would be a better owner.

• 58:02Kara Swisher?

  Yeah.

• 58:02Speaker 00

  That's the sense in which I said I was rooting for it to be successful because I

• 58:05Kara Swisher?

  Which gets us back, you said Netflix is the one to beat, but YouTube is the one, speaking of something.

• 58:10Speaker 00

  YouTube is absolutely the one to beat, but to say, you know, I don't buy, you know, which is the Netflix argument, or was the Netflix argument when they're in, I don't believe that YouTube and Netflix are direct competitors right now, right? I think everything is competitor for human, for people's times, everything, but that's like saying, you know, Netflix is competing with video games or Netflix is competing with sports or going, you know, there's enormous competition for people's times. Netflix is a streaming long-form video service. Netflix, YouTube right now is, I guess, largely a short-form video service with a little bit of a essentially virtual cable channel, you know, virtual MSO thrown in there, though that's a small part of their business on a relative basis.

• 58:54Speaker 00

  So, you know, individual people who work in the business are not waking up saying, should I go with YouTube or should I go with Netflix? There's zero competition. So this idea that they're competing with each other, they're competing each other in the same way that you're competing with Netflix, or that you're competing with the New York Times, or you're competing with, you know, video games. It's, you're competing for people's times.

• 59:16Kara Swisher?

  Yeah, yeah, that's true. That is absolutely true. So do you think this Warner thing has a chance? I mean, you don't know yet, but I, I think it's not going to work out well. That's, I just, I just have watched so far.

• 59:29Speaker 00

  I think it's challenging.

• 59:30Kara Swisher?

  Yeah, you're nice, you're nice. They can't do it. I just don't think, I don't know. I'm one, I'm not a fan of inherited wealth, so that's fine. Like, and, but great movie, Top Gun, Maverick, I love it. So you've just turned 75 years old, you've been in the business a long time. Have you thought about retiring? How do you look at what you want to do next and your legacy amid these monumental changes? You've worked for, through every aspect of this, including working for Murdoch and everyone else.

• 1:00:00Speaker 00

  The idea that business people have a legacy seems Beyond silliness. Beyond silliness.

• 1:00:07Kara Swisher?

  Stop not being narcissistic, Peter.

• 1:00:09Speaker 00

  And it's the ultimate hubris. There are four or five business people a century who have a legacy. So that's ridiculous thing to think about.

• 1:00:17Kara Swisher?

  All right.

• 1:00:18Speaker 00

  So I have no legacy. I'll be dead. That'll be that.

• 1:00:21Kara Swisher?

  You greenlit, sir. You greenlit Titanic and Avatar.

• 1:00:25Speaker 00

  Then I can remember that. Look, I am interested in being interested in stimulating. I'm interested in spending more time with my family. You know, I have a charity that I've been involved with for a very long time. Malaria No More. That I'm deeply interested. I have a new charity that I just started called Billion Scale Health, where we're doing extraordinary things trying to use technology to build health scale solutions for a billion, for potentially a billion people. So I'm engaged in that. I still want to do creative things. I have projects that I'm producing and that I'm interested in. I will help this French company, of which I think I'm the largest shareholder. So I'm interested in being stimulated and fulfilled. And I'm interested in helping, you know, the greatest satisfaction from a business perspective for me right now

• 1:01:09Speaker 00

  is helping talented young people.

• 1:01:12Kara Swisher?

  Mm hmm. Absolutely.

• 1:01:13Speaker 00

  But I have no legacy.

• 1:01:15Kara Swisher?

  Yeah. All right. All right. Fine.

• 1:01:17Speaker 00

  Unfortunately, Carrie, you may not either.

• 1:01:19Kara Swisher?

  I do. That's not true. I'm a media entrepreneur. I have, no. All these people are chasing the stuff I invented. I am. I shall be remembered by my children, at least. It's interesting. I haven't seen you at the White House groveling to Trump at all once.

• 1:01:33Speaker 00

  I guess I haven't been there, no.

• 1:01:35Kara Swisher?

  Are you not going to the UFC fight? What?

• 1:01:37Speaker 00

  I'm not going to the UFC fight. By the way, I never really liked UFC, so. Um, no, I will not be at the UFC fight.

• 1:01:44Kara Swisher?

  Oh, damn. Anyway. Anyway, Peter, as usual, you're really smart. You do have a legacy. I don't care. I'm going to just say that.

• 1:01:52Speaker 00

  We'll see.

• 1:01:53Kara Swisher?

  Yeah.

• 1:01:53Speaker 00

  We can ask each other that question in 20 years.

• 1:01:56Kara Swisher?

  You have enormous patience given to some of the jackasses you've worked for over many years. I'll tell you that. Me too. Anyway, that's, save that for your, are you writing a memo? Are you writing that?

• 1:02:04Speaker 00

  I would never write a memo. It's the least interesting thing on earth. It was so uninteresting.

• 1:02:11Kara Swisher?

  I'll just continue to go out to lunch with you and hear the stories. That's how I'm going to go with it. That'll be my memoir. Anyway, Peter, thank you. And it really is. Backrooms is really interesting. And when I saw, I've always thought you made a lot of interesting choices and surprising choices. And I was very happy to see this work out for your company.

• 1:02:26Speaker 00

  Well, thank you. I enjoyed it and congratulations on your new home.

• 1:02:30Kara Swisher?

  Oh, thank you so much. Yeah, right. Oh, I have another Murdoch. What should I do?

• 1:02:35Speaker 00

  You're back.

• 1:02:36Kara Swisher?

  No, I own my own IP, Peter. I mean, come on. It's just, and it's also the best Murdoch. I have the best Murdoch now. And it is a low bar, but it is, he is the finest Murdoch of the Murdochs. No comment. No comment from Peter.

• 1:02:50Speaker 00

  To be fair, I had a very good run with Rupert and

• 1:02:54Kara Swisher?

  You did.

• 1:02:55Speaker 00

  Rupert treated me extraordinarily well.

• 1:02:58Kara Swisher?

  He is a legend.

• 1:03:00Speaker 00

  We had a huge amount of fun and we did great things together. So

• 1:03:02Kara Swisher?

  Yep, he did. He did a lot of great things. He also did a lot of deleterious things, but nonetheless, it's a mixed bag. Anyway, thank you so much. I really appreciate it.

• 1:03:10Speaker 00

  My pleasure. I enjoyed it.

• 1:03:15Kara Swisher?

  Today's show was produced by Christian Castor Rossell, Michelle Aloy, Catherine Millsop, Madeleine LaPlante-Duby, and Kaitlin Lynch. Nishat Kurwa is Vox Media's executive producer of podcasts. Special thanks to Annika Robbins, Corinne Ruff, and Julia Sharp Levine. Our engineers are Fernando Aruda and Rick Kwan, and our theme music is by Track academics. If you're already following the show, you helped make a YouTube series a box office smash. If not, you're watching an endless loop of bad sequels. Go wherever you listen to podcasts, search for On with Kara Swisher, and hit follow. Thanks for listening to On with Kara Swisher from Podium Media, New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Thursday with more.

• 1:04:02Speaker 07

  When everyone's finally together, what makes mornings even brighter? Keeping things deliciously simple. Whether you're pouring up a glass of morning refreshment or topping off festive drinks for a family brunch, Simply Orange brings that 100% fresh squeezed taste to every moment. Deliciously bright and delightfully easy, Simply Orange is made for all your seasonal gatherings. Simply Orange, say yes to simple.

• 1:04:31Speaker 02

  Reimagine how you do wellness with new, first-of- their-kind Mochi Bites from the number-one gummy supplement brand, Ollie. Multi, beauty, energy, and sleep Mochi Bites are certified vegan, gluten-free, made with naturally sourced sweeteners, delectably tasty, and take your routine from mundane to extraordinary. All while delivering the same expert benefits. Elevate your wellness with Mochi Bites today. Sold exclusively at Target. These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.

• 1:05:01Speaker 03

  Check home worries off your list and save up to $5,000 on repairs with Virginia Foundation Solutions. Wet basement, foundation cracks, uneven concrete? Leave those to us. Small problems can lead to bigger repairs when left unchecked. Virginia Foundation Solutions provides waterproofing, foundation repair, and concrete leveling to help keep your home dry, stable, and secure. You've got enough on your list. Let us handle the repairs. Schedule your free inspection with Virginia Foundation Solutions today.