Crypto News: Deal frenzy, Netflix tackles live, Ari’s new venture

Many business leaders believe that the second presidency of Donald Trump will lead to a deluge of new deals. David Zaslav said as much on Thursday. The new administration "may offer a pace of change and an opportunity for consolidation that may be quite different," the Warner Bros. Discovery Inc. chief executive officer said on an earnings call.

While executives have complained about the anti-business bent of the current administration, dealmaking in media and entertainment is already brisk.

Three of the biggest companies in the industry – Amazon, Paramount and Warner Bros. Discovery – have closed multi-billion dollar deals in the last few years. The two biggest talent agencies, CAA and WME, have either changed hands or are about to do so. The record business already consolidated to just three companies and the deal market for music catalogs has been strong for many years.

While the flood of cash into production companies stopped, that was because of a crisis in Hollywood and rising interest rates. The big companies that have sat on the sidelines either don't generally do large deals (Apple, Netflix) or have been digesting big ones already (Comcast, Disney). Apple sat out of the Paramount process because it didn't want to buy the company — not because it feared the government.

That being said, more consolidation in many areas of media, from cable networks to streaming to local TV stations, feels inevitable. We're going to talk about one area ripe for consolidation next week; for now we've got a more fun story.

But first, a mea culpa. In last week's newsletter, I wrote that Disney bought the US rights to the Grammy Awards; in fact it bought the global rights. I was also off on the price. While others reported Disney is paying about $50 million a year and I reported $60 million, the real number is even higher. (I was told it hit nine figures per year, though Disney said that isn't true.)

Five things you need to know

Shari Redstone will leave the board of Paramount after the company merges with Skydance. Before closing the Skydance deal, Paramount had months of talks with both Warner Bros. Discovery and Comcast about potential deals, per an extensive filing.
Ari Emanuel is raising a boatload of money to buy live entertainment assets.
LeBron James is in talks to merge his media company with the producer of The Kardashians.
The most-watched movie of the last 5 years is Moana. Thomas Buckley tells the story behind the sequel, which started as a TV show.
Beyoncé earned the most Grammy nominations of any artist (11). She will compete with past winners Taylor Swift, Billie Eilish and five others for Album of the Year, a prize she has never won.

David Chang has screwed up the texture of tteokbokki. The plate of Korean rice cakes, a holiday staple in South Korean households, is one of three dishes that the American celebrity chef is making for his guests, actor Josh Gad and rapper Wiz Khalifa. But unlike most cooking shows on TV, where the chefs perfect the dishes well in advance of taping, on this one Chang is making all of them live on Netflix. With no time to start over, Chang has to serve the mushy cakes.

"This is not what I signed up for," says Gad, before awarding the dish a score of four stars out of five. A gift of friendship, he jokes. Khalifa gave it three stars. Chang would end up losing in competition with fellow chef Evan Funke, whose seafood pasta earned five stars from Gad and Khalifa.

Celebrity chef David Chang is trying his hand on a live cooking show on Netflix Photographer: Andrew Bezek

Imperfect food isn't what Chang wants to serve in his restaurants, but it is exactly what the 47-year-old intended for his TV show, Dinner Time Live With David Chang, which is part of a growing slate of live programming at Netflix. In just the past couple of years, the streaming service has aired a live tennis match, a hot dog eating contest, a comedy special and, in a few days, a boxing match between Jake Paul and Mike Tyson.

The presence of live programming at Netflix is still a bit strange and disorienting — even for people who work there. After all, the company created its streaming service as an alternative to live TV. While cable asks viewers to show up at a certain time and place, Netflix allows customers to watch what they want, when they want — and without obligatory advertising.

But as Netflix has gotten bigger, it has modified its approach. After losing customers in the first half of 2022, it introduced advertising (optional for a lower subscription fee) and cracked down on password sharing – two things it once foreswore.

Live programming is a natural complement to Netflix's fledgling advertising business. Only a small fraction of its current customer base watches streamed content with advertising because the company already has so many customers who pay to avoid ads. Yet live programming allows Netflix to put advertisements in front of all its customers, creating additional inventory it can sell. Even customers who pay for an ad-free plan will get commercials during football and wrestling.

It's also a vital new step for a streaming service that wants to offer customers a taste of every type of programming. Brandon Riegg, the company's head of unscripted content, advocated for Netflix to add live programming years before it did. A former executive at NBC, Riegg had seen Netflix expand from scripted dramas and comedies into stand-up comedy, movies, documentaries and foreign-language programming. (Netflix even tried and then pulled back from interactive storytelling.) If Netflix was going to try to replicate all of TV, shouldn't that include live?

When Riegg finally secured the blessing from his bosses at Netflix, he went about assembling a programming slate in much the same way he did with unscripted, where Netflix produces shows such as Love Is Blind and Queer Eye. He looked at what worked on TV and judged what could work for Netflix.

Riegg started with a live stand-up comedy show in which Chris Rock addressed being slapped by Will Smith for the first time. Then he did a live reunion of Love is Blind, which was a technical disaster. Due to a bug, many people couldn't access the special when it went live.

Love Is Blind is the only major technical failure thus far. But to prepare for bigger events in the future — including three hours of live wrestling every week starting next year — Netflix has commissioned a few of what it calls 'low profile live' events.

These are shows like Chang's Dinner Time Live and Live From the Other Side with Tyler Henry, which have a small enough audience that Netflix is comfortable using them as experiments to test its technology. During the live taping with Gad and Khalifa, Netflix intentionally shut off its serve on the west coast to replicate a system failure. (The transition to the east coast server was "seamless.")

"I want to break the signal and see how we recover," said Jonathan Mussman, a Netflix executive in charge of producing live and unscripted shows.

Chang sees live as the only way to stage a modern cooking show. Before he started his career working in restaurants, he learned to cook watching chefs like Emeril Lagasse and Martha Stewart on TV. Yet as Chang blossomed into the owner of a restaurant empire and his own media company, he realized that social media and the internet had rendered the classic cooking show antiquated.

"The last frontier to separate is people that actually know how to do something live under speed and pressure, like real kitchen stuff," he says after testing the dishes he planned to make for Gad and Khalifa. "The liveness adds stakes to the cooking." With some help from his pal, late-night host Jimmy Kimmel, he built a state-of-the-art kitchen in the office of his media company in downtown Los Angeles.

Most Netflix customers still have no idea that the streaming service offers live programming. Netflix needs to release a higher volume of programming — in particular big, loud hits like The Roast of Tom Brady.

The centerpiece of Netflix's biannual comedy festival, The Roast ranked as one of its most popular titles in the first half of the year and remains a fixture of gifs and memes online. Netflix co-Chief Executive Officer Ted Sarandos ordered a sequel within minutes of its conclusion.

The upcoming fight between Paul and Tyson will be Netflix's most-watched live event yet, says Riegg. Paul was the star of an episode of Netflix's Untold docuseries. The episode was so popular that it led to a larger conversation about what Paul and Netflix could do together. Paul proposed doing his next fight on the platform and mentioned having spoken to Tyson. Riegg and his deputy Gabe Spitzer were immediately hooked.

Mike Tyson speaks in a promotion for the upcoming Jake Paul vs. Mike Tyson boxing match Photographer: Sarah Stier/Getty Images North America

"As more people become aware we have the interest and capability, ideas will come to us," Riegg said.

While Netflix has experimented with one-off exhibitions in tennis and golf, the boxing match is the first live sporting event on Netflix where the results impact the participants' career records. (Considering Tyson is 58, this will hopefully be his final exhibition.)

While it's easy to dismiss the Paul-Tyson matchup as a publicity stunt, there is no confusing what comes next: two real NFL games on Christmas Day. While Netflix has long been dismissive of its interest in sports, the NFL games will be the first major professional sports to appear live on Netflix. The company plans to tweak the formula for a normal NFL game and has discussed staging a live music performance during halftime of one of the games.

Riegg is still trying to manage expectations. Netflix doesn't want investors to think it's about to blow $2 billion on the rights to show live sports every week. There are few major rights available in the next couple of years, save for the Ultimate Fighting Championship. Netflix would prefer to own, or at least fully control, sporting events as it will with WWE, when wrestling's flagship weekly program comes to Netflix in January.

Yet having seen Netflix's methodical entry into almost every area of programming, including sports documentaries, it does feel like a matter of time before it adds more live content, from a singing competition show to live sports.

Broadcast ratings for this year's election fell by about 25% from four years ago. That's no surprise. The 2020 election was a nailbiter; we didn't know the results for several days. This election was over before I went to sleep Tuesday night.

But there are other reasons why ratings are down. The big one is a change in customer behavior. The pay-TV business has lost about 24 million customers since the start of 2020.

People are following the news in different places than they once did. They watch videos on YouTube, Instagram and TikTok. They listen to podcasts. They use streaming services.

The Trump campaign spent a lot of time appealing to young men via podcasts and YouTube rather than appearing on TV. As my colleague wrote Wednesday morning, "Podcasts Didn't Decide This Election, But They Helped." Or, as Peter Kafka noted, we could call this the YouTube election.

Trump's first presidency was a boon for the news business, as both liberals and conservatives followed the president's every move. While Trump's second term may have a similar impact, some experts believe the average person is exhausted by politics. Interest in this year's election was muted until Kamala Harris entered the picture and made it more competitive.

Warner Bros. bounces back

Shares in Warner Bros. Discovery spiked Thursday after the company reported a surge in new streaming customers. While some of the stock market reaction can be credited to the election – deal time! – the results were a pleasant surprise to investors.

The company added 7.2 million new customers by introducing Max to more overseas markets and reported a profit of $289 million in its direct-to-consumer business. (Reminder: this includes legacy HBO.)

Even with the momentum in streaming, the company's total sales shrank. Warner Bros. Discovery and Paramount are in similar situations. Their streaming businesses are growing and profitable. But they aren't growing quickly enough to offset the rapid declines in pay-TV. Warner Bros. Discovery's TV networks suffered a 13% dip in advertising sales even with the Olympics in Europe. Its studio business also suffered from a tough comparison to Barbie last year.

The No. 1 album in the world is…

Tyler The Creator's Chromakopia. The Los Angeles rapper delivered the biggest sales week of his career and one of the biggest debuts of the year. He outsold new records from Eminem, Post Malone, Future and 21 Savage.

Deals, deals, deals

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Roblox will ban kids under the age of 13 from social hangouts.
Riot Games has spent $250 million making the TV series Arcane for Netflix with very little to show for it.
Bill Ackman is pushing for Universal Music Group to delist in Amsterdam and domicile in the US. The music giant said it is aware of Ackman's post and wasn't involved in formulating it.

I don't understand how anyone ever says they can't find anything to watch. I finished The Old Man just in time to watch The Diplomat, which I need to finish in time to watch Say Nothing. And that doesn't include catching up on Bad Monkey.