Innovate - US Zeitgeist 2010

Uploaded by zeitgeistminds on 14.09.2010

I'm Tim O'Reilly.
I'm the founder and CEO of O'Reilly Media.
I'm a conference producer and book publisher and I've been
involved in a number of the revolutions in technology
in Silicon Valley.
I was -- I created the first commercial website back in
1993, first ad-supported site.
I organized the meeting where the term "open source software"
was adopted by a collection of free software leaders.
And I sort of popularized the term "Web 2.0," when everybody
was down in the dumps after the dot com bust.
And right now I'm involved in promoting this new revolution
that's happening at the intersection of sensors and
robotics and smart manufacturing called
the Maker Movement.
We had an event in San Mateo this last spring that drew
80,000 people playing with stuff." Smart stuff and dumb
stuff made with smart tools.
John Markov said it was the closest thing he'd seen since
the West Coast Computer Fair which started the personal
computer revolution.
And I'm here to tell you that innovation does not begin
with entrepreneurs.
It begins with people having fun.
And that doesn't mean that you can't make money, that you
can't figure out how to get a profit.
What it does mean is that the innovation engine has a number
cylinders and they have to fire in the right order.
If you go after the money first, your engine misfires.
So when you think about it, you know, the Wright Brothers,
they didn't want to build an airline; they wanted to fly!
You know, when those guys got together the Homebrew Computer
Club, they had no idea -- maybe a couple of them did.
I don't know about Bill Gates and Steve Jobs.
But so many of them, they just wanted to have a
computer for their own.
When we were first playing with the World Wide Web, it was
just because it was so cool.
And after while, you get a sense of the possibility of
what excites you, and then you start thinking about changing
the world and you start having a really big idea.
You know, a computer on every desk and in every home.
Or access to all the world's information.
Or the end of malaria.
These are big ideas.
You want to change the world.
That's the second cylinder of the engine.
Because when you have a really big vision, it
keeps you on track.
It lets you try things.
Because you know that you're trying to go somewhere.
The third cylinder is where the entrepreneur comes in.
That's when you realize that you actually have to have a
business model, you have to have customers, you have to
figure out how to get other people to help you build your
vision, and you start to build that team, that company.
But it doesn't start there.
And then the fourth -- and I think in many ways, the most
important -- cylinder in this engine -- and I'm sorry, it's
just a four-cylinder engine; maybe somebody has an eight- or
twelve-cylinder -- is the idea that you create more value than
you capture for yourself.
One of the things that has gone very, very wrong in our economy
is that we have company after company that is trying to take
more out of the system than they create.
Innovation is about creating value, and what you see in
great companies is that they built a platform that
builds value for others.
If you look at the personal computer or the World Wide Web
or what's happening now on smartphones, you know,
the money isn't being made by one company.
It's being made by an ecosystem.
And the people who build those platforms are, in fact,
creating and nurturing that ecosystem.
They're creating way more value than they capture.
This is also one of my passions.
I'm trying to teach government how to think like a
platform provider.
Now, right now we have this government model that's a
little bit like a vending machine.
We pay in our taxes and we get out services and the government
thinks they've got to, you know, fill the vending machine.
And instead, if you look at the great government successes like
the Internet or like the GPS system, it's building some kind
of platform capability that society then expands on, uses
the platform and creates value.
So I like to say that Ronald Reagan is the father of
Foursquare because it was in 1983 that it was a U.S.
airliner that strayed into North Korean airspace and was
shot down and he said, "Whoa.
When this GPS thing you Air Force guys are working on is
finished, please, you know, let's open it up for
civilian use."
Didn't happen for another 17 years, but
eventually it happened.
And, you know, we've seen the explosion of location-based
services as a result.
So this idea of platforms and of creating more value
than you capture for yourself is so central.
And so I urge all of you, in your thinking about the
companies that you build, look for excitement, look for fun,
and then you will start to find things that really matter.
Because what -- we are all hungry for meaning, and the
things that do excite us and that fill us with joy are
usually things that have big impact.
And so you follow that -- that joy, that bliss.
You try to create value for the world.
And then you build business as a natural outcome
of what you started.
And so that's my framework for thinking about innovation
and we're going to have a conversation here with three
people who I think have built businesses in that spirit.
And we're going to start with someone who, like me, remembers
just the sheer joy of the early World Wide Web, before it
became commonplace and accepted, but he also took that
joy and he figured out what it took to build one of the
net's great businesses.
Please welcome Jerry Yang, the founder and chief Yahoo --
cofounder, chief Yahoo.
Jerry Yang: Thanks, Tim.
Well, I have to say, Tim, you're -- at one of the prep
sessions, Tim reminded me that I'm probably one of the
dinosaurs of the Internet business, and I can't believe
I'm one of the old guys, you know.
Tim O'Reilly: I know.
It's friggin' weird, isn't it?
Jerry Yang: Well, thank God you're still a little more
senior than me, but...
Tim O'Reilly: Yeah.
Jerry Yang: But I have to say you're one of my heroes and
you've been -- ever since even when we started, we looked to
O'Reilly, and every time we get together you're always on that
next edge, and I'm fascinated and obviously thank you
for, you know, having this conversation.
But I just think it's so fabulous of you trying to
change our government.
But I have to say I always feel like every time I go into D.C.,
I feel like I have to come back west and feels like whatever it
is away from D.C. gets done faster, better, and --
Tim O'Reilly: Yeah.
Well, I think in general one of the things that is true in our
society is that competition really does create innovation,
and governments don't have much competition, and we have to
figure out, you know, how to route around them and how to
actually create some of the services --
Jerry Yang: Yeah.
Tim O'Reilly: -- that, you know, we used to think that
government had to provide.
But I want to kind of --
Jerry Yang: And they probably don't have much fun.
Tim O'Reilly: No.
Jerry Yang: I'm sorry.
I'm sure there are --
Tim O'Reilly: But actually, I will say this: People
in government are incredibly passionate.
By the way, I'm supposed to be interviewing you, Jerry.
Although we agreed beforehand we would just have a
conversation, and Jerry kind of took me seriously on that.
Jerry Yang: I don't know what you're going to ask me so I'm
going to take the offense.
Tim O'Reilly: Yeah.
Well, take the offense here.
I want to start -- because Jerry and I really started
in the same place.
You know, we were running, in some sense, competing
services early on.
Jerry Yang: Right.
Tim O'Reilly: I sold mine to AOL and that was the end of
that, and you went on to build a huge company.
So you clearly know something about taking a company from
innovation to scale that I don't know.
So how did you do that?
I mean, what was the -- you know, how did you go from that
"This is just so cool" stage to, you know, building a
multibillion dollar company?
What was the turning point?
Jerry Yang: Well, I think that's probably the hardest
thing, and certainly I think for any company that has any
scale, it's still the hardest thing is to take great ideas
and put them into the marketplace.
But at least for Yahoo! and certainly in the early days,
the formula was sort of simple.
We just tried to get things out as quickly as possible and
then tried to iterate.
Tim O'Reilly: And that was the whole methodology
about that, the whole lean startup movement --
Tim O'Reilly: -- trying to systematize that.
Jerry Yang: Right.
And I actually think -- and one of the things I do now is, I do
see a lot of startups and I do talk to a lot of entrepreneurs
and they have it so easy now.
Tim O'Reilly: Uh-huh.
Jerry Yang: You know, it's so easy to have that
lean and mean --
Tim O'Reilly: We had so much to invent back then, it was like
"What do you mean, advertising on the Internet?"
Jerry Yang: Exactly.
But I also think, Tim, one of the things that -- and I use
this as sort of my measure of entrepreneurs and innovators
is, you know, David Filo and I started Yahoo!, Larry and
Sergey started Google.
There's a lot of companies that started with a couple people.
Now if you look at startups, especially in the valley and
especially doing -- you know, leveraging all the
infrastructure that's out there, what two people can do
in a unit of time -- six months, nine months, a year --
it blows you away.
Tim O'Reilly: Yeah.
Jerry Yang: Versus what we had to go through, or probably
what Larry and Sergey had to go through.
So I just think the pace of enabling innovation -- and
obviously I totally agree with your notion of fun, but clearly
having fun at the speed of what they can do now, it's -- it's a
lot more fun than 15 years ago.
Tim O'Reilly: Yeah.
So I mean in terms of the technology that you think is
most transformative in termination of the speed of
innovation, do you have any thoughts of...
Jerry Yang: Well, you know, you and I talk about this platform
ecosystem, open and closed, a lot, and I probably learn more
from you than you realize, but I certainly think that the --
what's happening with cloud and what's happening with
infrastructure being completely, you know, on-demand
is -- is revolutionizing not only corporate businesses and
governments and everything else, but what is really making
the impact is, I think, the very small- to medium-size
developers, and that's obviously creating a
whole new set of tools.
And what a lot of them are doing, to your point of, you
know, putting back into the system as much as you're taking
out, or less than you're -- you know, more than -- putting more
back into the system than you're taking out, a lot of
them are putting back tools and infrastructure back into the
system to enable the next ones.
Tim O'Reilly: Right.
Jerry Yang: The pace of applications being written on
cloud now, I think, is quickly growing, whether it's for the
web or for the social web or for mobile devices, but it's
incredible the speed and the level of creativity that's
happening over a bit of a cloud infrastructure.
So I'm probably not saying anything that's new here, but
having witnessed it firsthand, it's truly amazing.
Tim O'Reilly: So one of the things that I've been obsessed
with for years is the idea that on the web you get data at
scale as the next source of lock-in, and, you know,
effectively we're building an Internet operating system where
the subsystems are data.
And, you know, Yahoo! obviously has huge collections of all
kinds of data, but you also have made some efforts to make
sure that the tools for managing large amounts
of data are open.
You've done a lot with open APIs, but you've also, for
example, been a big supporter of Hadoop for, you know,
processing at scale in the cloud.
Can you talk to us a little bit about how you think about that?
Jerry Yang: Well, I think a lot of people say, "Well, how's
cloud different from any previous versions of client
server or, you know, services or whatever?" And I think the
biggest service is that in the cloud, there is a new business
model being developed around leveraging the data and the
analytics that's available and the compute power that's
available in the cloud and using that as a way to
drive new business models.
Whether that's driving targeting, driving intent,
driving commerce, or driving advertising --
Tim O'Reilly: Or driving relevance in mobile.
I mean, when you pull out your mobile phone and, you know, it
knows where you are and you're able to do various local
relevance, you forget that's not happening on your phone.
Jerry Yang: Right.
Tim O'Reilly: You know?
Jerry Yang: Well, and I think that's -- it boils down to sort
of the notion of relevance, and I think, you know, if you look
at Yahoo!, we have to be as relevant as possible to our
users and if we can achieve that, you know, it doesn't
matter -- and the same thing for all the --
I think anybody out there today that's leveraging this cloud,
if you're just using it for compute or storage, then
you're not really leveraging the entire capability.
Tim O'Reilly: Yeah.
Jerry Yang: And before, the cloud was not -- the client
server was not very knowledgeable.
You knew what you had on the client server and that was it.
Now, I think you have this complete paradigm shift in,
okay, how do you have analytic tools, how do you have things
like Hadoop that you can push out computing and allow
optimization to be done at a level that nobody
before couldn't do.
I mean, this is the stuff when I was at school and tried to
learn how to do computer science, machine learning was
this fantasy and now it's, I think, a core part of
business innovation.
Tim O'Reilly: I think that's a really important point.
You know, machine learning is --
Jerry Yang: Right.
Tim O'Reilly: -- the new HTML --
Tim O'Reilly: -- in some ways.
Jerry Yang: Well, and we're not cranking as many Ph.D.s as we
need in our school systems for this stuff, so you have
this shortage in demand and supply, but --
Tim O'Reilly: So that's a good segue.
You know, you're on the board of Alibaba.
You spend a lot of time in China.
Jerry Yang: Right.
Tim O'Reilly: You know, we're always beating ourselves up
about that we're not producing enough Ph.D.s over here.
What's your take on the innovation gap, the education
gap, the sort of science and engineering gap?
Jerry Yang: Well, I'm also on the board of Stanford
University, and where I -- what I see there is the best of the
world still comes to the United States to get educated,
and there we have --
Tim O'Reilly: Then we send them home.
Jerry Yang: Well, there we have an advantage.
And we won't get into politics here, but to me, by and large,
most of them want to stay here.
Tim O'Reilly: What do you think of the startup visa proposal?
Are you for that?
Jerry Yang: Well, I think it's -- well, I don't
know exactly --
Tim O'Reilly: The idea is that --
Jerry Yang: Any idea of generating jobs, we should
keep -- if they're generating jobs --
Tim O'Reilly: John Doerr said give every Ph.D., a green card.
But the startup visa guys are literally saying "We need a
visa that says if somebody comes here with a startup idea
and is able to get it funded, you give them a visa."
Jerry Yang: Yeah.
And, you know, it doesn't matter if they're Canadian
or Paraguayan or whatever.
To me, it's a really fascinating thing.
But to your point, I do think that there is -- I'm an
optimist for America.
I'm an American.
What I do is not possible without being in America.
But I also think that the systems are developing in
different parts of the world, whether it's India or China or
whatever, you know, China being an interesting example.
But I would say that when America's firing on all
cylinders -- and I think our collective challenge as a
society in America is to fire on all cylinders, but if a
we're firing on all cylinders, to use your analogy, we're
really hard to catch.
Tim O'Reilly: Yeah.
Jerry Yang: Because this notion of innovation and
entrepreneurism -- and I'll take Silicon Valley as my sort
of little microcosm -- it's infectious.
The incubator -- you know, Y Combinator is a popular one,
but there's tons of these where now entrepreneurs, innovators
are completely sharing best practices.
And so again, to the point of the two entrepreneurs who've
got a year under the belt, not only do they have
infrastructures and advisors, but their ability to know
mistakes that, you know, people like me made over the years,
it's incredible how fast that knowledge is accruing
and building.
And I would say a typical one-year entrepreneur who has
never done it before -- I mean, Dennis, maybe you can talk
about this when you come up, but, you know, it's clear that
their knowledge -- now whether they can actually have the guts
and courage and everything else it takes to build a business is
a separate thing, but --
Tim O'Reilly: Yeah.
People always see the winners and they forget the losers.
It takes guts to do it because, you know, you have that
opportunity of losing at any point.
Jerry Yang: Right.
But to your point, I'm an optimist around the system
that exists in the U.S.
I do think, you know, this rapid innovation around data
and the cloud, you're seeing, you know, China -- Chinese
companies and Chinese government trying to
build their own cloud.
I -- you know, it's a question of how open they're going to
get it in terms of consumption of that data, but they have a
tremendous amount of talent, they have people who are
passionate, and they can certainly turn around
things pretty quickly.
So it's an interesting place to watch.
Tim O'Reilly: Yeah.
So changing to another topic, you know, Yahoo! grew up as a
business around free ad-supported content
on the net.
Jerry Yang: Right.
Tim O'Reilly: Now, we've seen with, you know, the iPhone, the
iPad, everybody is going "Wow, we're going back
to paid content.
How cool." You know, all the media people.
What do you think about the -- you know, have we really seen
the end of "free," or is it just we're getting more
arrows in the quiver?
Jerry Yang: I certainly think it's that free
is not going away.
I do think -- and especially as you look at the value system
around the content creation, you always are going to have
sort of the top of the pyramid in the premium content, whether
it's the storytelling or the high-production-value stuff,
but the tail is becoming bigger rather than smaller.
Content is getting more fragmented.
And in fact, I think one of the notions of innovation -- you
know, we started with, you know, 15 to 20 years ago where
people who had the knowledge of creating a computer site or a
computer platform had the ability to create content or
create interesting software.
Now that capability of creating interesting content,
interesting software is down not only to the individual, but
any individual with a device, and so -- because so much of
that content is in the cloud.
Tim O'Reilly: Right.
Jerry Yang: So I think all those people who are producing
reasonably good content that might be interesting to
somebody either socially around them or by location or however
you define it, people are willing to give that
away for free.
Tim O'Reilly: Yeah.
Jerry Yang: So it's sort of people like Yahoo!'s job or
other's job to sort of create the relevance of
that content and --
Tim O'Reilly: It's kind of interesting.
This is a little bit of history between us, and it relates
to this paid content thing.
We had the thesis, as a publisher, when we did GNN, the
Global Network Navigator, which was this first web portal, that
selection really mattered.
Tim O'Reilly: Right.
Tim O'Reilly: And Yahoo! listed everything.
Jerry Yang: Yeah.
Tim O'Reilly: And it's pretty clear that you guys won, apart
from the fact that we sold to AOL.
But, you know, it really did matter that people wanted
access to everything and not just the curated set, and
the long tail really was the winning strategy in
more and more of that user-generated content.
Jerry Yang: And I think the long tail is going to its next
phase through social, through crowdsourcing, through all the
-- all the phenomena where the tools of creating this stuff
and leveraging what's in the cloud is actually being passed
to the last individual, rather than to companies or to small
companies that have the know-how.
I mean everybody who has a phone, who have these powerful
computing devices can create content, can generate content,
can socialize around content.
And so --
Tim O'Reilly: And not just content.
They create intelligence.
Jerry Yang: Yes.
Tim O'Reilly: I think that's a really important point.
Because we're all contributing metadata as well as content.
Jerry Yang: That's right.
And that's the key.
Tim O'Reilly: And the service -- the machine learning
actually makes our services smarter, if we're
doing it right.
Jerry Yang: And, you know, we keep thinking that's
got to be the end, right?
But probably not.
Probably something else will come along.
But certainly I think to the point of free or not free,
I think, you know -- and certainly from my perspective,
as long as the amount of free content is getting more, more
pervasive, more local, more interesting, more real-time, I
think free will have a good -- you know, sort of good path.
I do think there is a -- a huge amount of content -- and the
next panel will talk about this, I'm sure -- that does
require a different business model, and I think that paid is
a great -- also a great way.
I mean, if you're a developer and you can develop an app
and get paid for it --
Tim O'Reilly: Yeah.
Jerry Yang: -- that's great.
Tim O'Reilly: I mean, the fact is that the more business
models, the better.
Jerry Yang: Yeah.
Tim O'Reilly: Hey listen, we should probably wrap up.
Because I want to invite up our other guests.
And then we're going continue the conversation after we've
had a brief conversation with them.
So one of the hot areas right now, obviously, is mobile
location-based services.
And I think the guy who's really the poster child for
location-based services, because he's been at it so long
and with so much intensity and infectious enthusiasm and
because he's got the hot company of the moment is Dennis
Crowley, cofounder of Foursquare.
So, Dennis, please join us.
Tim O'Reilly: And the final guest for this panel is the
president and CEO of a company that I think has absolutely
revolutionary potential is at the intersection of more trends
than you can count and is setting out to
change the world.
I'd like you to welcome Steve Cousins, who is the president
and CEO of Willow Garage.
And you'll learn from Steve what he does.
So let's start with you, Dennis How many of you
here use Foursquare?
Oh, wow.
Not enough of you.
Not enough check-ins here.
Dennis Crowley: Working on it.
Tim O'Reilly: So maybe then I should ask you just to tell us
the story of Foursquare, how you happened to come to it,
what you're trying to accomplish.
Dennis Crowley: Do people know what Foursquare is?
That's good.
I used to give these talks, and no one would know.
And it would take me a half an hour to describe
the whole thing.
But the gist of it is we built this platform from mobile
phones that enables people to check in to places and share
the places that you go to and share the places that you
like with your social crowd.
So we've been doing this for a while.
I used to have another startup called Dodgeball.
And I've been experimenting in the space since,
like, 2001 or so.
Initially, it was all about knowing where
your friends were.
I live in New York, and it's all about trying to make New
York more efficient and make, like, cities easier to use.
And, if you have this general awareness of where your friends
are, this imagined map of where they happen to be, it makes it
easier to meet up with them.
That was the general idea behind a lot of this stuff.
But then as we started getting people checking in, you know,
one day at a time or couple times a day or a couple
times a week, you start amassing all this data.
And the data is really interesting.
It's like who is hanging out with what people over time?
And you can start using --
Tim O'Reilly: And where are they hanging out?
Dennis Crowley: People go to this coffee shop, people shop
at these places, people like to go to these places
with their friends or got to these places alone.
You can cut that data up to do really fascinating
things with it.
Tim O'Reilly: Yeah.
So -- actually, I'll come back to a question
for you in a minute.
Let's get Steve introduced.
Steve, tell us a little about what do you at
Willow Garage and why.
Steve Cousins: So we're a robotics company, and we're
about four years old.
And we've, basically, set out to try to bring automation out
of factories where it's been very effective over the last 20
years and out into the real world.
So you can see one of our robots, the PR2, out
here on display.
Eric and Keenan, who designed that robot, are here and doing
a great job of showing off their vision of getting from a
prototype at Stanford to a -- we've got now 11 robots that
we've given away into the world, and we're
starting to sell them.
You say what are these robots good for?
And we're looking at a time frame that's longer than a
typical Internet startup.
In fact, we're not a typical startup at all.
If I go back a little bit, we're set out to do impact.
And we believe that having impact -- and our funders
believe -- that having impact is more important than
return on capital.
Return on capital becomes a second goal.
An impact -- the best way we can think of to have impact,
being software guys, Scott Hassan, who founded the
company, and myself, is either software or automation, in
general, is a huge lever.
So, if you pour money into that and you're doing it in
a good thing, you can cause more impact to happen.
So that was kind of the premise.
And we started off playing in the robotics space a little
bit in autonomous cars.
There's a DARPA Challenge and a DARPA Grand Challenge.
And we played around with his autonomous boat that
was supposed to sail around the world.
And then we discovered Eric and Keenan at Stanford who were
building this prototype of a robot that's like Rosie
from the Jetsons but without the attitude.
It's got two arms; it can move around; prepare your breakfast,
push a vacuum cleaner, help somebody out in
a factory situation.
It's really a way to, again, automate.
And it's a little bit early days for that kind of
robots for a few reasons.
One of the things we liked about their project was that
they had identified a way to make the arms safer.
If you look at industrial robot arm, if you work for Toyota,
there's a red line in the factory or, basically, a cage.
If you go inside the cage without all the safeties
disabled, you're fired, that's the rule.
End of story.
It's just too dangerous.
Toyota doesn't want somebody killed by a
robot inside their plant.
If you're going to have robots going around the home,
you need a completely different situation.
So the robots become designed differently.
But we're not quite ready to put those robots
out in the world.
It's a 10- or 15-year process before they're ready.
So the question is how do you get the technology -- how do
you work on a problem that far out in a startup?
So, if you have the funding, that's a good start.
And then if you have -- if you want to really take off --
and we talked about being a catalyst in the last session.
If you really want to be a catalyst for an industry to get
started -- and that's really what we're going for -- the way
you do that and the way we found to do that is
just go open source.
So we, basically, built a community of all the best
robotics people around the world who are all now working
on a common software platform that came out of this robot
development project.
We've given away 11 of those robots to the best universities
that we can find.
They all have them now.
And we're getting to the point where there can be kind
of a robot app store.
Now, it's on a much, much smaller scale than
the iPhone, right?
There's 11 of them.
We have 10.
So there's 20 in the world. not like iPhones.
[ Laughter ]
But, nevertheless, you know, understand that in robotics the
way things were before we got started was we'd go to a
conference and you'd show somebody a video of what
you made your robot do.
You know, if you go to the conferences, they
only did it once.
All the other times are not on the video.
You don't have outtakes, typically, at the conference.
I show you my video; you show me your video.
And we go, "Oh, my video is cooler" and you can
argue about it, right?
That's not really science.
Science is about repeatability of experiments.
So, if you get to a point where you have a common hardware
platform and software platform and you can say, I packaged up
my application and somebody at University of Pennsylvania was
able to run it, then they can actually do the
experiment over again.
And that is a huge change.
So we've done this sort of open source operating system that
runs on lots of robots plus this robot that has a lot of
capability and put all those things together to really
try to transform the field of robotics.
Tim O'Reilly: All fright.
You might ask we've got the original web entrepreneur.
We've got the guy who's the cutting edge of location-based
services on mobile and a robotics guy, what do these
guys have in common?
What do you see as a common thread?
I see you've got a big vision.
You started before there was anybody else really trying to
make a -- you're not "me too" companies.
Everybody else is "me, too'ing" after you.
And you are, in fact, changing the world.
Dennis Crowley: I love the story you're telling, and
I'm like that's crazy.
That's the position that we've all been in.
We've told the Foursquare story 100 times over
the last two years.
Started off with "This is never going to work.
You guys are crazy" to hey, we get to sit up on these panels
with all these amazing people.
I have a feeling you're probably in the same spot.
You tell the stories over and over again and people think
you're crazy until you manage to prove them wrong.
Tim O'Reilly: Dennis, one of the things you've done a lot
with Foursquare is you've done some pretty clever social
engineering of the friend network that has been built up.
Can you talk a little bit about how you think about
encouraging user behavior?
Dennis Crowley: Yeah.
So it's funny, like, for those of you who have used Foursquare
and heard about it, there's a game component behind it.
It's not a game.
But what we're trying to do is make the tools that we use all
the time, you know, like the social graph and maps and city
guides, those things should be playful.
Going out with your friends and finding restaurants,
those are fun behaviors.
So a lot of our thinking was not just how do you make the
city easier to use from a utility perspective, but how do
you make the tools we use all the time, how do you
make them more fun?
And how do you make your Saturday nights more fun?
That's where a lot of the ideas came from.
Let's turn life into a game.
Let's look at a Saturday night as a leaderboard.
How do I compete with my friends and see who is going
out and doing the most adventurous things.
We found the game mechanics on Foursquare work really great
at motivating people to do more interesting things.
We make these little badges and we reward people with
these little badges--
Tim O'Reilly: Gym rat, for example.
Dennis Crowley: Yeah.
Go to the gym 10 times and get the gym rat badge.
Go hike 10 mountains and you get the great outdoors badge.
Some people get so nutty over the badges and wanting to
collect them all, like Pokemon, that they go
out and do these things.
They'll go to 10 different pizza places or 10
different art galleries.
It's like this idea of using software to change the way that
people experience the real world and encourage people to
do stuff they wouldn't normally do, there's something very
powerful about that.
Tim O'Reilly: That's right.
That idea is spreading.
Michelle Obama has been behind the idea of can we come up with
games to get kids to do more healthy behavior?
A great example, I think, inspired in part by
what you've done.
Dennis Crowley: Yeah, yeah.
Tim O'Reilly: So let me talk a little bit about
crowdsourcing again.
Jerry, we started talking about it.
But I think each of you has an interesting
crowdsourcing story.
In any order.
Steve Cousins: I'll give you an example.
Not exactly crowdsources because, again, it's on a
much, much smaller scale.
But we asked for people to do just a cool video.
So we tried to do things really fast because robotics
typically takes a long time.
It's really hard.
You have to build the hardware.
You have to build the software.
You have to integrate it all together.
It's electronics.
So we asked people just put together a video of the
robot doing something cool.
This is to the 11 places.
You have six weeks.
That's it.
Six weeks.
Some people didn't realize there was a contest until
two days before, and they put it together anyway.
You can do things really fast.
And, when the robot is actually manipulating
the world, it's cool.
So the number one application, the one we judged the
winner, is sock pairing.
So it takes a sock and turns it inside out.
Tim O'Reilly: That assumes you can actually
find the other sock.
Steve Cousins: There's two socks on the table.
Tim O'Reilly: That's cheating, if you give
the robot the socks.
Steve Cousins: One is inside out.
It's, like, fascinating to watch something
work autonomously.
If you see the video on towel folding that Berkeley did.
You know, it's fascinating.
It picks them up.
It did 50 towels in a row.
There's a stack of 50 towels.
Picks them up, shakes it out, folds it up using a table.
Smoothing out.
That smoothing action is really great on the video.
Looks so great, right?
And come up with a stack of towels.
That's amazing.
How can you deal with that when industrial robots are like I
can get to this millimeter position and go to that
position and everything's very precise.
And this is just the opposite.
And the thing -- it's just so much fun to watch.
One of the teams did a playing a band.
So they had a keyboard and a drum over here, and they had
their robot playing songs.
They feed it Beatle music.
And they did this over a weekend at the University
of Pennsylvania.
And they're playing Beatles songs and things.
Just feeding it in, and they're playing the drums.
It's really cool.
Tim O'Reilly: This goes back to the robot app store. what you
have in the app store is behaviors, effectively.
Steve Cousins: The theme is fun.
That's the common theme.
It's fun.
Tim O'Reilly: But in some sense they're being shared.
The robot becomes more capable because somebody is saying I
built a behavior for the robot.
Here it is.
You can have this behavior, too.
So the robots are going to get smarter over time as more and
more people start building behaviors for them.
Steve Cousins: And before anyone says it, and not
take over the world.
Tim O'Reilly: That's right.
Sarah Connor is gunning for you at some point.
Jerry Yang: In our example, at least Yahoo!
Flicker was one of the first versions of crowdsourcing.
We didn't know it then, But I think it was that.
But right now whether it's -- you know, we bought a company
called Associated Content.
And they have people who are contributing content of all
forms on a part-time basis, on the demand basis.
You know, we would put out, you know, a request to have
something written about the 5th anniversary of Katrina.
And we would get back firsthand accounts.
And what I think is happening with crowdsourcing in general,
not only around content but around, you know, sales forces
or anything else, policing or sort of protecting the
communities, there's this notion that, hey, if you can
figure out how to drive some quality, drive some relevance,
whether it's algorithmic or human produced, and try to
create a marketplace where people who are participating in
these crowdsourcing exercises are compensated through the
right licensing or however you do it, it's really powerful.
And, actually, it goes to the notion of innovation to the end
to the individual where we need to give them the tools.
We need to open up the code.
We need to open up the infrastructure to them
to be able to do it.
But I think people inherently want to be productive, want to
have fun, to Dennis's point.
If you can make it into more of a game rather than a
chore, you'll get more productivity out of them.
So these things are all related.
And I love the robotics example.
If I can get a towel folding robot, I will
be a hero at home.
Tim O'Reilly: So innovation, actually, can come
from crowdsourcing.
I think I'd love to have you, Dennis, talk a little bit
about, again, I don't know how far along you are with
developing the Foursquare business model.
But it seems to me like some of your participants in your
ecosystem invented your business model, as
far as I can tell.
Dennis Crowley: We've been crowdsourcing pretty
much everything.
When we would launch city by city, we'd turn on Vancouver
and there would be no bars and restaurants in the system.
Nothing to check into.
And 24 hours later there's 2500 places to check into.
Users create the content for us.
That's amazing.
It happened all over the world.
There's 8 million -- between 6 and 8 million Foursquare venues
now created by people all over the world using the service.
Tim O'Reilly: People adding tips also.
Dennis Crowley: People adding tips.
People adding venues.
Random things.
There's a whole bunch of 9/11 memorials popped up as venues.
But, you know, we really see a lot of innovation coming from
the people who use the products.
It's not just the users, the people checking in.
It's the venues, the people that see the people checking
in to their places.
And so, you know, what's starting to become our business
model, like offering specials to merchants and to local
users, depending on who is the mayor of a place, who's
been there 10 times -- we didn't invent that stuff.
That stuff came from the venues.
Last summer, summer before, we, you know, as Foursquare was
just starting to pick up, we saw coffee shops in San
Francisco hanging flyers around the neighborhood
like: "Come here.
Show us you checked in on Foursquare, and we'll
give you a discount."
We're like, wow, that's kind of a great usage.
We reached out.
We talked to some of the merchants.
We realized a whole bunch of people were doing this, doing
the ad hoc flyer stuff.
And we talked to those folks.
And we ended up building a product around it.
Now we're seeing our mission is to try to bring that product to
millions of businesses across the U.S. And it's the users
that are doing that.
We get these smart ass users that are awesome.
They go into coffee shops and say, "I'm the mayor here.
I've been here 10 times.
What do I get for free?"
And they're like, "I don't know what Foursquare is.
I don't know what it means to be the mayor."
Tim O'Reilly: I bet a bunch of people in the audience don't
know what it means to be the mayor either.
Dennis Crowley: If you're the mayor of a place on Foursquare,
it means you've been there more than anyone else.
So people fight over being mayor of the park or their
office or the coffee sop.
There are these big things, these big mayor battles.
They get written up in papers, people make flyers, and people
go nuts over this stuff.
But this happens all the time.
We hear the story, "I'm the mayor of my pizza place.
What do I get?"
And the pizza place is like, "I have no idea what
you're talking about."
And it happens four or five times, people are saying, "What
is this foursquare thing?"
And it's the users teaching the venues that the venues
should be on Foursquare.
So we're crowdsourcing a sales force, in a sense.
We're in the very early days of figuring out how that works.
But it's worked for everything else we're doing, so why
wouldn't it work for that?
Tim O'Reilly: I think it's really interesting.
Because it really does suggest that, when you have a
technology transition, you end up with new business models
that come out of left field.
You know?
When we started with the web, it was my first idea of web
advertising was influenced by those bingo cards you used to
have in industry publications.
Some of you probably remember those.
It was like, oh, wow we can do Web sites that will be the
destination for what used to be a bingo card.
And you'll be able to have a catalog.
And people will go look at stuff online.
You know?
And then along came all the other forms of advertising.
But it was key word advertising on a search engine that really
sort of ignited this next big phase.
But nobody thought of that in the beginning.
But we're seeing that now as we are starting to
embrace location-based services on mobile.
And there's a lot of sort of thinking about what will the
advertising model look like?
What will the business model look like?
I think we're going to be surprised.
And I think what's happening organically with Foursquare is
a great example of the market teaching us where that
business model might be.
But I'd love any thoughts that you have, Jerry, on that, if
you've been thinking about --
Jerry Yang: I think you're exactly right in that probably
the best business models haven't been figured out yet.
And consumers -- I know A.G.
Lafley talked about that this morning.
But consumers, ultimately, are going to tell us where to go.
Even at Yahoo!, when we force a business model that doesn't
quite work with consumers, it never really works.
And so you have to ultimately trade that balance between do
you monetize early or do you go where the consumer is?
Especially this day and age, being able to really leverage
where the consumer wants to go and make the monetization with
that seamless is really critical.
But in a different way I think people who are getting what
they want are willing to pay a lot more.
So you have this almost bimodal where, if you're happy with
something, you're going to pay a lot more to that place.
And, if you're unhappy, you want to do everything you
can to get away from it.
So I think consumers are becoming a lot more
intelligent as well.
Tim O'Reilly: So another aspect of crowdsourcing
is open source.
Gary, you've been a big open source -- not Gary.
Gary works with you.
Gary Bradski wrote "Open CV," which is this fabulous machine
learning package for computer vision and works on this.
One of the really fascinating things we were talking -- Jerry
and I were talking earlier about machine learning is that
computer vision and a lot of stuff that's happening on the
web actually use the same algorithms.
And that's really worth thinking about.
But sorry, a little aside there.
I just sort of want to ask, you know, how much do you think
open source drives innovation?
Steve Cousins: It's pretty interesting.
Open source -- to me IP is friction.
So friction.
Friction isn't all bad.
I was coming down the mountain this morning, and without
friction it was going to be really bad.
But it's not all good either.
And IP, when you open things up, things change dramatically.
So, for example, we give away the software and completely
open BSD license so anyone can use it for commercial
or noncommercial.
And suddenly, because it's not ours, because it's
a community thing.
And we actually put it on our site instead
Because it's on a dot org site, because it's everybody's, all
these different robotics people are willing to contribute in
a way that they wouldn't be willing to if it was our code.
So, even though it's open source, it's not just
that it's open source.
It's open source, and you can take it and form
a company on it.
We're not the ones that are going to commercialize it and
you're doing slave labor.
That makes a huge difference to people.
And there's definitely a place for companies to take off.
But, you know, one of the companies that has a
PR2 robot now is Bosch.
And Bosch, the reason that we gave them one in our beta
program was because they committed to open source.
And think about a company the size of Bosch, which makes
auto parts and drills and things and all kinds
of different products.
They're a worldwide conglomerate.
A company of that size deciding that they're going to do open
source is really surprising.
It doesn't happen that often.
Intel has done it.
To some extent, they're the ones who originally
supported Open CV.
IBM has talked about it and done it in some ways.
But it's very unusual.
The reason that they do it is because we have a very
clear business model.
Robots could take off in 10 years, and we're going to be
the robots parts makers.
So we can give away software all we want because we're never
going to be a software company.
So let's contribute to this open source software and
become part of the community.
And it really makes a difference.
Tim O'Reilly: Okay.
It goes back to that create more value than you capture?
Steve Cousins: Yeah, exactly.
Tim O'Reilly: Be part of building something.
So if -- I just wanted to open this up to questions
from the audience.
If anybody wants to ask any of us here a question, feel
free to go to the mics.
Lacking that, I'm going to ask you guys, you guys
think about the future.
You've got to.
So when you think about the future, what's going to
surprise us the most over the next few years?
Steve Cousins: For me that's easy.
It's what application will come out of robotics.
People ask me all the time, What are you going to do
with these robots, right?
It is not just folding towels.
You can do lots and lots of stuff.
But what's the really important thing?
And the answer is you can't even think about that
until you have robots.
Once you have robots, then you can go out and build it.
The spreadsheet didn't come out until there were
PCs readily available.
And we don't actually in robotics say "killer
application" because it has a different meaning there.
[ Laughter ]
But what is the equivalent of a spreadsheet for robotics?
Tim O'Reilly: Yeah, yeah.
Jerry Yang: I think with all the opportunity we're talking
about here and obviously all the stuff that's going on in
our world, I do think there is a -- how do I say this without
being negative about it?
I do think that there is going to be more challenges around
how we govern and how do we make sure that -- assuming
this trend continues where everybody, every individual can
be part of a creative or innovative process, I think in
some way that's really good.
I also think that that may mean that other people with the
same tools can do bad.
And I think how do we create a system where this stuff is
sustainable is a really critical question that we
should think upfront.
It's not that robots or location services or Yahoo! by
itself could be part of that, but I do think the more you
empower individuals, the more you do things, the one person,
the one entity could do some damage in a system.
And I'm really struck by this notion of, you know, how do we
-- how do we create impact but for our next generation, you
know -- I was saying to Tim earlier.
I'm sort of living through my kids' eyes, seeing the world
through my kids' eyes and there is nothing in my mind more
special but also more worrisome about seeing the world
through a 6-year-old's eyes.
The question she would ask me really worries me about the
future, whether it is on the energy, environment side,
whether it is on the biology side, whether it is
in the robotic side.
And I think to me doing good is not just giving money away.
It is about solving some of these problems that we have the
technology, and I think we have the brains to do it now.
And it is something I hope we all take away and think about.
Tim O'Reilly: They are giving us the red light.
So I think that means we've got to wrap?
Do you have something quick to add?
Dennis Crowley: Well, yours is really deep.
We always talk about the stuff we are building is, like,
technology that facilitates serendipity or makes
these little chance encounters happen.
And so whether it is a room of people that don't know each
other that have information to share, whether you are walking
down the street in a strange city, like, those are, like,
situations that present problems that could be solved
with some of the stuff that we're doing.
I desperately want the application on my phone that
scans for everyone here and tells me the ten people
I need to talk to before I leave today.
And when I have two hours to kill down in Phoenix before my
flight, I want to go to my social graph and tell me what
are the five things I got to do if I have two hours to kill.
So that's the type of stuff that we are trying to solve.
We are getting to the point where the phones
are smart enough.
The graph is out there.
The geotools and the social tools are there.
It is putting all the pieces together, just making
that stuff happen.
Tim O'Reilly: All right.
Sounds awesome.
Thank you very much.
[ Applause ]
So we've been talking about technology innovation.
And we're now going to switch to innovation in media
and entertainment.
Andy Serwer, who is the managing editor of "Fortune" is
going to bring up Thomas Tull, who is the chairman and CEO of
the Legendary Pictures.
These guys have made some of the most amazing
movies of recent years.
They are going to talk about what's the future
of entertainment.
Please welcome Andy and Tom.
[ Applause ]
ANDY SERWER: I have the glasses.
I'm going to engage in a couple of conversations -- Hollywood
conversations, which is why I'm wearing these glasses.
And, also, Thomas requested that I keep them on so I'm
going to make him happy.
Before I get to you, just sort of generally, I want to sort of
lay the foundation of these two conversations we are going to
have with some of the leading lights of Hollywood,
including Thomas.
And that is that, you know, Hollywood and entertainment
have had a long-standing and dynamic relationship
with technology.
If you think about it, go back to the printing press in
Gutenberg and exhibits in film and TV and radio.
Obviously, things change and, of course, none of the
older technologies go away.
They all get stacked up.
And, of course, what's going on now not only are media and
content people trying to understand how to create
content for the Web, of course, but also how to integrate the
content with the distribution for all of the legacy pieces of
the distribution as well, which is to say print and
film and TV and radio.
So that's sort of the foundation of this
And as Tim said, Thomas Tull is the CEO of Legendary Pictures
which you may not have heard of but I know you have heard of
many, many of his movies which include "Dark Knight,"
"Inception," the "300" and "The Hangover."
Before we begin, I think an extra round of applause for
anyone who anything to do with "The Hangover."
Can you join me please?
[ Applause ]
I mean, holy smoke, right?
Because that was just a fine, fine motion picture.
I don't care how that thing was distributed, I enjoyed the
hell out of that thing.
So thank you very much for bringing that to us.
Now, you know, we are talking about innovation here.
And so we want to kind of bring it back to that
theme a little bit.
One thing that's kind of interesting, I think,
about your story, Thomas, is your story.
And there's so many people in the world and in America who
would like to do what you have done, which is to say, you know
-- here's a kid from upstate New York, from modest
circumstances, Hamilton College.
He goes to Hollywood.
And all of a sudden, you know, you are in the movie business.
And, you know, I guess to me what I would like to
understand is what is the innovation part of that?
Because you had to have done something different from
other people to succeed.
And now you have got, what, a 40-picture deal
with Warner Brothers?
How did that happen?
What's the innovation part?
Thomas Tull: You know, I mean, part of it was -- I was
actually at a dinner party, I think, in 2003 and the
then-vice chairman of MGM was sitting next to me and was
talking about all the problems in the movie business.
And I had both an entertainment as well as a private
equity background.
And, you know, I'm sure started pontificating about how you
could build a new system that was private-equity backed
because they had raised all this money.
And he sort of said to me, "Well, if you are so smart
you should do that."
And so I wrote a plan.
I talked to a couple of the studios and, you know, was very
fortunate to -- Our success starts and ends with
Warner Brothers.
They are a fantastic partner, best studio in the world.
We were able to raise a very large amount of capital and
our first movie was "Batman Begins." Our second movie was
"Superman Returns." The idea really -- I'm embarrassed to
share the stage with Nobel Prize winners and folks that
are truly changing the world.
I'm like the "Batman" guy.
That's great.
Andy Serwer: It is pretty important, too, though.
Thomas Tull: Yeah, well, we wanted to make sure that we
made -- on the financial side, make sure that we
made responsible decisions.
But then on the other side, I make movies I want to see.
And, you know, when that stops working, then I'll
try to do something else.
But very, very fortunate to do something that I love.
Andy Serwer: There's some people who have written that
you guys have a formula, kind of a black box, when you are
looking to make a movie.
Is that true?
Is this sort of just looking at, you know, kind of an
algorithm-based system?
Isn't that what's wrong with Hollywood, all the
formulas and stuff?
Thomas Tull: If you find that black box, I would love for you
to call Patrick and Ari and let them know and we
will get it in.
I haven't seen it.
I mean, again, we are a very director-driven company.
That's a very big thing to us.
You know, the directors have had the privilege of working
with Chris Nolan now three times, Zack Snyder three times,
Bryan Singer, Sam Raimi, Todd Phillips on comedy who did
"The Hangover" for us.
And these guys and these folks that have that vision, our
job is to empower that.
And then, you know, Warner Brothers has their machine
on the marketing and distribution side.
You know, that's -- but there's really no black box.
Because at the end of the day, with all the new innovation and
technology and 3D, we are in the story-telling business.
And if the story is interesting and you can capture the
imagination of the public -- for two hours I can go in to a
darkened room and the lights go down and I get to kind of
escape for a while, you know, that's our job.
Andy Serwer: How do you tell?
I mean, "The Hangover" is just amazing to me.
Again, it is like some guy walked in your office and said,
I got this idea to make a movie about a couple guys who go to
Las Vegas and get hammered.
Now, you know, I mean, that to me sounds like the most
rote, overdone story.
I mean, I couldn't imagine if I was in your position green
lighting something like that because it just sounds like it
has just been done a million times.
Thomas Tull: I would agree.
But if that person is Todd Phillips who made "Old School,"
then it is kind of like, You know what, Todd?
That's pretty cool.
[ Laughter ]
Andy Serwer: There you go.
True that.
What does it mean -- you just said you believe
in strong directors.
What does that mean?
Thomas Tull: You know, well, for us, these folks just
have an incredible vision.
Right off the bat, you know, when the first time read the
"Inception" script and Chris had all the models and
everything laid out and we walked around the room, it was
just clear as day that he had this -- you know, this vision.
And I think the word "genius" gets thrown around way too much
in our business in Hollywood.
He -- I think, he has sincerely earned it.
And I think, you know, the directors that absolutely have
a vision and a plan and the confidence to go out on a limb
like that and execute it, you know, that's our job, again, is
to empower that and to make sure that we're constantly
looking for the next directors.
"300" is a great example.
Zack Snyder, who is an amazing filmmaker, had made one
small horror remake.
And when he pitched me the "300," he just almost stood
up and acted it out.
He was just so passionate about it.
And I think that's one of the keys that I'm not sure you
can -- you just kind of have to feel your way through.
Andy Serwer: Right.
Obviously, we have an I.T. crowd here.
When you are talking about something like "Inception,"
what are all the different I.T. pieces of that, from CGI
production, distribution?
I mean, how are you even thinking about that stuff
these days, Thomas?
Thomas Tull: Well, you surround yourself with a great staff
that has expertise in each of these areas.
And, frankly, making a movie these days, there is so much
technology from sound design, from how the editing is
done to how everything is done, motion capture.
I mean, there is some unbelievably just cutting-edge
pieces that are put together in all of these things.
And with distribution these days, going digital, the
innovation going on with 3D, both on the camera side,
what James Cameron is doing, there's a lot.
So for the I.T. crowd, you know, we want you to forget
about it, at least I do.
If you are sitting around thinking like, "Wow, they
really pulled that shot off," then we haven't done our
job because we want you to be completely immersed.
But it's -- it's really pretty staggering when you start with
a pitch and stack of papers with a script and you sit back
at the premier and say, you know, There it is.
It is really special.
Andy Serwer: Do you still focus primarily on theatrical
distribution, or are you thinking about having your
pictures distributed on the Web?
Thomas Tull: No.
We're focused on all aspects.
And the interesting thing to me about the movie business is if
you go back and look at it, putting movies on television 40
years ago was going to kill the business.
Then HBO.
Well, now you can actually say curse words on TV
and see the whole thing.
That was going to kill the business.
I mean, the tombstone has been written for this business
many, many times.
And it just has this resiliency.
So we're concerned with making sure if we make a great movie
and then go through however you want to view it, you know,
we're concerned with all of it.
But I will say that for me I also think that theatrical is
still very, very important.
I mean, Friday and Saturday nights, it is part of
our cultural fabric.
And I still -- you know, my wife and I still go to
the movies all the time.
I don't think that's going away any time soon either.
Andy Serwer: So you don't see a point in the near future where
you're releasing films online simultaneously or even with
a window after theatrical?
Thomas Tull: There is all kinds of things going on in terms of
looking at the business model and saying, What's the best
way to maximize this?
At the end of the day, especially a comedy or a horror
movie or something like that, seeing -- you know, seeing a
comedy with a crowd is different, it just is, than
sitting in your living room.
I can only speak as a fan.
And the theatrical exhibitor has been very, very good to us.
So we will continue to look at all kinds of business models,
but that one is still important to us.
Andy Serwer: I read somewhere that you said that you don't
like to be associated with movies that "wink"
at the camera.
What does that mean?
Thomas Tull: Again, it's just a personal preference.
We talk about being "all in" on our movies.
If we make a movie about Batman, there is a respect as a
full-blown comic book geek, there is a reason people have
liked Batman for years.
Instead of doing the campy version of the versions
like, all right, look, we know we are in tights.
We know we are making a superhero movie.
It's taking it very seriously bringing a great filmmaker in,
taking the time to have a great script and tell a story and not
have the escape patch that, hey, we are really not
taking this very seriously.
It doesn't mean you don't have light moments and
can't have fun with it.
But these are subjects and properties that we love, and
so we want to treat them with the right respect.
Andy Serwer: We talked a lot about hits you
have had, Thomas.
You have had some movies that bombed, right?
That flopped?
That didn't do well?
Thomas Tull: Right.
We the glasses back on.
Andy Serwer: That weren't critically acclaimed.
[ Laughter ]
What do you learn from the mistakes?
I mean, do they get you down?
Does that just bum you out when something just bombs?
Thomas Tull: You know, one of the things that's important
to us, a lot of people in the movie business don't
care about their brand.
We actually do.
And if you go to the bingo parlor on Friday nights and
wear your Legendary Pictures T-shirt, nobody is going
to say something to you.
If you go to Comic-Con, you will get a different reaction.
So it is our job to make sure that every time that logo goes
up, that we try to do something great and it doesn't
always work that way.
And the take-away, you know, to me is: Did you have a
clear vision going in?
Did you all agree on what the story was going to be?
Any time somebody tells me, "don't worry about the script,
we will fix it on the fly," wrong idea.
And, again, I would keep going back to it, if you stick with
top-tier directors, you know, that has to me more to do with
the outcome than anything else.
So you try to learn from each one.
But, frankly, it is so hard to make a movie, any movie, that I
have a greater appreciation -- you know -- before I was in the
movie business, you would go, you would pay your ten bucks
and you were like, "Wow, that was really awful."
Now, sometimes I'll sit back and I am like, "They got it
made" because it is so difficult.
[ Laughter ]
Andy Serwer: All right.
Looking forward to "Legends of the Guardians," that could
be my favorite coming.
We're halfway there.
Thomas Tull: Not our movie but that's okay.
Andy Serwer: Haven't seen that one?
That's my company.
We're almost out of time here.
I just want to ask you, you know, about your genre which,
I guess, is kind of action, adventure, comic books.
You know, is that really innovation?
I mean, is that really something new under the sun?
Thomas Tull: I think it depends on how you look at it.
You know, we certainly don't want to be in the business of
just retreading things, where you really don't have
anything new to say.
But, you know, to me the reason we're incredibly proud of
something like "Batman" is there has been a number of
movies done but not with Chris' vision.
It is not to say anything bad against the other ones, we
were just really excited about his vision.
I think as long as you have something fresh to say, you
can bring that to the screen, then I don't
know if it's innovative.
But it is a hell of a lot of fun for us.
As long as people keep going and don't throw us out,
we'll keep doing them.
Andy Serwer: Great.
Well, you have been pretty successful so far.
So congratulations to you.
Thomas Tull: Thank you.
Andy Serwer: Thank you, Thomas Tull, please.
[ Applause ]
All right.
Continuing our Hollywood theme here, I would like to bring up
our next two guests and they are Ari Emanuel and Patrick
Whitesell, the co-CEOs of WME Entertainment.
[ Applause ]
Good to see you.
Thanks a lot, guys, for coming and for patiently
waiting in the wings.
You probably know who these guys are.
They run, you know, what's likely the most powerful agency
in Hollywood or the world.
It is an incredibly dynamic place with a client list
that blows me away.
I mean, Patrick --
Patrick Whitesell: You're one of them.
Andy Serwer: That's true.
I should disclose that.
Boy, I forgot about that.
That's a real conflict of interest here, isn't it?
Ariel Emanuel: Depending on the questions.
Andy Serwer: I'm not a very good client, am I?
No, you're good.
Andy Serwer: That's right.
Anyway, can you mention some of your clients, you guys?
Because it is a pretty awesome list.
Ariel Emanuel: It is Larry David, Marty Scorsese, Michael
Moore, Sacha Baron Cohen, Adam Sandler, Matt Damon, Lady Gaga.
You want to keep on going?
Patrick Whitesell: In the movie business we have, I don't know,
probably a good majority of -- good chunk of the movie stars
that you have seen are the people behind the cameras, as
Thomas was talking about.
And in television, I think the majority part of the shows
people watch in this room, I think --
Ariel Emanuel: If they watch TV here.
Patrick Whitesell: -- are "30 Rock," "The Office," and
"Entourage." So, we have a real dominant kind of
television business.
In the touring business, we book about 25,000 tours a year.
It is all types of music from Lady Gaga to country western
music, Braid Paisley, or hip-hop.
So it is a real cutting big cross-section.
Andy Serwer: Right.
You guys merged Endeavor with William Morris
about 15 months ago.
Ari, I want to throw this to you.
Let me just ask you: What was the point of the deal?
What were you trying to do?
And how's it going?
Ariel Emanuel: Well, as you guys have -- in this crowd have
all ruined our lives a little bit, Patrick and I probably
about seven years ago looked at the world and said, There's
going to be -- when we had Endeavor, there's going to be
more distribution than ever.
And that if we believe that content is king when we were
at Endeavor, we had two big pockets.
We had the television business and the movie business.
And the premise was that we needed more content as the
world expanded on the distribution side and that
our leverage inside that conversation would become
greater as the world kept on expanding on the
distribution side.
If you just took television, in '95 when we started endeavor,
there was four networks.
If you look at it now, it's an ungodly amount of television
being consumed and even greater amounts of television
being consumed.
So when we looked at it, we could add a publishing -- an
author business, a theater business, a lecture business
and a music business.
And then as we pushed in on the conversation as relates to
distribution, we would have a different seat at the table.
And then off of that as distribution changes, whether
it be in social media, et cetera, how we used our branded
content and how we had the conversation in the traditional
manner into the expanding kind of world of content and how you
define content gave us more leverage.
So that was the basis for it.
Andy Serwer: So, Patrick, how's it going with the new model?
You hear a lot of people saying that, Oh, you know, the old
Hollywood model, the whole Hollywood agent model is dead.
What does that mean?
And what are you guys doing to get out of that trap?
Patrick Whitesell: Well, first of all, I don't think the old
model, if that's what you call it, is dead.
We are probably doing more television.
Our traditional businesses, we're doing probably more
television work than we have ever done.
The movie business is, as Tom mentioned, is not going away.
There's 1.3 billion tickets sold ten years ago.
There will probably be 1.3 billion sold in ten more years.
So the film and television business -- And music actually,
the byproduct of the changes there, acts have to tour more.
Our core business and what we have done for a long time
hasn't changed a lot.
I think where you are seeing the biggest change is
the type of people we represent has expanded.
The people that are going to come up here -- the people that
are clients of ours.
You know, the idea that you can take a company like Hasbro that
is a toy manufacturer and they can become intellectual
property and creators of movies and also own a television
channel or cable channel, that can happen, right?
And I think as you will see the next phase, which Ari is
talking to, is as the economics start making people that we
represent incentivized to do branded content for the Web,
you will see that content get really good.
So as you start seeing the marriage of our people with
people like Demand Media and Richard or Anthony Borges and
Grab and social gaming and you start seeing the people we
represent starting to play in those areas, then you will see
the content and how -- and the spike of the quality
of content go up.
So what Ari and I are trying to do with the company is to
position ourselves and our clients for those
And I think that is a kind of new model.
Ariel Emanuel: I mean, one of the things we have to do kind
of going into the future -- and I think for everybody, it's a
requirement -- is the definition of "content." What I
defined it as 20 years ago, 15 years ago, has
completely shifted.
So that what Patrick says, you know, what Demand Media is
doing or anybody else is doing as it relates to content,
that is a form of content.
What we're doing with LinkedIn and a bunch of our authors --
right? -- and what we've talked to you about, that is
a form of content.
The important thing for people on our side of the business is,
one, we have to stay curious and we have to kind of keep on
changing as the needs for content and the different forms
of content start to change, and then utilize what we believe
are people that actually know how to tell stories and know
how to express themselves that other people are interested in
and find distribution for them.
That will be our task into the future.
I don't know if you can write an algorithm for that, but I do
think there's a place for it, and, you know, the big question
and the push/pull in this environment is how people
remain -- enable people on our side of the ledger to get paid
while permitting an open source to everything.
And I think it's incumbent on the two kind of areas of
California to get to that conversation so that there can
be expansion in their -- in their business model but it
can't erode our business model, and I think that's a very big
issue that we're getting to, we're -- you know,
everybody's discussing.
I don't think the answer is there yet, though.
Andrew Serwer: Yeah.
It sounds like -- I don't know if I'd hear Ari Gold
talk about this, right?
I don't think he's quite up to this.
Ariel Emanuel: Well, I mean, as somebody said, you know,
there's a lot of four-syllable words here and there hasn't
been any four-letter words here?
There will be on this panel.
Andrew Serwer: Right.
We'll separate the television personality from --
You know, it's interesting because when you talk about the
two Californias, you know, I've seen that a lot and that's also
sort of the New York versus San Francisco and L.A. versus San
Francisco content versus distribution and technology.
Hollywood has -- what I was talking about in the beginning
-- I think has always followed, you know -- you know, we talked
about the film, TV, and radio, but, you know, you're seeing,
you know, the Ashton Kutcher people laughed.
It's for real.
You know, what he does.
I think Will Farrell.
You saw what Matt Damon and Ben Affleck have been trying to do,
and now what you guys are trying to do.
Is there a new feeling in Hollywood that you guys aren't
just sitting there and waiting for stuff to hit you, that you
guys are getting to be more proactive with technology?
Do you think, Patrick?
Patrick Whitesell: Well, I think the one thing that most
of our clients are talking about and what we spend a lot
of time talking about the answer to is, you know, they
drive a lot of this activity on Twitter or on Facebook, and
mostly it's disruptive to their lives.
There's a few people who embrace it, you know, and
relish it, but a lot of people -- and with "Us Weekly" or
whatever it is, most of it is invasive, but it drives all
these economics for other people, not themselves.
And so we spend a lot of time -- we know what their
value is to consumers.
We know what they are to the advertisers.
So we're -- the next step for us is, okay, how can they
economically benefit from those things that are out
there and are happening.
And I think that's probably the biggest thing that
comes up for us right now.
And then secondly, how do you take all of that information
and activity and drive it back to their movies and
to their properties.
And those two things, and our ability to kind of -- you know,
kind of figure that out with the advertisers, I think
is going to be a real big business for us.
Andrew Serwer: Right.
Do you guys like to talk to people like Dennis, you know,
at Foursquare and, you know, how can you bring entertainment
ideas to Foursquare?
I mean, that must be a really cool brainstorming conversation
when you're talking about --
Ariel Emanuel: Well, we just had a pretty big and a
continuous conversation with LinkedIn.
We're doing it with other people, as Patrick pointed out.
So from our perspective, you know, there's some content --
you know, there was that big article today in the "New York
Times" and I think in "Wired" this week about, you know, is
it an apt world or, you know -- we're constantly in
this conversation.
There are some clients that need to be in that
conversation, and then there are some clients that just
-- Larry David could give a ____, right?
He's making "Curb," that's what he's doing, and it
doesn't matter to him.
There's other people like the Lady Gagas and other clients
that that is an important conversation that they
want to explore.
From our perspective, as Patrick said, we think we have
clients that move product and move economics, and how we
monetize their relationship with the consumer through
distribution is going to be where we think there's going to
be innovation for a bunch of our clients and where there's a
monetization formula for a bunch of clients -- a bunch of
distribution that might not have economics underneath them
that kind of work right now.
Andrew Serwer: You and I were talking about that story you
mentioned in the "New York Times" today.
I think it was an excerpt from -- a book, I believe, that Nick
Bilton is -- the two-four-ten?
Did you all see that?
About how content will be consumed from two feet,
four feet, and --
Ariel Emanuel: Search it on Google.
Andrew Serwer: Right.
And -- yes.
Nicely played.
And that, you know, your mobile is your two feet, your computer
screen is four feet, and your TV is ten feet.
And of course, you know, they're not going to all drive
each other out of existence and you have to play across
all the platforms.
Ariel Emanuel: Right.
I think it was a pretty good article.
Andrew Serwer: What about, you know -- about live, live
events on the Internet?
I mean, are you guys -- is that ever going to happen, and -- or
having on-demand on the Internet or live events
on the Internet?
We were talking about that as Patrick.
That seems to be kind of far off.
Is that something, you know, you consider at all?
Patrick Whitesell: I think that is far off.
You know, I don't think that's an immediate -- like I don't
think the economics around that are immediate.
I think what you are seeing, just as an example I just came
from the Toronto Film Festival, and, you know, up there what's
been dying is the independent movies that have had a hard
time getting out there and being seen.
Because in the old model, with all the windows taking so long,
the marketing dollars, and to try to find an audience, is
getting harder and harder.
And actually cable television has really hurt it, because a
lot of great dramas are on television, so people -- it's
eroded the movie-going audience.
But what you're seeing now is that the VOD model for
independent film is a great thing, because what's happened
is it allows the economics of guaranteeing someone
distribution and advancing them some money against a theatrical
distribution as long as there's a quick window into the VOD.
It allows more people to see it, everybody to make more
money, and therefore, you're seeing, consequently, in
Toronto we just sold two movies that probably wouldn't -- well,
they may have been sold but they certainly wouldn't
have been sold at what they got sold for.
So I think in some ways you're going to see, you know, kind
of this -- you know, the collapsing of windows, and in
the big movies, it's going to be longer and it shouldn't be.
But I think a lot of the more niche film, I think it's going
to be a good thing and you're starting to see that, and I
think that's -- I think that's going to be the most
fascinating to me when I look at the four studios, four
primary studios of Newscorp and Disney and now Comcast
and -- who did I miss?
Ariel Emanuel: Warner.
Patrick Whitesell: Warner.
Of course.
But they all have slightly different kind of agendas, but
I think that you're going to see them all kind of play
around with this windowing, and I think that will
be a good thing.
Andrew Serwer: Talking about products, we have to talk
about product placement and that's kind of a, you know,
big topic these days.
You know, I was looking at "Wall Street: Money Never
Sleeps," the second iteration of "Wall Street," and I think
they're in a bar and, what's it, Gekko asks him, "Would you
like a Heineken," you know, and Shia says "Yes," and it's just,
you know, pretty blatant.
I mean, are you guys doing more and more of those
kind of conversations --
Ariel Emanuel: Television -- in fact, on television it
is happening more and more.
So we're having conversations with the WPPs.
I mean, our business -- in our business model, we have a whole
marketing/advertising business that, as we see the business,
that coupled with marketing is going to be a very
important relationship.
How we handle the big advertising agencies I think is
-- you know, they built a distribution model that they
have to execute, but we're having more and more
conversations with advertisers every day, whether it be the
P&Gs, the GMs of the world.
Almost on a daily basis now you're having
those conversations.
You know, in the television business, in cable, in 2007
there was 30 scripted shows.
Now there's 130, right?
So it's not like it's -- that window is closing.
It's expanding.
There's more television being watched.
The economics behind it are -- on the network side are
stressed a little bit, but only -- and, you know, during the
recession, the -- you know, the ad rates were down, even
though CPMs were going up.
So I think the advertisers are going to be the bigger players
in this conversation and they're pushing in on the
relationship with the distribution model in
the core business.
So yes.
Andrew Serwer: Are you guys surprised that there isn't
actually more interactivity between television and the web?
Because, you know, I remember talking to Ben Affleck
and Matt Damon.
They had this show call showed "The Runner" that they pitched.
Patrick Whitesell: A Foursquare show.
Ariel Emanuel: Great show for Foursquare.
Andrew Serwer: Yeah.
That was Foursquare before there was Foursquare.
There was a guy set loose in a --
Ariel Emanuel: Rights are available.
Talk to me about it.
Andrew Serwer: And I don't know if you heard about this --
Ariel Emanuel: We'll just charge you 50, okay?
Andrew Serwer: That's good for him.
And they turn this guy loose in America and
you had to find him.
And the show would run once a week, I guess -- I'm kind of
getting this maybe not so right -- and then -- but then you
could keep following the show online and he would appear in
a doughnut shop in Paducah and then people would go.
And I believe that ABC said they would do it
but their lawyers --
Ariel Emanuel: After 9/11, it got cancelled.
Andrew Serwer: -- nixed it because -- right.
Because -- so there were security concerns or people --
people were also scared they were going to shoot the guy
when they found him to get a prize, and it sort of had
some problems, but --
-- anyway, you could see the potential to do these things.
And I think "Lost," you know, has done some of this stuff
where, you know, you could crowdsource plot changes.
I'm just surprised that there's not more of that going on.
Is that something you guys think about?
Patrick Whitesell: I don't think -- I think now is
actually -- I think you can for the first time to really
have the conversation.
I think "The Runner" was a little bit ahead of its time.
It was a great idea but I don't think you could actually
execute it the way you could now.
But I think you will see more of that and I think you're
going to see it in social gaming particularly.
You know, I think that's an area where whether it's woven
into the narrative of a television show or if it's just
your celebrities driving traffic to that and
participating and coming in and out of the game with you, I
think that's going to be an exciting place, too.
Andrew Serwer: Yeah.
Does anyone have any questions?
I've got a bunch more to ask these guys, but if anyone
wants to, just maybe pop up to the mic.
There, we've got -- we have a brave soul making his way over.
You go.
A lot of news about "The LeBron Show" that you guys packaged.
Maybe you want to talk to us a little bit about that and
implications going forward.
Ariel Emanuel: I have no implications going forward.
I mean, you know, it came out of sitting at the
game with his manager.
And I think they're probably going to win down in Miami.
How about that?
That's a prediction for you.
Andrew Serwer: What the hell was that?
Very good.
Ariel Emanuel: I mean, you know, I sold the show.
Andrew Serwer: That's good.
All right.
Talk it up a little bit.
Patrick Whitesell: Advertisers are happy.
Ariel Emanuel: Advertisers are very happy.
Andrew Serwer: Let me ask you about another thing that you
may be involved with a little bit that might be --
Andrew Serwer: ESPN is happy too.
Andrew Serwer: -- just as interesting or maybe even more
interesting to this audience which is "The Social Network,"
the movie about Facebook, and I believe Mr. Sorkin is a client
of yours, so can you talk a little bit more about that?
Ariel Emanuel: Um...
Andrew Serwer: Because that seems kind of --
Ariel Emanuel: It opens at the New York Film
Festival on the 23rd.
I think the movie is -- I'm hoping the studio doesn't do
any advertising because I think it's just going
to work on its own.
And I think probably the people at Facebook
are a little nervous.
Ariel Emanuel: How about that?
Andrew Serwer: That was good.
What's that?
(Speaker is off microphone).
Ariel Emanuel: I don't think so.
I think the movie is -- listen, I'm a character on a show.
It's been pretty good for me.
I think it's going to be pretty good for them.
Ariel Emanuel: Huh?
Yeah, you want me here.
Andrew Serwer: That's the Ari we know.
Now we got Ari going.
All right.
How do you put up with this, Patrick?
Ariel Emanuel: It's hard for him.
Patrick Whitesell: 12 years.
Ariel Emanuel: 12 years.
Andrew Serwer: That's good.
Nicely done.
So I wanted to ask you -- I was talking to you about
this earlier, about --
Any more questions, please feel free to just pop up.
Ariel Emanuel: I dare you.
No, go on.
Andrew Serwer: I don't know, it was pretty brutal.
You got no one after that.
It was, like, quiet.
The global nature of what you do, are you surprised that the
-- is the movie business or the entertainment business more or
less global than you would have thought, say, 10 years prior?
If you -- if I had asked you in 2000 or nineteen ninety- --
Patrick Whitesell: Oh, it's definitely, definitely more.
It's only -- but I don't think 10 years ago you saw it coming.
You know, the international marketplace in the film
business is bigger than the domestic, so that's
not a surprise.
I think what you're now seeing, though, is actually studio --
there's film finance companies all over the world that now we
actually cover like we do Warner Brothers or Universal,
and we go to them to kind of make -- and that never
would have happened, one.
Also, two is, it used to be that you would always take your
best content or your best ideas always to the studios first,
and now you still obviously will do that a lot of times,
but weirdly enough as -- if you want to bifurcate rights and
hold back more of the control, when you're really hot, you
actually want to take it to the studio last, which we talk to
Thomas about a lot, where you would maybe partner with
someone and then go to them at the very end just for
domestic distribution.
So that part of it has changed and the -- and there's a lot of
-- you know, more people wanting to get into
the movie business.
I think it's smarter money, though, and it used to be a lot
of people would get into the film business, particularly
just for vanity reasons, and now people, you know, more and
more are serious about making money and making -- building
a proper business model.
And so yeah, I'd say it's definitely --
Ariel Emanuel: Internationally also, like in France, they're
making English movies but they're paying for them
just for their market.
It's -- it's great right now.
Andrew Serwer: Some of those French banks have had some bank
experiences in Hollywood, if we can think back a bit.
Ariel Emanuel: Yes, they have.
Andrew Serwer: Yeah.
Let me just follow up a little bit and talk about the two --
two of the biggest markets in the world which are equally --
you know, they're interesting but both problematic for
different reasons, which are India and China.
Do you guys do a lot of business in China?
Is it -- I mean you -- it's such a difficult place to
do IP work, though, right?
I mean, I know our company, Time Warner, has a
very difficult time conducting business.
You know, our films just get pirated right away and we just
kind of say, "You know what?
We're just not going there."
What do you guys think?
Ariel Emanuel: Well, there's some -- in India, a lot of the
animation -- also in China -- kind of coming out of their
innovation and production houses, a lot of the studios
have moved -- Sony, Fox -- on the television side there and
making some local movies.
I think there's probably some constraints on the economics as
it relates to getting money out of China, but they're all
trying to figure that out.
Andrew Serwer: Can you do stuff in India?
I mean, we hear about Bollywood but as far as I can tell
there's like Bollywood and Hollywood.
You know, one or two huge movies being exceptions, but
is there anything -- is there any connectivity there?
Not so much?
Patrick Whitesell: Not so much really.
You know, there was a big announcement about all
these deals they made with talent a few years back.
Andrew Serwer: Right.
Patrick Whitesell: They made kind of production deals.
But in Hollywood, there are what are called second-look
deals, so what happens is if you're a producer in Hollywood
and you have a deal with a studio, you make what's called
a first-look deal or an exclusive deal, but normally a
first-look deal, where they'll pay you some overhead and your
only obligation is you got to bring them all your ideas there
first, and then if they don't want them, they pass on
them, you can take them to everyone else in town.
They made -- most of those deals were second-look deals.
So a second-look deal doesn't really have a lot of teeth in
it because usually if something is really great, it's usually
been sold the first time, and if your only obligation is to
take them to a second time --
So it was a big announcement but I don't think a lot of
movies have come out of it yet because it
doesn't, you know --
Ariel Emanuel: How many people in Silicon Valley would
do second-look deals?
Not a lot, so...
Andrew Serwer: Interesting.
Good point.
Why is it that people -- and we got to wrap things
up here in a minute.
Why is it that people are always saying, you know, "The
Hollywood studios are dead," "Oh, you know, they're
dinosaurs," and yet, you know, they keep -- they
keep lingering on.
I mean, they seem more powerful than ever.
You know, we always hear about independent -- the wave of
independent studios, and those actually are the ones that
ended up, I think, kind of getting killed over the
past 10 years, right?
I mean, how does that whole --
Patrick Whitesell: Well, I think the studios are not
-- I mean, the film side, they certainly aren't
dead, by any means.
I think that the biggest challenge they've had is the
variety of types -- the variety of movies they can make
has been challenged.
I think if you're Warner Brothers, you know -- and Tom
works for them, but they are -- you know, they were making two
Temple movies a year, now they make eight, I think, right?
And that's where they make the lion's share of their money.
Or if you're Disney, you want a movie that kind of you can --
you can monetize throughout all your platforms, the theme
parks, the merchandising, ESPN, whatever it is.
So that constraint causes a lot bit of a challenge for them
because everybody has this idea that people who work at
studios don't want to make creative, original movies.
They do.
It's just the economics get so expensive that it puts
them in somewhat of a box.
Ariel Emanuel: I mean, you're sitting there -- you know,
everybody thinks a movie is the movie business.
The movie business is the DVD business.
You know, with Netflix and their economics and then the
economic downturn and what happened at Walmarts of
the world, the economic underpinnings of the business
kind of started to implode, so that's why they reduced.
I do think, though, technology is going to -- and as Patrick
said, on the independent side, those two elements and how you
deal with the Netflix issue as it relates to DVDs -- when
Warner Brothers held back "26 Days," you saw the
DVD numbers spike.
So when you look at the movie business, the movie
business is a DVD business.
It's not -- I mean, theatrical drives it, but it really is the
economics behind the business is there, and that is
challenged right now.
Until those things kind of -- VOD, Blu-ray, all those things
start coming back in the economy, I think they're still
going to be challenged for a while.
Andrew Serwer: And it's interesting.
You know, we hadn't talked about Netflix, an amazingly
successful and adaptive company, right?
I mean, so how are they being so successful right now if
that business is so weak?
Ariel Emanuel: Well, because it's a subscription
business --
Andrew Serwer: Right.
Ariel Emanuel: -- right?
And then they're building out other models on the VOD side
and on the pay side, so...
Patrick Whitesell: And the business isn't weak.
Here's the thing, is that what happened was when a studio
would make a movie and they'd underwrite their costs, they
would budget in what they thought it would
do on a DVD sale.
And so when you -- when you have a movie, you would
much rather have someone buy it than rent it.
At least currently, in the current model.
Netflix doesn't care about that.
They're not underwriting the model, so they're just in the
rental business, and what they did was they got aggressive
about online and taking kind of their mail system online
in some kind of -- moved there faster.
They've just done a great job of that.
But I think, you know, you may read somewhere Netflix has
a ton of rental sales.
That may or may not be great news to the studio.
Andrew Serwer: Right.
And it's interesting.
We were talking about, you know, TV and the Internet and I
was saying, you know, we're still a long way from
being able to watch live TV on the Internet.
There are people in this room I know who are going to disagree
with me but for the average consumer especially with
sports, they're sitting there at home without a TV, it's hard
to watch an NFL game or an NCAA college football game still on
TV, so there's still a ways to go with that.
Just last question, Ariel, just about a TV question.
So do you see TV -- people who make independent television
production companies, are they thinking about making shows for
the web the same way they are about making shows
for television?
Ariel Emanuel: Well, there's no independent scripted business.
The really independent business is in the reality side and I
think it will be the kind of driver that you have multiple
plays on it -- right? -- where a story line is -- can end up
on the web and come back to the reality show.
So I think that's where it will start and that's
where it will happen.
Eventually, there will be a -- a scripted show that really
kind of incorporates all the elements of what's great about
-- about the web or apps or games or whatever, and the
normal scripted story line.
Andrew Serwer: Right.
I mean, you see people trying it like there are --
Ariel Emanuel: I think it's going to, but I think
it's first going to start on reality.
Andrew Serwer: Right.
We're going to have to leave it at that.
Please join me in thanking Patrick Whitesell
and Ari Emanuel.