Episode 8: David Collet- Media’s new frontier: EpicGames,Netflix, Snapchat in Asia
About David Collect:
My next guest on The One Percent Project is David Collet. He has been a sales executive in the sports and media industry for more than 20 years and worked with CNN, PERFORM, OPTA Sports across Asia and Europe.
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In this conversation, he talks about:
The media of the 21st century.
The next frontier in the media industry.
Evolution of gaming: Epic Games, Fortnite.
Netflix and its challengers.
eSports and its future in Asia.
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Transcript:
*The transcripts are not 100% accurate.
David: It's a very good question because I think the frontier of media has changed and the answer is never just straightforward. My definition of media is any environment that enables someone to engage. Engage meaning, consume or create, with an audience around stories that are supported by shared common values. In short, any opportunity to celebrate culture. And I would say the next big media is gaming, by far, for me, the most exciting.
Pritish: Media consumption and the media industry has been disrupted by the penetration of internet mobile phones. Do you see that there is any innovation left in the media space yet to come or we just observing adoption? Of the various innovative ideas and concepts
David: Somehow the definition of what I think media is or I recognize as media, let’s say, I think the stage we've been through recently and that we are still witnessing is what I call portability. In the sense that the moment we move to the mobile phone and we can take access to media with us, whatever media is; a newspaper, a video signal, a sound and radio, podcast, or whatever. The moment we took it with us, we extended the opportunity of engaging with different forms of media. And now since we have our phone with us, we are finishing to reach a sort of climax. There won't be more than 24 hours in a day and we are already able to over-consume media every second of the day if we want.
So, having reached that climax of portability, the sense that media can now be with us, and we can take it everywhere; the next frontier, and that loops back to gaming is not the interface, but the environment. It’s not the interface, but it's the environment and the ability to dive into the environment. It's like if you were watching... And that's why gaming actually makes it relevant from a comparison analogy is like if you're watching 2D or 3D, and then you go 4D. Because you can feel and smell and there's haptic or whatever. So, the next frontier of media is the one that gives you a new dimension with a fulfilled time as a dimension. Now we need to go into the experience, immersive, and how you leave whatever experience you have around media. Whether it's sound, voice, story, and that's, again, coming back to one of my observation, why I think gaming is amazing.
Pritish: who would you consider to be an innovative media company?
David: Epic Games because they're doing concerts. They've done a few. I saw in the news that they are now broadcasting movies. I think this week or next weekend or soon, there's going to be two or three movie classic that you are going to be able to watch within the Fortnite environment. So, I mean, the possibility is like if you yeah, I mean looking at the smartphone instead of sort of a very flat, and you can take your TV with you and potability meant, you could take your TV everywhere you go and continue the media experience, whether you want to listen, to watch, to read. And now you can get into the TV, and suddenly it’s the famous sort of metaverse, multi-verse, you have friends around that here, not here but they hear in that dimension I think is what's next, and I found-- I think these guys are the next big media company because of what they can bring in that environment. And it goes back to my definition, media is an environment, whether it's a flat or 3D environment. So, I'm excited about that really.
Pritish: Do you see them challenging Netflix?
David: Really, I think the founder of Netflix has very famously said, I think last year on a call with the shareholders and announcing the results. And he said, “We're not competing with HBO. We're competing with Fortnite.” So, there you go. You already have your answer and he knows it already. He said, first we're competing against sleep. And that brings it back to my portability element. It's available 24/7 anytime, anywhere I can watch Netflix. But then if somebody offers me an environment, an experience, that is stronger than the one I get with Netflix because I'm the co-creator and not just a passive consumer, we've reached a climax. Of passive consumption, now it's about co-creation and experience. And it's gonna be hard for Netflix to compete.
Pritish: Snapchat coming to Asia. Do you think they are late to the game, given TikTok’s prominence?
David: Technically speaking from a timeline perspective, they are late because TikTok has already made the move in the US, both musically and built their growth in North America from musically. So, Snap coming here, yes, it's a bit late for the game from a time standpoint. But from an experience and again, I come back to my definition that environment within which you get people that share experience and stories around things they believe in. I think Snap is really trying to layer to the content with AR and VR. It's not really something that TikTok is doing, per se.
TikTok is still very music-driven, and maybe shorter form content, and maybe appeal to a different aspect of how I share a common value and then send a message on the platform. So, from that niche, I don't think there is a company yet in Asia that has positioned itself as a AR and reach video experience that is widely adopted. So, maybe there is a regional niche for them to capture and to bring an element of conversation. Whoever you are as a media, your next challenge is to build a global niche. That's my personal belief. And usually, when I talk with friends and I see company coming here or I think about company going to the West and East and trying to cross the world and expand, the commonality that I see with the champions, they’re global niche champion. Pick a niche, pick a span of attention that you can own within 24 hours, 10 minutes, six minutes, 20 minutes, half an hour per day, and become a champion of that niche globally.
Pritish: I always say that Starbucks, as a company should get into co-working space, or they should take over a company like WeWork. Because the world's biggest co-working space where you get a coffee and potentially see a lot of hustlers working out of is Starbucks, right. So, for me, the best entrance into the co-working space would be Starbucks. For you, who do you think should enter the media space? Who is your-- Or which is your dream company?
David: Wow. That is a difficult question, and I'm not sure I will be able to come up with an answer. Interestingly, the founder of Starbucks, I think, said that they see themself as a training company. And I was very surprised about that comment. And I like that because sometimes there’s different ideas behind a business than what we can see as a consumer or what we can think of when we don't pause and have a conversation with someone like we're doing now during an interesting broadcast. And indeed, they position themselves between-- They wanted to position themselves, Starbucks between your home and your place of work as somewhere you stop by. But I think they become more in doing so because they created a space, and I think they're now a combination of both. The group that owns Starbucks and owns the rest of the food and beverage venue, their unit economics is a training business. Train people to be able to handle other people that comes by on their journey between home to work, between work and work, and go to work and have lunch and then they come back or between.
So, it's basically a customer experience management company. And across multiple food and beverage and drink venue, that's the unit economic that I found that insightful to think about it from their perspective. And I think that's basically true still today for Starbuck. But the venue element and the fact that all the majority of the drink that is consumed is taken away, the people who stay, stay for different reasons, They stay to either have time for themselves or to collaborate. So, I would echo with what you said that they, in putting venue in strategic location in cities or whether they decide to do it. They responded to another need that I don't think they necessarily intended to. And yes, I agree with you. They foster collaboration and creativity. And the best way to do that is around the coffee because it's a moment. It's not just a drink. It's an opportunity to share something and that's when usually you are more creative, expressive. So, I definitely--
So, if you transpose that type of thinking about, which company have those inherent element in whatever ecosystem of infrastructure, they have or they own. In Starbuck, it's a network of venues, and it's a cafe that is the coffee, and around which people usually interact. Then how can you leverage those strengths from your infrastructure to then become something, a collaboration, a co-working space? So, if I take those elements from your question and that's why I kind of elaborated on them to help me also, and I think about the media, then again I will go back to a big game and Fortnite. I mean obviously, they didn't wait for me to do it. But any gaming company has created an environment within which, as long as they have their computing power. And interestingly, the next thing that Epic is doing and investing a lot on is the Unreal Engine, the power of the game that is now us in the cinema space.
So, if you're a fan of movies or TV series and you watch The Mandalorian which is the new, original Star Wars-inspired series by Disney Plus, about the character of the Star Wars universe I mean the Orient. They don't use green background to shoot. They use [??? 15:08] in the background that gives you an amazing rendering of a complete real-life like it’s not even video games. It’s real-life type of universe and they keep releasing new capabilities, new ability for people to use that engine, to use that to create a universe. And that's the genius is a bit like Starbuck with their coffee and their venue and they could sort of make that to [??? 15:57] the group of co-working. He's already doing that. He's already strengthening the co-creation and production capability with the engine. And then, starting with one universe which is Fortnite, but tomorrow when you learn those, you will have more storytelling capabilities. You will have stadiums, you will have people, you would have movies that people are a part of. And that's really what excites me.
Pritish: Coming to eSports as an industry is a multi-billion dollar industry. And 49% of the revenue actually comes from Asia. So, how do you make sense of this new-age industry, and where is it heading?
David: So, I am not an expert in eSports per se. It's not my background. I'm not a heavy gamer. So, I would not pretend to claim any high level of expertise. But three, four years ago, I really started to look into it. Because again, I saw some change and I saw some signal noise coming from that universe. And I found it very attractive and very interesting from a potential to where it could go. And I kind of build up some understanding about it, but not from an endemic perspective. I didn't grow with eSports, I am not an active player. But I've spent a lot of time engaging and talking to a lot of people to try and to understand that. I did though engage with part of the eSports that-- the part of the gaming that is now powering eSports which is some LAN connected video game in the office. So, when I was younger, one of my first company, we were staying after work, office and playing Counter-Strike, connecting to different computers and doing session or World of Warcraft and all of that. So, I was already amazed and that was probably 10 years ago.
So, this is a way of acknowledging that it is not new. It's new for the mainstream population, but it's not new, and it's time to build up. And someone showed that I even connected with it personally 10 years ago, forgot about it, and then three years realized it had become a thing. And I remember saying to one of my colleagues who was [??? 18:56], are you telling me that there are people that are watching other people on [??? 19:04] doing their session? Like, are you kidding me? Are you really doing this? I don't get it. Like, what's the point? And he was so into [??? 19:12], but you don't understand like doing this - or behind the wall, like this and that, it's so amazing. And I’m like, okay, wow. And it already opened my mind and maybe to a degree, I was already receptive to they’re the mainstream part. But that's a personal sharing. For what it is today, and basketball in China and eSports, you’re taking a very good palette. NBA started 20 years ago, if not more, going into China. And at first, their content was for free. So, they invested in China, they didn't-- like it was not an overnight success.
You always had an entrepreneur that goes through hell and sweat for 10 years, fail at all the company. And then one day find the idea that turns to an overnight success that people forget that he as an entrepreneur has built that success in the last 10 years. And that's exactly what basketball went through before it becomes so mainstream and the number one sports in China. And similarly, and that's why we're taking those components. And similarly, that's why eSports is there now is that it grew with the gaming industry and the cyber gaming industry. It exploded with the penetration of PC, and video games. And now it's moving into its final acceleration phase because of mobile. And the next frontier of eSports that is still to be written to be fully understood in the way it explode is eSports on mobile. In Southeast Asia, for example, it’s predominantly driven because it's the main equipment that people have to buy and consume a video game. And that's why it's fascinating.
The future is very hard to predict. I'm not going to dive into it because it's a complex universe. It looks like sport on some aspects, but then the foundation because it's driven by publishers and not by activities that you and I can practice and do. I was listening to a podcast recently where someone was saying I can organize a basketball tournament tomorrow, and give a prize, a trophy and say hey, this is Southeast Asia best of three on three basketball presented by Brand X. Now, even if that event and the championship title and the trophy is not going to get you to the Olympics or anywhere else, I'm allowed to do it. Nobody owns basketball. Somebody owns Counter Strike, somebody-- And you're limited by their authorizage to do or not do a certain amount of things. And that changed the whole value chain in the whole ecosystem. And in the same way that it's super hard to bring the new basketball, you know, like many people have attempted to bring new sports; frisbee competition or football volley or whatever. But it's hard to spread it to get two billion people to experience with school, with their friends, with their parents to do an ultimate frisbee competition.
You can do that with the next game when Orient brings [??? 23:14]. They can distribute it in a couple of days and the whole world can decide to embrace it when Overwatch is launched with the idea of creating a franchise from scratch with more of a US type eSports business model, you can do that. So, the strength you have in competitive gaming activity can happen is also a witness. If tomorrow somebody comes with something nicer or more engaging or more in the time of new generation, it would take a matter of weeks for you, potentially to be discouraged. And that’s what I found fascinating in eSports is there are things that are there to stay. But it's super hard to predict because the barrier of entry is not as complicated with what you have, with what people call traditional sports that has been built through 50, 100 years, or step by step culture, habits, and adoption in household, in school, and things like that. And I think and that's me prophesying a little bit, I do from from time to time.
I think I see it as a transitioning phase towards something else. When VR would really be something that can truly be powered with a proper 5G network, some of the restrictive elements of Esports today, which is the ability to truly have multi-generation that can commune around one activity, which you can around football. Even if you're not a huge fan, you understand it, it's readable. Some of the challenges of eSports is, if you haven't played you cannot appreciate the show, the skills that are displayed in front of you because you don't get [??? 25:28], and you're not going to get it just by watching a couple of videos. So, I think that within the eSports category, some of the traditional, and sports simulation have a long way ahead of them to really expand. Because [??? 25:46] Formula One and some of these sorts of approach, the universality of content in being extremely simple and easy to read I think gives them a fantastic opportunity for growth. And that for me, is the next frontier is when you get a version of the game that is maybe more approachable by a wider audience, not just a young Gen Zed from where a father could play and have the skills and then enter this-- When somebody cracks that, then you might have something a bit more multi-generational.
Pritish: Brilliant. David, this was an amazing conversation. Thank you very much for your time.
David: Likewise, it was very, very nice to exchange and to pause for a second to look at those very interesting questions.