- David Ellison says the new Paramount will be a “world-class media and technology company.”
- He’s the son of Oracle founder Larry Ellison, so he definitely has tech connections.
- But why does that make Paramount a technology company? And does it need to be?
In finally acquiring Paramount, Hollywood producer David Ellison might think he’s buying a struggling movie studio and TV conglomerate.
And you would be right!
But Ellison says he’s getting much more than that with his multi-billion dollar fortune: He’s also buying the foundation for what will eventually become a “world-class media and technology company.”
If that sounds familiar, there’s a good reason. This spring, I noticed people in David Ellison’s camp telling journalists that his plan to revive Paramount involves injecting a lot of technology and tech know-how into the company. And the implication was that at least Several Half of that would come from Oracle, founded by his father, Larry Ellison, one of the world’s richest men and a major investor in the new Paramount company.
We’ve heard it before from David Ellison.
As I noted back in April, Paramount’s pitch to tap Oracle doesn’t make sense — and David Ellison isn’t exactly doing that right now — but he’s definitely leaning into the idea that he’s building a media company that’s also a tech company.
Here’s what he said on an investors call Monday morning to pitch the Paramount deal (this is a hastily transcribed transcript):
“We need to transform the New Paramount into a world-class high-tech media and technology company. The first step is to strengthen our core competencies in cross-media storytelling. However, as we look at the current landscape, we are seeing many technology companies rapidly expanding into media companies, and we believe it is essential for Paramount to expand its technological capabilities to become both a media and technology company.”
Ellison then presented slides from a presentation touting the company’s technology plans, including improving its streaming service, using cloud servers and “using AI tools to improve production efficiency while enhancing creativity.”
And Ellison continued to forge ties with his father’s friend Steve Jobs, Apple, and Pixar, the animation studio Jobs built and eventually sold to Disney.
“I was fortunate enough to study under Steve Jobs and witness him build Pixar from the ground up. [Pixar leader John Lasseter] It has always been the case that art challenges technology and technology inspires art. [the] We believe that understanding the symbiotic relationship between art and technology is essential to meeting this storytelling moment.”
In theory, this all sounds great, or at least interesting. But it’s also a bit of a head-scratcher.
One reason is that David Ellison isn’t a tech mogul: He’s a producer who makes and sells movies and TV shows, just like most others in the industry. (Representatives for Ellison didn’t respond to requests for comment.)
During the call, Ellison was touting the success he and Lasseter had in using Oracle cloud technology to launch an animation division, and you could take him at his word. But it was a bit reminiscent of 2015, when digital publishers like BuzzFeed and Vox Media told investors they weren’t media companies, they were technology companies that made media. Spoiler alert: they were media companies, after all.
The bigger problem with tech + media pitches isn’t that technology and media aren’t intertwined; they are inextricably intertwined.
The real problem Paramount and other big media companies have right now isn’t that their technology isn’t good enough. scale It’s not big enough.
Why media companies want to be perceived as tech companies
That’s why media companies like Paramount are so often mentioned as potential M&A targets: Investors believe Paramount alone can’t compete with the likes of Netflix and YouTube.
That’s why there’s so much talk about streamers trying to band together — something Ellison and other former managers at Paramount have spoken about openly.
So, tech-enabling Paramount’s streaming operations would be a good thing if Ellison and his team could actually do a better job than Paramount’s veteran staffers. But it probably won’t be enough.
“Streaming technology across traditional media is disappointing, and it all needs to be upgraded,” says Lightshed Partners analyst Rich Greenfield, who wrote a prescient note on the subject last week. “But great technology means nothing without tons of content, because you need many times more minutes of viewing per user per day.” Because that’s how you calibrate the helpful algorithms that help you find the shows and movies you want to watch.
All of this explains why the Paramounts of the world aren’t just battling the Netflixes, which have deep tech cultures married to vast catalogs of content they’ve mined over the years, but also companies like Instagram, YouTube and TikTok, which are leveraging their tech savvy to fuel an endless supply of content that they provide to users for little or no cost.
So in the best case scenario — if David Ellison really is a tech genius or knows how to harness tech genius — he’s going to have a tough job. And what if he turns out to be just someone who’s good at making TV shows and movies? It’s going to be even tougher.
