Skydance CEO Ellison says new Paramount will become a tech-media hybrid
Adds quote from Reuters interview with Paramount's next president, Jeff Shell, in last two paragraphs
By Dawn Chmielewski
July 8 (Reuters) -Skydance Media CEO David Ellison sketched out a vision on Monday for Paramount Global PARA.O as a technology-media hybrid company at a time Hollywood has been competing for attention with tech giants moving into the entertainment business.
In an hour-long presentation to the financial community following the announcement of a merger agreement with Paramount, Ellison invoked Steve Jobs, describing the late Apple AAPL.O co-founder and Pixar Animation Studios leader as a mentor who informed Ellison's view of the relationship between art and technology.
"The art challenges the technology and the technology challenges the art," said Ellison, recalling a favorite Jobs quote. “We believe that understanding of the symbiotic relationship between art and technology is essential to be able to meet this moment.”
A "key thesis" behind the merger of Skydance, a media company launched in 2010 to capitalize on the rise of streaming media, with the century-old Paramount whose roots extend into the silent film era, is to position the company to better meet the demands of a changed market. Ellison discussed making changes to the Paramount+ streaming service and hinted at using artificial intelligence.
“There are a lot of technology companies that are rapidly expanding into media,” said Ellison. “We believe it is essential for Paramount to be able to expand its technology prowess, to be both a media and technology enterprise.”
Ellison told investors he would work to improve the algorithmic recommendation engines that Paramount+ uses, hoping subscribers will spend more time on the streaming service and that fewer will cancel.
He also proposed upgrading the advertising technology to give marketers more information about which audiences they reach.
A slide deck accompanying the investor call described how artificial intelligence would “turbocharge content creation” and help drive “efficiencies” and streamline operations.
“One of the things that people are underestimating" about Ellison "is his sense of tech, compared to some of the other guys … maybe with his father’s help or just his upbringing,” Endeavor CEO Ari Emanuel said in an April interview with Reuters. Ellison's father is Oracle ORCL.N co-founder Larry Ellison.
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Ellison's tech pedigree factored into the decision by Paramount controlling shareholder Shari Redstone to strike a deal with Skydance, a longtime production partner of Paramount, according to a source familiar with the discussions.
"Skydance is well aware of what we have accomplished over the years and it is for that reason that they have pursued a combination with Paramount,” Redstone wrote in a note, seen by Reuters, to Paramount’s employees on Sunday night after the merger was announced.
“They have a clear strategic vision for the future and the resources to build on Paramount Global’s competitive advantages to drive the company’s success."
Ellison described how Skydance worked in partnership with Oracle to create a cloud-based animation studio. Skydance used this “studio in the cloud” to produce part of “Spellbound,” an animated film scheduled to be released this fall on Netflix NFLX.O. He said the approach increased efficiency and reduced costs.
“We intend to scale that business across all of our production workflows and animation,” said Ellison.
Tech is also at the core of storytelling at Skydance’s two interactive games teams, a virtual reality development studio behind “The Walking Dead: Saints and Sinners” and an interactive group partnered with Walt Disney DIS.N and Marvel to produce the forthcoming title, “Marvel 1943: Rise of Hydra.”
Ellison is using AI in a way that he described as “really pushing the boundaries of what’s possible in game-play."
Jeff Shell, the former NBCUniversal chief executive who will join the newly merged company as president, told Reuters Ellison is well equipped to help navigate the entertainment industry's technological change, "as somebody who writes scripts and is in table reads and was an actor at one point and also, by the way, can code."
"David is one of one," said Shell. "And he's going to define ... the identity of new Paramount."
Reporting by Dawn Chmielewski in Los Angeles; Editing by David Gregorio and Muralikumar Anantharaman
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