Kevin Mayer says his investment strategy in Candle Media, the slick entertainment startup he heads with Tom Staggs, is a product of his career time at Disney and TikTok.
While these two companies are giants and Candle Media is a newcomer, the claim isn’t as outlandish as it sounds.
At Disney, Mayer was largely responsible for launching the direct-to-consumer business that became Disney+. And because Disney, Pixar, and other group content was exclusive and secured within a walled garden, this increased the demand for premium, independently made content. Candle Media has set its sights on becoming just such a supplier.
At TikTok, learn to appreciate the power of platform-based targeting, personalization, and the scalability of commerce opportunities. While Candle Media is not a tech player, Mayer says the company is in the business of buying companies with well-defined audiences.
Explaining how “rating haters” initially poured cold water on Disney’s purchases of both Pixar and Marvel, Mayer said both of Candle Media’s major acquisitions were expensive but good value.
“You have to look at the potential for cash generation under your ownership,” Mayer said, speaking Wednesday in Singapore at the APOS conference. “We didn’t overpay for Hello Sunshine.” The acquisition of Reese Witherspoon’s company headed by Reese Witherspoon for $900 million in mid-2021 shocked many observers. Mayer says her audience is well-defined, run by women for women.
Purchased for $3 billion, Moonbug Animation is built on an IP that originated largely on social media. His flagship CoComelon has grown to 140 million followers on YouTube and is now a hit show exclusively licensed to (Walled Garden) Netflix. “We paid a lot more. It would be worth a lot more,” Meyer said.
He went on to say that these and future acquisitions are creator-led companies where Candle Media can provide the commercial aspects. “In Asia, we are looking to grow companies in the areas of film/television, social, and commerce,” he said. This year Moonbug acquired One Animation from Singapore. The deals tend to be a mixture of cash and Candle Media stocks.
Mayer has also focused on the future of premium VOD and its moves by companies like Netflix to add ad-supported layers. “I think it’s quite clever,” he said, supporting his conclusion with the example of (Disney-owned Hulu. When that company added a $6 per month lower premium tier, it generated more than $8 per subscriber in ad revenue.” Both cases.”
He said that companies such as Peacock and HBO Max that are late in the streaming market could succeed in their quest to go global. “There will be some consolidation,” he said. “But [streaming video] Not a winner takes all the situation [unlike music]. If you want to watch “The Morning Show,” you have to subscribe to Apple. If you want to watch “CoComelon”, you have to subscribe to Netflix. No one needs to subscribe to both Spotify and Apple Music. They have the same content with a different interface. ”
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