Tom Ryan

Keep an eye on Rembrand, a digital platform using AI to add virtual product placement into videos. They just raised $23 million from savvy investors like Tom Chavez and others. The concept is relatively simple and has been around for a while, but the company is definitely getting some traction. Rembrand began with YouTube and expanded to LinkedIn, TikTok and Instagram. They’ve also worked with about 20 brands including those under PepsiCo, L'Oréal, and Amazon. The company is led by CEO Omar Tawakol, who has great startup experience. He sold data management platform BlueKai to Oracle in 2014 and voice collaboration platform Voicea to Cisco in 2019. It’s another intriguing use of AI and video, and it gives advertisers another weapon in their arsenal as they monetize content. What other uses of AI advertising have you seen that impresses you?

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Dude Perfect raised $100M for global biz expansion. The deal is getting lots of buzz, but our team’s math signals challenges ahead. Let’s break it down… DEAL DETAILS • $100 - 300M growth capital investment • Led by Highmount Capital • Unclear if 100% invested upfront OR draw down of commitment over time • No previous capital raised USE OF FUNDS • Hire mgmt team to expand biz • More live experiences incl int’l tour, consumer products • Grow content formats, frequency, channels, global localization e.g. animation, TV, movies, streaming • Extend brand beyond 5 founders by building talent network • New HQ in Frisco, TX as prod facility and “family-friendly entertainment destination”: – Retail store, podcasts / gaming / fan UGC spaces, trick shot tower, DP museum, mini golf, restaurants – Original plans for 3-story, 30 acre facility est to cost $100M+, 2 yrs to build COMPANY OVERVIEW: Dude Perfect • Digital-native comedy and sports media brand • Faith-based mission: “We’re about giving back, spreading joy and glorifying Jesus Christ”  • Other YouTube franchises: “Stereotypes,” “Overtime”, “Bucket List”  • Media brand also incl books, mobile games, board games and toys, and merch / retail / food and beverage partnerships • 25 current team members PERFORMANCE HIGHLIGHTS • 60M YouTube Followers, 17B views • Est 2024 revenue: $50M per DP • Est 2023 and 2022 revenue: $25M and $20M per WSJ  • Consumer product partnerships incl Nerf toy line, Columbia Sportswear • Partnered with A Parent Media co to launch a streaming service • ESPN “30 for 30” doc premiering at Dallas Int’l film festival • TV series on CMT in 2016, later aired on Nickelodeon • Alternate broadcasts for Amazon’s Thursday Night Football • 4 live nationwide tours as of 2023 ORIGIN STORY • Founded 2009 by 5 friends at Texas A&M • Cofounders = twins Coby Cotton and Cory Cotton, Tyler Toney, Cody Jones, Garrett Hilbert • Started as YT channel featuring trick shot videos INVESTOR OVERVIEW: Highmount Capital • Growth stage and middle mkt PE fund for tech, media, healthcare • Founded in 2023 by jason illian and David Hawkins • 4 team members on website + advisor • 3 team members have faith-based ties per bios • No other investments listed on website other than DP My takeaway... I really like and support the trend of increased investment into YouTubers and digital-native media brands. But as I wrote about in my 2024 State of Creator x Media capital markets reports (will link them below), investment must match market and opportunity size. To ensure good ROI, and to set good precedent for future investment into our space. The DP bet is exciting, but could be overly optimistic based on our prelim math. My colleague Michael Booth's post breaks the math down (link below). More analysis to come in my Friday newsletter. —- I’m the founder of RockWater Industries. We do m&a and strategy advisory for media, agencies, and creator economy. My dm’s are open. #media #agency #creatoreconomy

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Ziff Davis acquired CNET for over $100M. The new owner is betting on more digital M&A with its $670M warchest. That price is down from $1.8B CBS paid for it in 2008. And $500M current owner Red Ventures paid for it in 2020. Let’s break it down👇 ---SELLER: CNET--- • Tech news and reviews site • Drives traffic via SEO • Monetizes via affiliate links • 38M visitors in Jun 2024 • Launched 1994 ---M&A HISTORY: CNET--- • 2002 CNET Networks acquired tech publisher Ziff-Davis Inc. (different co) and ZDNet for $1.6B • 2008 CBS acquired CNET Networks for $1.8B • 2020 Red Ventures acquired CNET for $500M ---SELLER OWNER: Red Ventures--- • PE-backed marketing-turned-media company • Provides client services, owns brands, makes investments • Portfolio incl Bankrate, Lonely Planet, Points Guy, others ---BUYER: Ziff Davis--- • Vertically focused digital media and internet company • Brands incl PCMag, Mashable, IGN, Retailmenot, Lifehacker • 2010 CEO led buyout of ZD w/ Great Hill Partners • 2012 ZD sold to J2 Global, went on M&A spree • Founded 1927 as mag publisher ---FINANCIALS: Ziff Davis--- Stock price as of 10:10AM ET on 8.12… • Stock price: $41.64 • Mkt Cap: $2B • Down 38% YTD • Down 39% YoY 1H 2024 financials as of 6.30.24... • Revenue: Up 0.3% to $635M • Adj EBITDA: Down 2% to $197M • Adj EBITDA margin: Down 0.7 pps to 31% • FCF: Down 27% to $73M • C&CE: $687M ---DEAL DETAILS--- • Undisclosed • Will close in 3Q 2024 ---DEAL VALUE PROP--- • Audience is attractive to tech advertisers • Target consumers/businesses navigating tech/telecom purchases • Part of ZD digital media rollup strategy ---WHAT ELSE I FIND INTERESTING--- I'll write more about the deal in my newsetter this Friday. I'm curous to dig into financial performance trend of Ziff Davis, which we can see in public filings. Of note, its 1H 2024 performance has declined VS 1H 2023. Wonder what the key macro VS micro drivers are. I want to better understand viability of its digital media rollup strategy, and future M&A strategy, particuarly since it has $670M of cash on hand and CEO Vivek Shah said he wants to keep doing deals. --- I'm the founder of RockWater Industries. We do M&A and strategy advisory for media, agencies, and creator economy. My DMs are open.

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Ray-Ban Meta Stunt Test is Crazy 💀🔥 Yesterday, Meta unveiled their latest AR innovation, the Orion glasses, and today they're putting Ray-Ban Meta to the ultimate test. Joining forces with the unstoppable duo of @John Cena and @Benson Boone, Zuck himself is taking these glasses on an epic stunt-filled adventure. Mark on Fire 🔥 Mark with a Katana 🥷🏽 Mark vs a WWE Legend 🛎 Guess what? Glasses are holding up like champs! This is more than just a product demo; it's a masterclass in how to launch a new tech gadget. By combining humor, action, and a touch of celebrity, Meta has created a viral sensation that's already taking over social media. I love how Mark balances the serious side of tech with a playful spirit. It's a refreshing approach that makes you want to be a part of the Metaverse 👽 What do you think of this epic crash test? Let me know in the comments! #Meta #RayBan #AR #VR #Zuckerberg #JohnCena #BensonBoone #crashtest #tech #innovation #seriouslyfun

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Roblox is a platform to advertise on but most people don't realize how many unique ways there are to bring your message to life. There's programatic ads, custom integrations, owned bespoke experiences and even ads inside social media game/experiences like Clip It. Check out this article from Digiday written by Alexander Lee. Good insight from Ben Sarraille. I was happy to get my two cents in as well for Sawhorse Productions. It's exciting times for immersive marketing. If you aren't exploring these UGC gaming platforms, you aren't reaching Gen Z and Gen A as well as you might think... #roblox #ugcgaming #marketing #metaversemarketing #innovation

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Is Paramount's Tech Transformation Just a Pipe Dream? In the ever-evolving landscape of media, David Ellison’s announcement about transforming Paramount into a tech powerhouse stirred quite the conversation. Including by me: https://lnkd.in/eBsi2xbi But as we dive deeper, several challenges emerge, casting shadows of doubt over this ambitious pivot. #1. Financial Feasibility With Paramount grappling with substantial debt and pressing financial obligations, notably hefty NFL payments, the costs of attracting top tech talent become a significant concern. Can Paramount realistically afford this tech overhaul amidst economic uncertainties and a struggling stock? The talent war isn't won on ambitions alone, especially when competitors like Google offer more stable havens. #2. Creator vs. Coder Paramount’s tech ambition, while necessary, seems at odds with maintaining the creator-friendly environment Ellison dually promised. In an era when interest rates have climbed, balancing tech innovation with creative freedom is a tightrope walk. Remember, even Netflix, once a haven for creators with its blank checks during #ZIRP, is tightening its purse strings. How can Paramount navigate these waters without the cushion of a tech giant's capital or rising stock prices? 3. Building vs. Buying Tech Infrastructure David Ellison’s plan for Paramount involves a substantial commitment to developing in-house tech capabilities, focusing on cloud services, AI, user interfaces, recommendation algorithms, and ad-serving technologies. This approach aims to differentiate Paramount from competitors and enhance user experience. However, the tech sector’s history suggests leveraging established third-party platforms could be more cost-effective and reliable. Giants like Disney have successfully integrated platforms like BamTech, while HBO initially utilized external technology before transitioning. AMC Networks similarly relies on Brightcove for streaming technologies. The pivotal question for Ellison is whether the potential benefits of custom-built solutions justify the investment and risk, especially when patching together proven third-party solutions might yield quicker and more economical results. #InEssence... These challenges are monumental, yet not insurmountable. As we watch Paramount’s narrative unfold, one thing is clear: transitioning into a tech entity is more than just a strategic pivot—it’s a gamble on the future of entertainment itself. Thoughts? #Paramount #StreamingWars #MediaTech

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Recently, I was part of a panel on generative AI at the TechCrunch Disrupt conference, moderated by Amanda Silberling. Amanda asked a great question, “But is it Art? How to harness generative AI in music and video production without displacing artists.” At Splice we support producers at various stages of their creative journey, from Grammy-winning artists to bedroom producers. With my experience building creator tools at GitHub and Adobe and most recently Splice, I think about this question all the time. First – there will be plenty of bad content made with AI – click bait designed to capture micro-seconds of attention in an increasingly noisy world, and in some cases, this will be designed to do real harm. So, yes – there will be “AI slop” but there will also be great things created with AI - and some of it will be art. And, the way we think of art will change over time. “Appalachian Spring" by Aaron Copeland won the Pulitzer Prize for Music in 1945, and Kendrick Lamar’s “DAMN” won the same prize in 2017.  Storytelling evolves, Art evolves, and with AI – it will evolve even faster. As more people have access to these tools, artists will take even greater risks and break boundaries - innovation will flourish, and art will move in extraordinary new directions. But before it can do that, as an industry, we MUST agree to do three critical things.  1. Respect the rights of creators. Provenance matters. We must ensure AI-assisted works don’t exploit the original contributions of artists. 2. Copyright clarity should be provided to everyone using these tools. Creators need to understand their rights around ownership of new creative works made with AI. 3. Build tools that enhance the creative experience. Preserving the integrity of the creative process is paramount, and technologists must collaborate with artists to build the future. These three things are fundamental to the next phase of evolution as AI continues to converge with creation. I agree, AI will be at its best when people don't know they’re using it - but I know people who love making music are not looking for AI to take away their creative experience.

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