This week’s podcast is a deep dive into iQIYI's activities in generative AI, which is a natural evolution from their long focus on digital transformation.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the TechMoat Consulting.
———
I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.
This week’s podcast is a deep dive into iQIYI's activities in generative AI, which is a natural evolution from their long focus on digital transformation.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the TechMoat Consulting.
———
I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.
Welcome, welcome everybody. My name is Jeff Towson and this is the Tech Strategy podcast from TechMoat Consulting. And the topic for today, why IGE is the Gen AI innovator to watch, or at least in video entertainment for sure. Now IGE is very cool company. I don't think it gets nearly the attention it should outside of China. I mean, it's an entertainment video entertainment platform. So think Netflix, although it's kind of closer to HBO, it's very quality-focused. Sort of like Netflix plus YouTube, in that sense. Big player in the creation of original programming, TV shows, movies, a lot of dramas, things like that that win awards all the time. But it's also a pretty serious tech company that's been doing tech for a long time and it's owned by Baidu, who is arguably the AI leader of China. So it's in a very interesting place as Generative AI really hits the creation of content in a major way. I mean, Generative AI, it's about generating content. Well, they're in the content creation business. So they're really sort of a ground zero for this. Fascinating companies. I wanna talk about not necessarily the company which I've covered before. You can find it in the company library. I've written a lot about their financials and whatever. But I want to talk about their digital and now AI transformation plan because they really are at ground zero of this. And I'm trying to understand it better myself because there's a lot going on that they're doing that I don't understand by the nature of you know sort of the entertainment business. But I think there's a lot of cool lessons. I'm going to sort of give you four lessons that I think matter for AI transformation which I really learned by watching IG. Anyways that'll be the point for today. Cool company to talk about. Let's see do I have any? Nope, nothing to mention. We'll do the standard disclaimer. Nothing in this podcast. My writing or website is investment advice. The numbers and information from me and any guests may be incorrect. The views and opinions expressed may no longer be relevant or accurate. Overall, investing is risky. This is not investment legal or tax advice. Do your own research. And with that, let's get into the content. All right, let's start with 30 seconds in tech news, 'cause a couple interesting things happened this week, actually. Number one is Apple abandoned their electric vehicle after 10 years. Apparently 2,000 people are working on this. Now, I mean, if you've been following me, you know I'm not a big fan of Apple as an innovator I don't think they innovate. I don't think they've innovated in any significant way in 10 years. I think they're an exceptional operator. I think they have great proven products and they're operating You know like mad globally and growing their revenue and growing I think they're great at that, but in terms of innovation, creating new things that thrill the customer, I don't think they do much. I mean, AirPods, so I was never sort of a believer in this. And sure enough, 10 years on, all that money spent, who knows how much it's been? A couple thousand people, they basically pulled the plug. Nobody's ever seen their electric vehicle, let alone an autonomous vehicle. At the same time, the company I am optimistic on as a very aggressive innovator is Xiaomi. And when three years ago, Xiaomi made the announcement, we're getting into electric vehicles. I kind of raised a little flag. I said, "Look, if anyone's going to us and Evie, I think it's Xiaomi because their team, late June and the team, they're exceptionally good at creating new stuff and jumping from them. They've been in so much. It's the same team. They've been with late June for 25 years. They've jumped from gaming into messenger and then they jumped into smartphones and then they jumped into smart phones and then they jumped into smart devices and you know, and even in Xiaomi the store, if you ever go to a shopping mall, let's say in Asia, and the Xiaomi store often will be next to the Apple store. The Xiaomi store will be packed because what they're very good at doing in their own words is continually thrilling our customers. They're always creating new stuff, smart backpacks, smart air purifiers, smart chopsticks, whatever. So that's why people always go into their stores. What's new? That's like from their 10K. They need to continually thrill our customers. Apple, which would be across the hall, is almost always empty because they don't create new stuff. I can tell you what's in the Apple store now. It looks almost identical to eight years ago. So when Xiaomi said we're getting into cars, I paid attention. And they're releasing their first design for their electric vehicle three years after they announced we're jumping into the space. We have no experience in it. Compare that to Apple. Anyways, a little bit of a dig there, I suppose. All right, other point, and then I'll get into the content. In terms of the tech regulation aspect, you know, people always debate the autocracy versus democracy. Oh, this is the US. Oh, this is, you know, for me, that's always the secondary dimension. For me, the first dimension, if I was going to chart it in a 2x2, is smart versus dumb. And certain countries are smart and certain companies, countries are dumb. And some of the smart ones are more autocratic and some and aren't. And, you know, it's a two by two. India is kind of a wild card. I mean, I've said for a long time, I think China in particular has the smartest digital regulation I've seen. It's very thoughtful. U.S. is a bit of a mix. They don't do too much of it. I thought Australia was idiotic, same with Canada. Indis a bit of a wild card. They jump all over. They're very aggressive. And sometimes it's kind of smart and sometimes kind of dopey. And anyways, they had a hold my beer moment this week where apparently we'll see what plays out. You have to get government approval for AI foundation models. Like, if that's true, every AI engineer is already like looking for a job outside the country. Like, we'll see if this is real, but this may be, this is a strong contender for the stupidest digital regulation we've seen in 2024. Like, we'll see what it really is in practice, but that was a report. And yeah, it was if you want to take yourself, I mean, the players for AI are China and the US, mostly. Those are the leaders. India is a bit of a question mark, but it could be a major player. This would end that basically, but we'll see. Anyways, keep an eye on that. That was kind of interesting. Okay, let me get into the content here. Now, this is going to be deep dive on a business. I try and stay focused on either a digital lesson or a deep dive on a company. I'm going to try and keep this to two hour or I'm sorry, 30 minutes, not two hours. So let me get to sort of the so what. All right, not two hours. So let me get to sort of the so what. All right, why is Iche the Gen AI innovator to watch in my book? Okay, I'll go through a little bit of the basics of Iche for those of you who aren't familiar, but I'll just give you my shortlist. Number one, they are sitting dead center in generative AI. Generative AI is okay at some things it's great at it's great at coding. It's pretty good at specific tasks like checking contracts. It's not great at reductive you know deductive reasoning and getting the right answer. If you ask it to do something simple count how many cars are in a parking lot, let's say Chad GBTE, it probably gave you the wrong answer. Logic is not a strong suit. Being right versus being wrong is difficult in general. It's not awesome at it, depending on what you're talking about. It is very good at creative content. If you ask mid journey to create 10 different paintings of a pirate, I don't know, on a battleship, it will create 10 different ones that are all interesting. And because it's creative, there's no wrong answer. So for an artist or content creator, you can use that to generate options and ideas and then pick the two that you think are good and build on those. It's very good at creative endeavors. Okay, IGE, you know, it's a shame. It's Chinese language entertainment, so it's hard for people who don't do that to watch it. But if you were going to the IGE app, which is great, it's a lot of TV shows, it's a lot of dramas, it's a lot of movies. And you can stream and be a subscriber and things like that. But they will also do releases, major events, people always say they're like Netflix and YouTube, for those of you from the West. They're closer to HBO. They're closer to the companies that make the sopranos or House of the Dragon or House of Cards, which would be, that's Netflix, right? The high quality stuff that one, it gets a lot more attention because it's high quality, but it also becomes somewhat of cultural moments. And ICHE is good at that of being sort of on the cusp of cultural trends and cultural moments where this is the TV show everybody's talking about. And their strategy is about being that sort of on the frontier of cultural events of trends, not just churning out mediocre content in great volume, which is kind of the Netflix strategy in my opinion. So closer to HBO, you know, closer to House of Cards and House of the Dragons and Sopranos, then you know, whatever the latest Netflix show is, which is probably going to be mediocre at best. I like Netflix. I'm just saying like 90% of their content isn't awesome. Anyway, so they're like that. Okay, within generative AI, I wrote about this for subscribers this last week that bite dances generative AI is a major problem for bite dance because what does generative AI do? Now at the simplest level, you can do things with greater efficiency and productivity. It's a great creator tool. You can increase the quality of your content. It'll make it better. It can do suggestions. So AI, and really digital technology in general, when you're thinking about video content, you're going to get an immediate boost in efficiency, productivity, and probably quality. AI is good at studying trends and seeing what people are watching and then crafting shows and scripts and so on. But that's not what IGE does. That's closer to what ByteDance does. Lots of content creators making 30 second one minute. Now, IGE is doing long-form quality video entertainment, entire series of 10 TV shows, long movies. That is a different type of generative AI when you're asking it not to make a more compelling 30-second video clip, but to make a better movie. So they're in an interesting niche of applying generative I to a very special special case of the highest quality long form television and movies. And that's why I would call that video entertainment like it's, you know, that's Hollywood. And that's I Chi and that's Ali Baba pictures is pretty good. So within that world, yeah, you're going to get some efficiency gains and some quality improvements by being more data driven. And I'll talk about what they're doing. But really what you're giving people who are professional entertainment creators, you're giving them the greatest tool that's ever been created. Generative AI is like giving every director and production house and script writer and all those teams in companies like IGE or Hollywood Warner Bros. You're giving them the most powerful tool anyone's ever given them. The ability to create truly great content, long form video with a couple people. It's, I mean, it's a spectacular tool for creative endeavors and creative professionals. So that's why I kind of think I cheese very interesting 'cause they're not just at the center of content creation and video entertainment, but they're in a very important niche, which is long form video of the highest quality of storytelling. That's very different than making a cat video that gets views. Okay, so that's kind of number one. They're dead center in the most exciting space of generative AI. All right, let me give you a little bit of the basics of IT for those that might not be familiar. I mean, it's as I've said, it's an app, but you can actually watch it on multiple screens, TVs, things like that. But a lot of television shows, a lot of movies, they're very good at dramas. They win all these awards every year you know of the 10 most viewed dramas in China in 2023. Iche put out seven of them. Now they may create those themselves in-house, so they have full studio capabilities, but they can license them, they can do co-vengers. I mean, there's a spectrum of ways you create quality entertainment, but their business imperative is to consistently produce and deliver premium quality content that That is a long form entertainment. Right. That's their model. And against that sort of imperative, they then monetize mostly by subscriptions. Now they have like, I forget how many like seven, eight, nine different levels of subscription of how much you pay and what services you get in a lot of tiering, which is not uncommon. But, you know, if you're trying to get people to survive long term, you can do them Netflix model. We have an endless soup bowl of mediocre, mediocre entertainment. Or you really wanna sign up for us 'cause we have house of cards and we have the sopranos where HBO. Like so that premium niche lines up very nicely with middle and upper middle income people who want the really great quality entertainment. It's a good, I mean, I like the HBO Max strategy more than I like the Netflix strategy. Okay, so if you look at their financials, they're publicly traded so you can see all their numbers, revenue is mostly coming from subscriptions. I'll give you the numbers for 2023. Revenue for 2023 which would be Rem-N-B. These are unaudited total revenue 31.8 billion Rem-Nin B. So divide that by 7, you get sort of US dollars. And that was up from about 28, 29 the year before. So I mean, they're growing. But it's not a rocket ship or anything. It's more like a steady increase. And then when you look at what if that is coming from subscriptions, 20 billion remin B is from subscriptions. That's about 2.9 billion US dollars. And that's out of the 30 billion, 32 billion total revenue. So most of it's subscription based and that lines up very well with their quality entertainment focus. They also make some money from ads. They're going international now, which is interesting. They're going to Thailand into Asia. I think further afield, maybe into the UK and other places doing sort of cross border. I think content deals is what they're focusing on. I'm not totally sure. But okay, see, look at membership subscriptions. They have about 100 million members, subscribing members in Q4. But again, see look at membership subscriptions. They have about 100 million members, subscribing members in Q4. But again, there's a lot of different tiers of membership. So you kind of have to look at the subscriber mix within that. The monthly average revenue per member is about 16 remin B. So two to three dollars per member per month. But again, you got to look at the mix and that's That's pretty good. I mean for China if you look at the history of getting people to pay for a subscription video It's been very difficult because for you know 2008 I can remember being in China everything was all content was just free videos were all free and If you wanted to get something you could walk down to any corner store and buy any discs you want for nothing. So getting Chinese consumers to pay overtime for content has been kind of a long march. But it's there now and that's how they've gotten to operating profits, which was an important milestone for ICHE. Anyway, so that's how you kind of break it apart. I mostly think about them as HBO with a little bit of YouTube thrown in. The advertising is there as well, about 876 million US dollars as well. So that's there as well. Okay, now what I think is cool about them is when they start to talk about the management is really good to listen to, by the way. They are very thoughtful about what they're doing in AI. And they speak very clearly about what they're building and what is the impact on the business and the user experience. And that's because they have been an inner team. This is kind of point number two. They have been an entertainment plus tech company for a long time. And they have been doing major investments in digital transformation for a long time. So the AI, the generative AI wave, they're already down this path. This is just sort of the next step forward for them. So they're very well positioned to move quickly in this, which they did when generative AI hit, you know, November 2022 with chat GBT. Two of the fastest companies to move in China against this were Baidu and Ichee. They were some of their really bite dance. Obviously, he's been in the news recently because even the founder has said we were way too slow in terms of generative AI. Kind of almost scolding the company a little bit, not scolding, speaking more starkly than is normal. But Ichee and Baidu know they were quick. And generative AI at Baidu, you know, they've released Ernie bot years ago. So they've already been in the space before chat GPT sort of, you know, rock the world. Okay. Now, as you start to look at how can generative AI impact a company like this long form, high quality premium storytelling and video entertainment. I struggle with this for Ichee and that this is an area I've been trying to get smarter at but I don't because there is so much that goes on in the creation of that type of content that I don't understand. When we talk about applying digital tools in generative AI to e-commerce, I understand how it impacts the major workflows that happen in e-commerce. Demand projections, the user experience, matching search, logistics, fulfillment. I know how it works internally. The way they create very high quality video entertainment is more of a black box to me and I've been trying to get smarter at it but what they appear to be doing and I've been reading the comments what they appear to be doing is a combination of proprietary built internal technology tools that are very good at doing the unique type of business they're in and combining that with external tools that they're adapting and Baidu is on the shortlist obviously and they've already done very quickly they did a deal with Baidu to start adapting Ernie Bot which is a little bit like chat GBT into things like checking scripts, script analysis, character analysis, things like that. But they're really going to combine that with their own proprietary tools. And they already have a pretty good suite of digital tools, not AI. The ones they talk about are content information. This is where they have digital, they look at a lot of data, they do a lot of recommendations. That's for script analysis, revenue and cost estimates, financial dashboards, status of products, status of scripts. They have a whole system called the producer business intelligence, which if you're doing a production, it'll have everything from financial management to IP licensure to distribution. They have a talent info management tool, which might be used to sort of track the screenwriters, the actors, the crew, the casting calls, who's available, who's going to be in this product, all of that. Now that part gets more interesting because we're starting to look at what you could call AI casting, where you're no longer casting people in productions, you're casting AI avatars that you can't really tell the difference from people, or maybe they're animated creatures, things like that. And then there's another tool called the onset production management, which tracks shooting progress, how many remaining days, how many uses pages, daily reports, uploaded daily's budget breakdowns, all of it. So they've got a whole suite that they are now, moving in basically into AI, generative AI in particular. So February of last year, which would be a February 2023, which a couple of months after chat GPT, they announced a framework agreement with Baidu to connect with Ernie, the AI chatbot, for generative dialogue products. Not totally sure what that means, I assume that's quick writing. Mid-2023, they basically launched their own IGE, AIGC Content Technology Innovation Center. AIGC is artificial intelligence generative content. So basically they built their own unit focused on this and they've started to integrate the tools into their daily operations. The CEO, Yughong, it's really worth following him and the CTO. They speak very clearly about what they're doing. Here's a quote, quote, "In terms of generative AI, we are advancing every stage of content creation from planning, development, to promotion, enhancing both efficiency and creativity. These efforts not only improve content production and operation efficiency, but also unleash creative potentials." Quote goes on. "Our commitment is centered around fostering technology innovation to push the industrialization of content production, improve the user experience and boost operating efficiency. That's the phrase that I basically wrote down. You can see basically the playbook. They're leveraging digital tools and now generative AI tools into three areas in particular. Content production, which is the big engine, user experience and operating efficiency. That's a very good first pass framework for applying generative AI to basically any content creation business. But from their quote, he's clearly talking beyond their own company. They're trying to transform the entire industry. I like this phrase he said, technology innovation to push the industrialization of content production. That's very cool. Okay, that's kind of point number two is look, I G C, I G is right at the center of this. That's point one point two. They've been investing in digital transformation for a long time. So they were able to move quite quickly for this. Point number three, I have really four points. They have a very good framework for AI-based transformation of entertainment, which is pretty much what I just talked about. Number one, they're focused on making things-- well, they're focused on making things better, increased quality, faster, and cheaper. You could put those second two together call it productivity and they're really focused on a couple areas to do that. The first one obviously is content production which includes marketing. You know how do you use generative AI to make content production cheaper and faster including all the marketing stills, the posters, things like that, but that would include script writing, that would include production, that would include dialogue, all of that. How can you make it cheaper? How can you make it faster? And then ultimately, the big lever is how do you make it better? And how do you, well, that's the kind of thing that generative AI is very good at. It can look, LLMs are very good at digesting scripts by the thousands, finding common patterns for what works and using that to make recommendations for new scripts so that they're more satisfying for people, more enjoyable. And they've talked about this, like they can look at things like, how is the dialogue in this script? Where can it be improved? Which characters need more time to show their development? How much interaction is there? Is there enough conflict? Is there enough drama? Is there are there enough emotional beats? I mean, AI is very good at taking apart thousands of scripts and then sort of doing script analysis and recommendation. So you can see that in terms of content production, when you apply generative AI, you're going to start with text LLMs. And you're going to look at scripts and you're going to get dialogue and things like that. But then very quickly, you can go into image generation, you know, mid journey, things like that, They're very good. And so that's movie stills posters Things that catch the eye you can do all of that, but within content production obviously the big lever is video production Right, how do we use how can we use AI to look at? various video stills short segments and Make them better or how can we have it generate the video on its own? That's what's coming. And Sora, you know, has sort of shocked the world and showed that AI is very good at creating video. Very, very. So the first bucket would be content production, make it cheaper. That's an easy first win, make it faster productivity. And then true, make it better. That's where this becomes the ultimate creator tool at a certain point. Bucket number two, the user experience. That could be marketing. That could be how you interact with the app. That could be personalization of your own news feed, your own video recommendations, it could be better search results. There's a lot that can actually go into that, which is interesting, but the first pass of that will be something like, "It will get better recommending things you want to see," and the search engine will get better. But ultimately, user experience, the biggest way you improve user experience is personalization. So you can start to maybe customize the content more and more over time. That would be sort of bucket number two. And then the third bucket would be operating efficiency. That could be everything from the finance department to budgeting to HR to staffing to all of that. Okay, you're going to capture some other operating efficiencies that are involved, but obviously the big opportunity here is content production, and second to that is user experience. So that's not a bad framework, and their executives talk about this, I think it's very helpful, how they sort of frame what they're doing, so that's point number three. They have pretty good framework for digital and now generative AI based transformation of long form entertainment. And we'll get to the last point here, which is number four is they've already got some pretty good use cases moving. Pretty much the ones I just mentioned, the simple ones script analysis, better posters, you know, more efficient finance, fine. But the big use cases are the ones that are on the horizon and that's virtual production and building a digital asset library. Now this is the sort of digital transformation, now AI transformation, that really blew my mind when I visited Ichi 2023. Stunning, like the implications are stunning and they are clearly far down the path on this and they were far down the path on digital libraries and on virtual production before generative AI sort of made its big splash. And for those of you who are subscribers I sent you a couple articles on this detailing it out more. I'm going to try and write more about this. I think it's super important. But basically, the idea is, okay, when you talk about a digital asset, at a let's say Warner Brothers studio, historically what you're talking about is intellectual property. It's an intangible asset. It would show up on the balance sheet under intangible assets. You have the license, the rights, the trademark for Ironman. Or Mickey Mouse or some movie from-- I don't know-- The Terminator franchise, something like that. You've got an intellectual property library. And Disney has done very well over time by focusing on premium high-quality content like their famous animated movies that not only people want to see, but they create a library over time, which then they leverage into things like merchandise and theme parks and now recently, unfortunately, making live action remakes of all their famous animated movies, like The Little Mermaid and such, which are all pretty terrible, in my opinion. But, you know, okay, that would be what we'd talk about as digital assets in tangible assets. What have an intellectual property? Well, as things go digital in the process of content video production, there are a lot more assets that can now be digitized. The characters, as we mentioned, the main characters, but you could also basically create IP ownership, a digital asset library ownership, a digital asset library for all the secondary characters. Now you may not have done that in the past because nobody wants to license the random grandmother in some beauty in the Beast movie, but this isn't about licensing them into a merchandise situation or a theme park ride or another movie. No, this is about taking these digital assets and using them to create more videos, putting them into virtual digital based productions. Suddenly, we have a whole long library of potential characters, the famous ones, the secondary ones. And in fact, we could digitize all the extras that show up in an animated movie or in a physical production, and we can reuse them whenever we see fit in any way in production. And you can go beyond the people, you can digitize the sets. You can digitize the sound effects. You can digitize the music. You can digitize the music, you can digitize the voices, you can digitize the vehicles people drive around in Dune 2 and have those. You can create basically a massive digital asset library of intellectual property of 3D models, of motion capture capture data of panoramic videos and then you can start to feed that into new productions which are becoming more and more virtual i.e. done on computers not in real life. So that whole digital asset thing is really interesting. If you go to the iQE website, you can actually see a library of various digital assets that I assume that you can just license or buy. So there are various vehicles from some of their movies, there are scenes, there are factories, there are buildings, there are landscapes. I assume that's for other production companies or anyone who wants to use that in their own production. And that goes hand in hand with the other big idea, which is virtual production. As things more and more get created, this was already happening before generative AI. More and more things are being created video entertainment on a computer with some degree of filming on set, but maybe a film a little bit and then you put in some digital assets in the background of for the landscape or the buildings or whatever. Yeah, but generative AI we just kind of said is unbelievably good at generating content on its own. So that's all going to jump to the next level. So if you take virtual production that can feed in live action footage or live footage plus a massive digital asset library and let the generative AI go to town and create whole segments, short TV shows, whatever you want. That's when they talk about transforming the entire video production industry, industrializing content creation. That's what I think they're talking about. And what that -- I'll give you a quote from their web page. Quote, "IGE is fully committed to the development and implementation of virtual production to promote the transformation of the industry. IKEA virtual production, that's their division, provides comprehensive technical and production supervision services, including but not limited to, customized solutions, supplier evaluation, technical execution, process management, cost and quality control. It's almost like they're building a service-based business model that anyone can use to create their own feature productions, which reminds me a lot of Epic Games. And I've wrote about this about a year ago when Gen. V.I. came out, and I kind of said, "Look, for a lot of these Hollywood studios, their best strategy, if you're not doing premium high quality content, your best strategy is probably to become a service provider and take all your internal tools and sell them to others. Get out of the mining business and get into the picks and shovels business." Now, I think Ichi has the best of both worlds. I think they're good at premium quality content with their big membership base. And I think it has the best of both worlds. I think they're good at premium quality content with their big membership base. And I think they can sell these sort of services to others, which is a little bit how Epic Games works. They have their own games, but then they also sell a whole suite of tools to people who want to build their own video games and sell them, including distribution, marketing, content creation and so on. So that's what this looks like to me. And that gets you in theory the democratization of the long-form entertainment industry. That's let's anyone start to make high-quality movies, which is pretty spectacular. And I think that's where it's going and I think that's very bad for most Hollywood studios because the one big advantage most Hollywood studios have is economies of scale in production of content. They have their big studios and their lots and they're like, well, they don't have a lot of customer capture, but they do have sort of scale advantages in the production of content. Well, this service basically wipes that out. It lets anyone do it cheaply, quickly, without going to film school, without learning how to paint, without learning how to build sets, without learning any of that. It could be pretty brutal. I think itchy is very well set up to win on the content side and to win on the sort of picks and shovel strategy. Anyways, I think I'm right about where I want to go. Okay, yeah, I'm still struggling with this as a business. It's on my short list of businesses I want to get smarter at as ICHI 'cause I think they're really in the center of generative AI transforming the most important type of video production, which is long form, high quality storytelling, entertainment. So very cool, but I struggled to understand how this factors into the workflows, 'cause I don't really know how people make those films. I gotta visit a set or something, and just like spend a day looking at how they do all this because there's too much going it's a bit of a black box to me how they actually make a hit TV show and why Studio A can make a great TV show and Studio B can't. I don't quite understand that. Anyways that is it for today for content. I hope that's helpful. Yeah I'm fascinated by this company if you couldn't tell and if I haven't said it five times I hope that's helpful. Yeah, I'm fascinated by this company if you couldn't tell and if I haven't said it five times. Yeah, that's it for the content for today. I hope that's helpful. Fun stuff for this week. I had two fun stuff. I was kind of excited to mention this. Like my two, I like science fiction and history and. And my two favorite fiction books of all time are the Dune series, which I've read the whole series. I bet I've read it at least five times. The whole, all four or five books, whatever it is. Frank Herbert, Dune. And I've been waiting for them to make a good movie about this my whole life. And then I went to see Dune 2 a couple days ago and it was fantastic. Like, it was visually the greatest thing I've seen. And not just visually, but the soundtrack and the sound and the visual was stunning. So I was in a spectacularly good mood. I'm gonna go see it again in a couple days on the IMAX 'cause I wanna see it before it leaves the theaters. Like, spectacular. And yeah, I've been waiting my whole life for that. My other, my number two favorite fiction book of all time was "Sho-gun" by James Claville. You know, about 16, you know, the story of the first, well, it's fiction, but the story of the first, well, it's fiction, but the story of the first sort of Westerner to arrive in Japan. Well, not the first, but the important one and the Shogun series. And he lands in Japan and he sort of becomes a quasi-Samurai. And it's just a, it's kind of like Game of Thrones, where it's very like political intrigue and maneuvering, but then there's a lot of fighting as of Thrones where it's very like political intrigue and maneuvering, but then there's a lot of fighting as well. And it's all samurai. And you know, I love that book. I've read that book five times as well over the last 30 years. And then they wrote other books in that series by the same author, but they weren't the same characters. They would jump forward 200 years to Hong Kong, and I think the book was called Gaijin or something. But it was my favorite one was always Shogun. Well, that came out on a streaming service, Paramount Plus, this last week. It's very well done. It is a very high quality visual sort of, whoever made this like, you know, obviously they know Japanese culture and history and clothing, like they know all of it because it looks like unbelievably accurate in every way. And it's just great. So that's that started a couple days before. So in one week I got to see my two favorite books of all time on the screen. And like I sat down for Shogun, like I got sake I you know I chilled it I was sitting there I turned the whole sound system and the lighting system for the TV and I was ready for this all day and it was great so they have the first three episodes are out now and I don't know how many are in this series probably eight or ten coming so yeah I was super excited I wrote down I wanted to mention it this week. It was so good. Anyways two recommendations Shogun and Dune II if you haven't seen it. Okay that's it for me and I will talk to you next week. Bye bye.