The Circuit: Dispatch from Vanity Fair’s New Establishment Summit
Vanity Fair’s New Establishment Summit brings together the people who are setting the global agenda and leading innovation into the next decade, those who are flourishing where technology, media, entertainment and politics collide — a particularly sweet spot for us at MediaLink. This year, the Summit’s third, the discourse coalesced around the close ties between entertainment and technology, the value of gathering diverse people around the boardroom table and timing the execution of ideas to the right moment.
This issue of The Circuit marks our third collaboration with Brad Grossman’s Zeitguide, a partnership critical to distilling the essence and insights from these industry tent-poles, helping bring you the understanding of the trends and ideas moving the business today.
The next issue will be brought to you from CES and then the Hive in San Francisco, both of which MediaLink is proud to participate in. But for now — read, share, learn and let us know what you think.
Michael E. Kassan
Chairman & CEO, MediaLink
Who is the New Establishment?
The latest issue of Vanity Fair divulged who the players in the New Establishment are: the innovators, titans, moguls and game-changers influencing our culture.
The New Establishment Summit 2016, on the other hand, explored what the New Establishment is; the way we live now, how the world operates, the pace at which it is all evolving, and what that means for health care, transportation, art, media, finance, politics and philanthropy.
Across the sectors and more than 50 speakers, five themes emerged that connected the dots for us.
AWAITING THE THIRD WAVE
We may be in a place of “technological stagnation,” said Vanity Fair special correspondent Nick Bilton, “I used to wait overnight for the new iPhone — now I don’t care.”
Steve Case, Chairman of Revolution, suggested that we may have to settle for being underwhelmed for a little longer yet. We are more than five years out from what he called “third wave technology,” when things will really change again. The first wave got everyone connected to the internet; the second built software and apps on top of that. So what’s next? The third wave will integrate the internet “in seamless and pervasive ways, sometimes even invisible ways, throughout our lives,” he said.
This next leap forward could transform industries where we’ve long struggled to create meaningful change: healthcare, education, transportation, energy, agriculture and financial services. Or in Case’s words, “Parts of the economy that have changed a little bit in the first wave and the second wave, but not a lot.”
The third wave, though, Case cautioned, isn’t about moving fast and breaking things. Instead, it will demand strategic partnerships (“You can’t go it alone”), a focus on policy (“These are regulated industries”), and perseverance.
Consumers could play a more integral role, too. “They have the ability to anoint really disruptive things that are better,” like they did with the iPhone and social media, said venture capitalist Chamath Palihapitiya. “If we all had the chance to pick those winners in education or healthcare or climate change, we would want to do it…It’s frustrating that the airwaves are soaked up with stuff that isn’t that stuff.”
CONTENT? DISTRIBUTION? NO, IT’S THE FANS THAT ARE KING
The conversation about content creation vs. distribution was percolating at the conference.
The idea that “Content is king,” first articulated by Viacom and CBS chairman Sumner Redstone, has held sway for decades. Now, however, the glut of content (and ease of creating more) has devalued that crown. Current industry leaders think of distribution as the new royalty.
Peter Chernin, thinks that’s a phony distinction. “Pipes have always had content and content has always had pipes,” Chernin said. “What we’re seeing today is an evolution to the next generation of delivery platforms.”
What is truly of value then? Your loyal subjects, says Chernin: “Have hardcore fans and figure out ways to monetize them at different levels through different media.”
This idea was mined further during a panel with Conan O’Brien and Kevin Reilly, president of TBS/TNT. O’Brien said fans and social media gave his career its second act. After leaving NBC, he started distributing video directly via Twitter to an audience; within 24 hours he had 300,000 followers — and his most ardent fans were 18-year-olds. This groundswell of love on Twitter resulted in a sold-out, 30-city tour and gave him evidence that he could find an audience for a new late-night show on TBS.
What did Reilly learn from this?
“Those pockets of fandom have real value,” Reilly said. “The level of fandom we have that we’ve taken for granted is an enormous equity that we haven’t mined.” That’s where the media business is headed, he added: creating new brands and mini-businesses to take advantage of fan-magnets.
Witness, for instance, Sarah Jessica Parker, another guest at the New Establishment Summit. Leveraging her huge fan base from “Sex in the City,” she’s launched lines of fashion, fragrances, shoes and is now about to launch a book imprint with Hogarth Publishing.
THE CHINA CONUNDRUM
For months, Donald Trump has been railing about bad deals with China. At the New Establishment conference, it was clear feelings about Chinese business and consumers were more complex than that.
Investors seemed a bit bearish. Panelists James Chanos, founder of Kynikos Associates, and Kyle Bass, principal at Hayman Capital Management, see property bubble fueled by speculative investments just waiting to pop. As Chanos said, “It’s the People’s Republic of Madoff.”
Alibaba Group President Michael Evans believes the Chinese government has its financial sector under control. (Chanos, on the other hand, thinks its misguided to trust that Chinese government can prevent a collapse.) Still, it’s a tough market for American companies. Evans says incumbents have a competitive advantage because they understand the Chinese consumer, although he added that consumer products from outside have done well in China for decades.
Others think it’s nearly impossible to truly crack the Chinese market. One New Establishment member told ZEITGUIDE founder and CEO Brad Grossman, “No American business can succeed in China.” Even Amazon CEO Jeff Bezos admits that they are lagging behind competitors in China since it requires an entirely “new playbook.”
Uber CEO and co-founder Travis Kalanick battled hard to win in China, but eventually sold Uber China to its ride-hailing competitor Didi Chuxin. “When you go to China, you have to rethink how you’re doing everything,” he said. “You have to become Chinese. And if you’re not willing to become Chinese, and you think you know how to do something best, you’re going to get your ass handed to you. You have to be humble and assume everything is different until proven otherwise.”
THE 5 P’s TO SUCCESS: PEOPLE, PASSION, PROCESS, PERFECTION & PROMISE
The entire summit was punctuated by inspiring stories of personal and professional success. But the “Inside the House of Disney” panel showed how a 93-year-old company keeps its edge: talent.
In an industry where so many acquisitions result in failure, Disney CEO Bob Iger has created collective partnerships with Lucasfilm, Marvel and Pixar that have brought his studio 29 films that have each averaged $800 million dollars at the box office.
The reason, says Iger? “It’s the talent.” In other words, the people.
During the panel, “Finding the Next Billion Dollar Idea,” GE Vice Chair Beth Comstock echoed the value of hiring people whose natural obsessions can flourish in your industry. “That’s magic when you get those people.” However, the faces behind this magic will need to become more diverse if our future is to be everything we need it to be. “You have to set the standards and work hard enough to hire different people from you,” Comstock advised. And there’s no excuse if you can’t find them. “Flood the zone” with women and diverse candidates and “keep looking until you find them.”
John Lasseter — the Pixar co-founder — took it a step further. His people have passion. “Everyone working for us knows they were put on this Earth to make animated films — that’s all they want to do.”
Kathy Kennedy, president of Lucasfilm, said that while “people and passion drives” what they do, it’s good process that keeps them creating great work as the entertainment industry shifts.
Marvel CEO Kevin Feige agreed with Iger that success also entails a “relentless pursuit of perfection.” He continued, “We don’t give up until they pull the movie from our hands and put it in the theaters.”
Finally, Iger concluded that Disney’s success also stems from meeting their brand promise to all their audiences.
A MATTER OF TIMING
“A bad idea from one time may be a good idea later.”
Those words, from revered tech analyst and venture capitalist Mary Meeker, reflected perhaps the overarching theme of the entire event. Success requires not just talent and passion, but timing.
“Online groceries at stage one was not too good, but now there are some really cool companies,” she noted as just one example. She never expected meditation apps like Headspace to get so much traction, either.
As we speed toward the third wave of the tech revolution, the “right time” for new projects might be hard to figure out. Some great ideas will work, and as Meeker admits that there will be a massive number of failures and thus psychological scarring.
Persistence is the new name of the game. So if your transformational idea isn’t catching on overnight, the point is that it’s moment could still come.
The question then becomes: Will you be ready when it does?