a16z Cofounder and General Partner Marc Andreessen and Endeavor CEO Ari Emanuel are interviewed by a16z General Partner Sriram Krishnan at the “Time to Build: LA” event during LA Week. The trio chat about the future of content distribution, the bull case for VR over AR, the end of corporate brands, and why there is (or isn’t) ever anything good to watch on TV.

Hi, I'm Michelle Kang, an editor at A16Z.

And in our new podcast series, Time to Build LA, We're taking a deeper look at investing in company building in Los Angeles.

LA has long been known as a mecca for entertainment, gaming and the aerospace and defense industries.

But now it's also the third largest tech hub in the United States.

Snap, TikTok and SpaceX all have headquarters here.

Investments in the region continue to increase and scores of new founders, venture capitalists, and tech employees relocated here during the pandemic.

To celebrate the LA community and the city's growth, A16Z recently hosted Time to Build Los Angeles, an event where we invited LA-based investors, founders, and operators from across a diverse range of industries to talk about company building in LA.

In this episode, Mark Andreesen, the co-founder and a general partner at A16Z, and Ari Emmanuel, the CEO of the global sports and entertainment company Endeavor, are interviewed by A16Z general partner Shriram Krishnan about the evolution of the entertainment industry, where it's headed next, and the story of how they first met.

What follows is a recording of a live conversation.

The audio has been edited and abridged for clarity.

As a reminder, please note that the content here is for informational purposes only, should not be taken as legal business tax or investment advice or be used to evaluate any investment or security and is not directed at any investors or potential investors in any a16z fund.

For more details please see a16z.com disclosures.

So we are in LA Tech Week, and we wanted to put together something really special, which represented both everything LA and everything tech.

We have somebody who needs no introduction for creating Netscape, for Opsware, for a little firm called Andreessen Horowitz, and kind of tweets a lot.

And next up, we have somebody who's pretty much changed the world of entertainment, known as a super agent.

You may have all seen him played by Jeremy Piven on Entourage as Ari Gold, but then kind of gone on to conquer everything, from UFC to bowling.

If you go to a live event, he's probably involved in it somehow.

So without any further ado, it gives me great pleasure to welcome Mark Andreessen and Ari Emanuel.

What's the meet cute story between you 2?

How did the first, the 2 of you first meet?

Mark was on the cover of Forbes, and I actually don't remember the article, and It's what I normally do, because I have this phrase that I try and create serendipity.

I read the article, and I blind called Mark.

I was, you know, kind of thought it was incredible.

I think in the meeting, I started raising money because we had just started a merchant bank called Rain.

He said he would put in money, but he wanted to bring his 2 friends along.

Egon Durbin from Silverlake is my largest investor and that's just the serendipity of life and kind of how I create serendipity and that's how we met.

Now the number 1 rule of business is you never, ever cold call.

And the LA Tech ecosystem, the scene here in LA, What do you think?

There's been this long running basically drama story, story arc over the last 25 or 30 years.

I mean, my first meetings with the big entertainment companies were in like 1994, explaining the internet, being like, OK, this thing might be a big deal someday.

And there was this extraordinarily long period of time where there, in theory, was going to be a convergence.

Buzzword literally used to be convergence.

And it would literally be a coming together of the 2 great California industries of entertainment and culture and then tech.

And then it turned out to be war a lot of the time.

And I think it's fair to say the entertainment industry viewed new tech for a long time as a threat.

And then in theory, the tech industry at some point was going to do entertainment.

But the running joke was, we're so nerdy and stiff in Northern California, if we made a movie, it would be like the movie version of the manual for a Cisco router, not be the most compelling, exciting content in the world.

And so there was this weird shadowboxing thing where nothing ever really came together.

And then it feels like probably Netflix was the big breakthrough.

Well, I think it probably started a little bit in gaming.

And then entertainment companies that we consider entertainment movie companies thought they could take the IP and they didn't realize that was making billions of dollars and they were not that important in the movie business.

But Maybe now it will happen with what Unity's doing and Web 3.

My sense is the first company that actually did it was Netflix, if we Define that as technology.

And it was kind of a two-part thing, right?

Which is, 1 is Netflix all of a sudden is a distribution medium for video, like a new primary distribution medium.

The first new 1 probably went since DVDs, probably videotapes before that, satellite TV.

But the first 1 really out of Silicon Valley.

And then the other was, of course, Netflix then actually started making content.

It was a little show about Washington DC.

So their stock had fallen because they did the double pricing and you know.

Yeah, all the whole craziness with the DVDs and everything.

And then a company I had started called MRC had this treatment, Fincher was attached, HBO was gonna do a pilot, and Ted came and realized, okay, we gotta figure this out, and he put 13 episodes up at, I think it was

Fincher went overboard, we needed another $15 million.

And HBO could not believe that we were gonna go to Netflix and do that over the brand of HBO.

million to 150 million, it was an easy conversation.

Like Netflix just had, maybe not the greatest earnings quarter, right?

Like Mark just grumbles all the time about he's not finding anything interesting to watch or where do you see content going?

That is like the biggest lie in the world.

All I get all the time from them, have you seen this show, have you seen that show, have you seen this show?

I mean, it's like, that's a fallacy, and you know that.

Cornucopia, well, okay, is the quality holding up?

I mean, it depends on, you know, you can get content from anywhere.

How many TV shows are being filmed this year?

I think it's television shows between non-scripted and scripted, I wanna say 900.

In 2011 I want to say it was, no 2009 it was

And then you know the problem is it used to be a drama for linear television would be 2 and a half, 3000000 dollars.

So I don't know what the bones were about.

And you can't get special effects people.

There's some physical issues surrounding all that.

That's hopefully why tech and us come together.

The Mandalorian shot entirely in this Unreal Engine power thing.

We've had a Star Trek Discovery, 1 of Mark's favorite shows, shot by motion capture in the actors' homes.

Do you think, is there a democratization of movies done by indie filmmakers coming up?

So 1 is, Hollywood has had a pattern over the decades of it sort of hits a creative, I don't know, whatever, wall of some form.

And then there's a reinvention of the medium of film.

And that happened in the 1970s with the new Hollywood.

It happened again in the 1990s with the Indies

I mean, listen, there's always going to be people pushing technology and pushing what that means.

Music, to make an album now, it's almost cost you nothing before it used to cost you a lot of money.

Yeah, but then there's gonna be filmmakers that wanna do it the old way and on film.

Do I think that because of that, pricing's gonna come down?

No, because you're gonna have to put actors in it.

Writers cost now a lot of money because they're doing 3 or 4 projects.

So the economics are gonna be the economics.

Is there gonna be technology around shooting stuff maybe cheaper and that brings them?

And just to answer the other question, so in

Charlie Bluehorn, none of you know who he was.

Paramount just made this TV show, Paramount, streaming about the making of The Godfather.

He goes and says, I think it was 1974, in Variety, which is a trade paper in Hollywood.

they go, the television business is over.

And then, I would, at the time, there was 4 networks going to 5.

And I was like, how could the television business be over and they're starting 2 new distribution points?

So all I would say to you is, you and I would never pay for ads on direct to consumer.

There's gonna be more, if it's now 900, it's gonna be

Distribution's expanding, and you're gonna have to fill the pipes.

And if you just look at the numbers right now, people are going to Paramount Plus, they're watching the offer, and then when they're done watching the offer, they get rid of Paramount.

And the only way to keep them is either through sports or through new content.

And so there's just gonna be more and more content being delivered, And then they're gonna have to figure out the economics because the economics are extraordinary right now.

Okay, I'm gonna ask a question to Mark although I think Ari has a strong opinion on this.

So best movie of the summer, IMO, Top Gun Maverick, right?

This, we had Multiple MCU movies come out.

This week we have a LOTR prequel, and I believe a Game of Thrones prequel come out.

Mark, what do you think is happening, and will we ever see original IP again?

Well, so, I mean, okay, I'm gonna drive him straight through the ceiling.

There's whatever the studio system, or whatever you would call the inheritance of the studio system, and they're sort of quote unquote mainstream.

And then, of course, there's this extraordinary kind of, what's the indie scene today?

It's this complete, just this incredible long tail in this incredible creative universe.

So 1 of the hallmarks of the evolution of the entertainment industry, let's see if you agree with this, is the previous medium becomes the content for the new medium.

And so written stories become the content for stage plays.

Stage plays become the content for movies.

Movies now become the content for streaming services.

And so you bring all these old mediums along with you.

But you also get new creators doing new kinds of things.

They're making original video short-form content.

They're having a completely different kind of relationship with their audience.

And so you've got this completely parallel universe running.

And of course, there's some crossover, right?

Which is you've got some of those people that then want to sign up with you and then want to become TV or movie stars.

But you also have this whole parallel world.

So my, the George Glenn book, Life After Television, is there's gonna be more distribution than ever.

That's why we built the firm, because we get more verticals books, et cetera, social, so 1 form of distribution is social.

1 form of distribution is movies and television.

Yeah, there's just more distribution and more content because we have more and more free time and that's what people want.

And that's ultimately how we're built to make sure that, we're not perfect at it, make sure that happens.

And when somebody creates an incredible piece of content on social that can elevate up, that's hopefully what happens.

But that does not mean, based on your question, there will not be original IP.

I went through the whole period when shows out of the UK, right, the office, I put it together, we represented a star in the UK and gave it to Greg Daniels, who I represent, and we put it on the air, that happens.

But then there's just Larry David and Curb Your Enthusiasm and that's original.

Well, Curb's been on for 13 years and then so that was another 9 year and then yeah, I mean, yeah It's about 23 years ago 23 years ago.

Over whatsapp tons of original shows I'll send you the titles

Just because it's not sci-fi doesn't mean it's not original.

You're to the point now where you're making literally TV shows about 50 year old movies.

And you're making TV shows about the starting of the Lakers.

So now we're categorizing everything that way?

They're great nostalgia acts, but they're nostalgia acts.

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