In episode six of Acquired, hosts Ben Gilbert and David Rosenthal discuss Disney's acquisition of Lucasfilm, emphasizing the strategic alignment with Disney's content-centric business model and the potential for leveraging Lucasfilm's iconic franchises like Star Wars and Indiana Jones. They explore the historical significance of Lucasfilm, founded by George Lucas in 1971, and its innovative contributions to film and technology, including ILM and Skywalker Sound. The acquisition, valued at $4.1 billion, is seen as a continuation of Disney's approach to nurturing acquired brands, akin to their handling of Pixar and Marvel, allowing them to operate with a degree of autonomy while integrating them into the larger Disney ecosystem. The hosts also touch upon the financial success of the Star Wars sequel trilogy, particularly The Force Awakens, and the implications of Disney's ability to generate new content beyond existing franchises.
"Pilot is the one team for all of your company's accounting, tax and bookkeeping needs and in fact now is the largest startup focused accounting firm in the US."
This quote summarizes Pilot's role as a comprehensive service provider for accounting needs, emphasizing its status as the largest firm of its kind in the U.S. for startups.
"Every company needs it. It needs to be done by a professional. You don't want to take any risk of anything going wrong, but at the same time, it has zero impact on your product or customers, things you do uniquely well."
This quote explains the importance of professional accounting services for companies and the rationale for outsourcing it: to minimize risk while allowing the company to focus on its unique product and customer experience.
"Welcome to episode six of acquired, the podcast, where we talk about technology acquisitions. That actually went well."
Ben Gilbert introduces the podcast and its focus on successful technology acquisitions, setting the stage for the episode's discussion.
"Just a quick administrative thing. If you like the show, we would love for you to rate us on iTunes."
Ben Gilbert requests listeners to rate the podcast on iTunes to help with visibility, highlighting the importance of audience engagement for the podcast's success.
"Lucasfilm, Star wars. What more can you say? So George Lucas obviously founded Lucasfilm 1971 in San Rafel, California."
David Rosenthal provides a brief introduction to Lucasfilm and its significance, highlighting its foundation by George Lucas and the creation of the Star Wars franchise.
"Disney announces the acquisition, $4.1 billion."
David Rosenthal states the acquisition price, indicating the significant financial commitment Disney made to purchase Lucasfilm and its associated properties.
"The distribution rights to the original Star wars movies were held by Fox and still are. So Disney was really making a big bet on the future with this acquisition."
David Rosenthal points out that Disney's acquisition was a forward-looking investment, as they did not acquire the distribution rights to the original films, which remained with Fox.
"This, to me, is a product acquisition in the near term, but it's a lot more in the kind of far reaching future."
This quote summarizes the dual nature of Disney's acquisition of Lucasfilm, indicating that while it is a product acquisition at present, it has the potential to influence Disney's business strategy significantly in the future.
"Disney has this unbelievable ecosystem where everything flows into each other."
This quote describes Disney's business model as an interconnected ecosystem, with each component supporting and enhancing the others, creating a strong and resilient business structure.
"Can Disney reacquire that muscle to build their own incredible content of all types henceforth?"
This quote raises the question of whether Disney will be able to assimilate the creative capabilities of Lucasfilm to produce high-quality content independently in the future.
"My frame on it that I was going to say is this is a product acquisition, but what the product is, is the product is the juice that flows through the Disney flywheel."
This quote frames the acquisition of Lucasfilm as a means to energize Disney's flywheel strategy, suggesting that Star Wars serves as a catalyst for the entire business system.
"I get the sense that Lucas doesn't have that trust lightly, that this wouldn't have been sold to someone that he didn't feel, know, keep it in that sort of form."
This quote suggests that George Lucas's decision to sell Lucasfilm to Disney was based on a deep level of trust and confidence in Disney's ability to respect and nurture the legacy of Lucasfilm's properties.
"At the core of investing is about identifying mispriced assets." This quote emphasizes the fundamental goal of investing, which is to recognize assets that are not accurately priced by the market.
"The worth of Lucasfilm sitting there as an independent entity was x, call it 4.1 billion, but was that mispriced relative to the opportunity that Lucasfilm had?" This quote raises the question of whether Lucasfilm's pre-acquisition valuation truly reflected its future revenue-generating potential, suggesting that Disney may have made a strategic investment by acquiring it at that price.
"We've got five films queued up before 2020." This quote highlights Disney's aggressive content rollout strategy following the acquisition of Lucasfilm.
"The Economist quotes that they imagine that 5 billion in Star wars licensed products will be sold in 2016." The quote underscores the significant additional revenue streams that Disney anticipates from merchandise sales, beyond box office receipts.
"Technology is the best amplifier of a business." This quote, attributed to Sequoia Capital, encapsulates the idea that technology can significantly enhance the capabilities and reach of a company.
"Disney didn't do a big marketing blowout budget for it." This quote is part of a discussion about Disney's marketing approach for "The Force Awakens," where the company relied heavily on social media and earned media, rather than traditional advertising, to promote the film.
"Statsig is a feature management and experimentation platform that helps product teams ship faster, automate a b testing, and see the impact every feature is having on the core business metrics." This quote describes the primary functions of Statsig, emphasizing its role in helping product teams improve their development and testing processes.
"Statsig is a great platform for rolling out and testing AI product features." The quote points to the specific utility of Statsig in deploying and evaluating AI-driven product features, which is particularly relevant given the rapid growth of AI in various applications.
"At sports center, the day before the movie came out, there was a 15 minutes segment in the middle of sports center on the athletic training behind Star wars as a gigantic star."
This quote illustrates Disney's strategic use of its own media channels to market Star Wars, showcasing the film's behind-the-scenes aspects on a major sports platform.
"The power of the flywheel both within Lucasfilm and within Disney is incredible here."
The quote emphasizes the importance of the flywheel concept, where the combined assets of Lucasfilm and Disney create a self-reinforcing cycle of success.
"That is the theme of the modern acquisition."
The quote summarizes the overarching theme of modern acquisitions where companies are acquired and allowed to operate semi-autonomously to preserve their unique value.
"What does that flywheel look like after 2025?"
This quote questions the long-term sustainability of Disney's content creation strategy and whether they can maintain their success without further acquisitions.
"Lucasfilm is a depreciating asset. It was a mispriced one that Disney correctly identified, and they're going to be able to get a ton of juice out of it by feeding it through their flywheel."
This quote reflects on Lucasfilm's value to Disney, suggesting that while it offers short-term benefits, its long-term contribution to Disney's growth may be limited compared to other acquisitions like Pixar.
"I'm going to give it an a and not an a plus, even though financially I think spectacular."
This quote conveys a positive yet cautious assessment of Disney's strategy, recognizing its financial success but also considering potential challenges ahead.
"Energy is the second largest cost of running AI, after of course, the price you pay Nvidia for the chips. And these lower energy costs get passed on to customers."
This quote explains the significance of energy costs in AI and how Crusoe's model provides a cost-effective solution by utilizing stranded energy.