Jeffrey Katzenberg, Co-Founder of DreamWorks Animation and board member at Aura, shares his thoughts on the Hollywood writer's and actor's strike. Marcus Shaw, CEO at AltFinance, discusses helping Students at Historically Black Colleges and Universities exploring a future in finance.
Hosts: Paul Sweeney and Jess Menton. Producer: Paul Brennan.
This is Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio. This is the conversation of the day for me, as a analyst on Wall Street covering the media industry for thirty years, cross paths with this gentleman and his companies many times. Jeffre Katzenberg. He's a co founder of DreamWorks Animation, former chairman of the Walt Disney Studi. He's now also a member of the board of ARA. He joins us via Zoom that zoom thing from Los Angeles. Jeffrey, thank you so much for joining us here. I'd love to get your talk to you a little bit about this new move for you Ara. What are the folks that are doing and why did you join the board?
Sure? So, about five years ago, my partners and I and the founder of Aura sort of saw this explosion of online crime, in particular it's on a global basis, but in particular focused on American families. One in four Americans today have actually fallen victim to some kind of online crime. It exceeded ten billion dollars in twenty twenty two. So this is a trend that is bad and only getting worse. As all of our lives get more and more you know, built into our online activities. And it's interesting because it's not that there are no solutions to it, it's that there are hundreds of them, and they're complicated and they're expensive, and it was hard to know, well, what do I actually need what would protect me and my family? And so that's the what we went out to sort of build a company to address that, to solve that and have built AURA, I think into what today is quickly becoming really the top of the line U all in one protection for families, both your children and your parents, many of which are the you know, have been the victims of scams and robots and all of these things that are you know beyond they you know, they started annoying and then they get to actually damaging.
So what are some of the products or what are some of the markets in the products that are brings that you think can be Well, here are.
The I just give you some of the features and functions that that we have. So we have identity and H credit protection, anti virus UH, we have AI UH powered call and message protection, so that we actually can sort of build this protective UH dome around round you in which we can filter anybody penetrating into you, your children, lots of things for parents to be able to put various controls and monitoring what our kids are doing, what, what where they are, what sites they're on, and we can go on to a very long list of features and functions. Uh here. Our objective is actually to be able to offer the widest uh uh uh you know, set of features and functions and knowing that different people have different needs. You know, I don't know each of you, but I promise you your profiles, your needs, your parents, whether we have kids or not. And what we want to do is just be a one stop shopping for everybody. And I would tell you when I look at today in the trends, you know, we don't none of us will get in a car today and not put a seat belt on. Ye five years from now, I don't believe any of us will be online without having AURA or some some version of that. It's just it's our vulnerabilities are extreme and only getting greater, and the liability is just not worth it anymore. And so I'm quite excited, quite as proud of the company that's been built in the work that are and my partner souj have done in building this company out. Robert Downey just recently came on board as a board member, as an investor, and you know, as a spokesperson for the company. So we're we're on a great path to build something that does good while doing good.
Jeffrey, I wanted to switch gears and get your thoughts about the writers actors strike in Hollywood and obviously when you're thinking about the proliferation when it.
Comes to it, I do want to say, I'm surprised it only took you the second question to get to that, But okay.
I mean, how do you think this will impact those jobs when it comes to the AI hype in the future of it.
Well, I again, I'm not going to try and parse out what are I think very challenging issues, but I will say there are a few things that I think all strikes have in common with one another. One they begin and two they end. Also, interestingly, if you look at strikes, whether they are lockouts or walkouts, the length of a strike does not correlate to a better out. And so you know, in this particular one, you actually have both parties are facing very very challenging problematic, and some would go as far as to say existential issues for them. So they're particularly difficult and particularly complex. In the case of the writers, the industry structurally has changed so significantly the ability to have the type of employment that they have had now for seventy five one hundred years is diminished, and you can see that it's on a path to continue to so that's really problematic. Obviously, the introduction of AI is a creative tool. It's both an asset but also I think could be a liability. From the producer studio standpoint, you have, you know, an equally challenging and complex set of structural changes that they are wrestling with. And so you know, I've tried to be objective and understanding that both parties here are looking at very very challenging circumstances, which is why it's seemingly become very difficult to get them aligned. But here's the thing I would say to you, as certain as we are in a conversation about this, in this moment, this strike will.
End, right and.
It will end. And whether it's going to end in a day or a week, or a month or four months, a year, it will end. And so the damage that is being felt on both sides of this isn't actually ultimately going to determine the outcome. So for me, I just desperately want to see both sides get back to the table and actually wrestle these things through.
And Jeffer you mentioned the big existential issue for the media in industry, and as a Wall Street analyst covering the space for thirty years, I've never seen anything like it where this industry has to pivot from the traditional model where cable companies and salite companies aggregated a big bunch of audience and then the content creators leveraged that and that's everybody kind of had a nice economic return to now one it's streaming.
But it's even more complicated than that, because what you have is is seventy five years of an ecosystem that was built on a waterfall of rights from window to window to window of various distribution platforms, both domestically and globally, and as those have consolidated, there is less opportunity to exploit the content and therefore less opportunity for talent to participate in the rewards of that yep. And so it's challenged on both sides of the equation, both for the production and studios who are making the content. They don't have as many outlets to exploit their content. And for the creators, you know, who were rewarded for their success, and they were rewarded through a very long pipeline of you know, whether it was from free TV to pay to cable, to syndication and international. There were all of these different places of exploitation of which they actually got rewards for great work.
Yeah.
I know it's been It's an incredibly difficult time, but one could argue maybe it's a good time for strikeing get all these issues out on the table. Jeffreykatzenberg, thank you so much for joining us. Jeffrey Katzenberg is a co founder of dream Works Animation, former chairman of the Walt Disney Studios, and member of the board of aur. He joins us on the phone on the Zoom actually from the City of Angels, Los Angeles. Bringing our next guest here, Marcus Shaw. He's the chief executive officer for a company called Alt Finance. He joined us live here in our Bloomberg Interactive Brokers studio. Marcus just set us the stage here. What is all Finance. What are you trying to do at All Finance?
So All Finance is an organization that's dedicated to helping encourage more students from historically black colleges and universities understand careers in finance, specifically alternative investments, and providing them with the education, experience, and exposure to help pursue careers in alternative investments, private equity, private credit, in real estate.
And you also have a fellowship program. Talk to us about that, correct.
We have an amazing fellowship program. We now have one hundred and nineteen fellows. They're currently in our program. We graduated our first fourteen fellows in May of twenty twenty three, and those fellows that are going on to work in investment banks and alternative investment firms and management consulting firms focusing on private equity. We're so excited about the success that we had with that first class, but our fellows are growing and so we expect even more success than years to go.
How is what is wall Street's view on hiring from HBCUs just in generally or minority hiring in general? You know, what are they trying to exist so competitive?
Well, it's a very competitive industry, and I think the perspective, particularly around HBCUs are that the companies really didn't know where these schools were. HBCUs have a rich history and are a big part of the fabric of this country. Obviously, our current Vice President, Kamala Harris is an HBCU alum, along with many other you know, luminaries and politics and entertainment and business and so forth. So it's been a contributing factor to the American fabric for several hundred years now a couple of hundred years, but has not been a big part of the recruiting process for finance and for Wall Street. And so what we're trying to do is create those relationships, those pathways so that the best and brightest students at places like Howard University, of Morehouse College, Spellman College, clark Atlanda University are aware of the career opportunities that exist outside of sales and trading and investment.
Bank How are the resources when it comes to things like endowments.
So one place where historically black collegees the universities have certainly struggled is having the financial resources to keep up with the infrastructure battle that is happening in higher education. The students are brilliant, the professors are incredibly resourceful, but building the endowments has been a place of a place of challenge. There is not a single HBCU today that has an end over a billion dollars. When you look at other schools right that are non HBCUs schools, even of the same size, many of them will have larger endowments. And that allows students to have a lower cost of attendance, That allows you to build scholarships, It allows you to endow professorships, which allows you to also retain professors for a longer period of time. So HBCUs are doing all of this great work without all of the resources that some of the other schools have.
So why is that so?
I think there's a couple of key issues. Number One, you're dealing with a population of student an alum that historically have served a higher population of low income students. All right, that's number one. Number two, and this is part of what we're solving for through all finance, is that there hasn't been as much awareness of some of the higher compensated career paths, like alternative investments that can lead to you know, very well rewarded and highly compensated alum that can then pour back into the school and use their networks to pour back into the school. So one of the things that we're doing is trying to show highly talented students where high paying, high rewarding career paths are and encouraging them to continue to give back to their schools in a higher level. And so I think that's part of it. I think that there's also you know, what we see naturally is the reason why HBCUs needed to exist is because we were in a segregated education system. The vestiges of that continue to exist in some ways that show up in terms of funding for the schools. And so we need more corporate funding, we need more alumni giving, we need greater fundraising so that we can continue to give the students at hpc US all the best and brightest infrastructure and opportunities that they deserve.
HBC used this is ignorance on my part. Are they private, are they public? Or are there some of each?
There's a mix. There is a mix of both. And actually it was through the Civil Rights Act of nineteen sixty four that the government designated historically black colleges and universities, and there are one hundred and four roughly one hundred and four HBCUs in the country. There's a portion of them that are public, there's a portion of them that are private, and the funding model for those can be very different, much like a non HBCU school. But generally across the board, we still see that HBCUs are underfunded, whether they're public or private.
So, as a CEO, and you started your career at IBM, you obviously got your MBA from Duke at you and Paul were talking about that earlier. What's your view and your vision when it comes to students that are in your programs and as far as what that could mean for other potential future CEOs.
I think and I'd like to also give a shout out more House College. So I was a more House alum as well, and I think that as I look at students that they are graduating from HBCUs today, I see them as having an incredible network of young men and young women that they're going to school with. And the same way that IVY leagues have an incredible network, in the same way that large state schools have an incredible network, many of these students will go on to great graduate schools, law school, medical school, business school, and they will build even broader networks that are more powerful. There's real value because we believe that there is power and diversity of networks, diversity of thought, diversity of experience. These students, ultimately in the workplace will have some of the most diverse experiences of any person in this country, and that's valuable to companies and corporations that are looking for people that are bringing new ideas, new experiences to the table so that they can develop and innovate, so that they can invest, so that they can lead.
Marcus, what's the biggest challenge that you faced just day to day here?
I think the biggest challenge that we see is getting students, number one, to understand what the opportunity set looks like for a career and alternative investments. For many of our student although they are incredibly bright and always will be destined for a great career, they don't have a lot of transparency or a lot of clarity around what a career and alternative investments will look like. And so creating that exposure and some of that co education around how to manage a career moving from banking to private equity is something that's very new to students that don't have a network of people that are already in that business or not highly exposed to that even before college. So that's one of the challenges that we face.
That is fascinating stuff. I'm glad we got to get a few minutes of your time. It's Marca Shaw. He's a chief executive officer for al Finance, joining us here in a Bloomberg and Active Broker studio. We appreciate that doing some important work increasing diversity on Wall Street, which continues to be a challenge, but a lot of good folks are doing some good work there, so we appreciate getting a few minutes of Marcus's time.