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Fiddling while Rome burns? Candle Media co-CEO Kevin Mayer asserted that Hollywood should be much more concerned about demographic shifts and changes in consumer behavior as the math doesn’t look good for the traditional TV and film business.
Mayer spoke Monday evening at the Paley Dialogue session hosted by the Paley Center for Media at the Beverly Wilshire Hotel in Beverly Hills. In the session moderated by Jenelle Riley, deputy awards and features editor for Variety, Mayer said the traditional entertainment industry needs to act with more urgency to find new ways to reach consumers. Since the dawn of the millennial generation, time spent with traditional TV shows and movies is falling by double digits every couple of decades, he asserted.
“Not only is Hollywood becoming less and less relevant and less and less time spent on it, the time is spent is less profitable,” Mayer said, citing the economics of streaming content versus linear TV of old. “So there is a very substantial secular challenge that the industry is facing. There’s been some alarm, but maybe not quite enough.”
Mayer, who spent more than 15 years as a senior executive at Disney and then briefly served as CEO of TikTok’s U.S. operations in 2020, cited the dramatic shifts in the content marketplace that have emerged since the end of the pandemic and the double strikes that crippled the industry in 2023. Candle Media was created in 2021 by Mayer and his former Disney colleague Tom Staggs on the theory that high-end independent production would become more valuable in a world increasingly dominated by verticially integrated studios and streamers — like the operation he helped build at Disney.
Mayer acknowledged that the sharp post-strikes contraction in content commissions by global giants has created some challenges for Candle. But the other foundational idea behind the company has proven to be very prescient given all the industry gyrations and the embrace by younger consumers of social-driven video platforms.
“So it’s been much harder to sell content than the streamers now than it was three years ago when we launched,” Mayer said. “So that part of our thesis was pretty incorrect. The other part of the thesis was that there would be a flywheel that would evolve. And this is something that came from my TikTok days — that if you marry social media storytelling with traditional media storytelling, film and TV, on platforms where there’s an interactivity and you can interact with your audience and gain their trust and then sell them things, then commerce would be a big thing. And that is what we call content, community and commerce. That’s a flywheel that we felt would be a really powerful one. And that is definitively true today.”
Candle’s early spree of acquisitions — including Reese Witherspoon’s Hello Sunshine and “Cocomelon” producer Moonbug Entertainment — were financed by coin from private equity giant Blackrock. Despite the shifting sands in the content marketplace, Mayer assured the crowd of industry insiders that Blackrock remains steadfast in its Candle investment.
“We have an incredibly great private equity partner, Blackstone, which is the biggest alternative investment manager in the world by quite a big margin. They are super0supportive,” Mayer says. They’ve been with us through thick and thin. And when we find great acquisitions, they’re ready to go and support us quite well.”
Mayer suggested that future acquisitions would be “on the Moonbug side,” presumably focused on digital native content with a strong social media component. Mayer and Riley spent a good deal of time talking about the importance of YouTube as a distribution platform.
“YouTube has been slogging away for 20 years, and it’s the biggest out there,” Mayer said. Most important, he added, is that YouTube shells out real money to the most popular content creators. “They pay content creators now — no one else does that. You can make money on Instagram and TikTok by going directly to a marketer and cutting a deal with them for doing an influencer marketing campaign. But the player that actually directly pays in a meaningful way its creators is YouTube.”
The conversational naturally wound its way around to AI and the impact of powerful new generative AI and machine learning tools on the craft and business of entertainment. Mayer said he absorbed enormous lessons after in four months at the helm of TikTok in the U.S.
“TikTok really derives its value due to his AI recommendation,” he said. “It really is another form of AI which just understands your preferences and can react and get your recommendations. And that’s what Tiktok engine is. This algorithm is one big AI code that detects your most nuanced usage of the app and can tell you exactly what you love in a way that even you don’t even know.”
His four-month run as CEO of TikTok USA and COO of parent company Bytedance was more turbulent than he could have imagined. It was clear after a short time that it was untenable during President Donald Trump’s first term. Four years later, however, Trump gave TikTok a stay of digital execution as he returned to the White House. He allowed the app to resume limited operations, after the Biden administration set a deadline for the app to be sold to an American-owned firm or go dark in the U.S., while stepping up efforts to find a buyer.
“I was there for a short period of time because Trump was shutting us down and issued executive orders shutting down TikTok –it was very tough to be an American executive and be the head of that company. So I stepped away from that,” he said. “I don’t know for sure what’s going on there. Seems like it has a decent chance of sticking around. But the story about TikTok is almost as interesting as using TikTok itself.”
