Of places I’d love to be a fly on the wall after "the slap" at Sunday’s Oscars, it’s at Candle Media.
Why?
Because in January, they invested $60MM for 10% of Westbrook Inc., the media company founded by Will Smith and Jada Pinkett Smith.
Candle Media's business logic, in broad brushstrokes, is making bets on both guaranteed growing production company revenues from streaming while assuming growth can be found in riskier creator economy business models (which I discussed in Three More Acquisitions from Blackstone's Candle Media (Kevin Mayer & Tom Staggs) back in January).
If production company revenues now seem less of a guaranteed bet for Will Smith after Sunday's incident, is Candle Media's bet on Westbrook still worth $60MM? Or, counterintuitively, did Sunday’s events prove the value of Candle Media's bet on riskier creator economy business models?
Candle Media has two investment hypotheses:
Content, community, and commerce: “We feel that high-quality content with high-quality creators at the right brands create great connections in social media with large audiences.”
As Candle Media Co-CEO Kevin Mayer told SXSW, "The value is rising for independent content creators as streaming platforms hunt for more content.
The first is a growth play in the creator economy, and the second creates “a stable revenue stream by simply earning fees to make shows for the streaming services” (NOTE: I wrote about the interplay of both in Why YouTube Sees Hollywood’s Future in the Creator Economy back in January).
As The Wall Street Journal noted,
Mr. Smith is one of the few actors in contemporary Hollywood who can largely control his own destiny by greenlighting projects on star power alone, and often coming on board as a producer.
The Smith family’s Westbrook Media sits almost perfectly in the Venn Diagram overlap between the two hypotheses, similar to Candle Media investment Hello Sunshine - as Blackstone’s press release about the investment highlighted a long list of existing and upcoming productions:
In just over two years, Westbrook has created a diverse and robust slate of content including feature films, scripted and unscripted television, animated series, digital series and more. On the Westbrook Studios side, projects include the critically acclaimed film KING RICHARD, based on the life of Richard Williams, father to tennis greats Serena and Venus, the six-part docuseries on Netflix, Amend: The Fight For America, which uses a groundbreaking narrative format to explore the Fourteenth Amendment through the lens of American history, posing the question, what does “united states” really mean, season 4 of the six-time Emmy nominated and SAG Award nominated series Cobra Kai, and Welcome to Earth with National Geographic which premiered on Disney+. Westbrook Media has produced and released projects with partners including Facebook, Snapchat, YouTube, and HBO Max including Snapchat’s most popular series ever – Will Smith’s Will From Home which garnered 43M+ viewers, as well as Will From Home Season 2, Ryan Doesn’t Know starring Ryan Reynolds, Jaden Smith’s social justice series The Solution Committee, Charli Vs. Dixie with social media sensations, Charli and Dixie D’Amelio, the YouTube series Best Shape of My Life with Will Smith as well as Alicia Keys docu-series, Noted, along with Hulu’s photography competition series Exposure, and the HBO Max hit Fresh Prince of Bel-Air reunion.
In addition to the projects that have already been released, upcoming high profile projects include the film EMANCIPATION, which sold to Apple TV+ in the largest film festival acquisition deal in film history, the scripted television series Bel-Air, the dramatic reboot of Will Smith’s iconic The Fresh Prince Of Bel-Air which landed a two season order from Peacock and premieres in February, a five year first-look deal with National Geographic to create adventure, exploration, travel and science content and upcoming Snapchat series Off Thee Leash with Megan Thee Stallion.
Other film projects in production and development include the drama REDD ZONE, starring Jada Pinkett Smith at Netflix and based on the true story of Tia Magee and her sons, the hip-hop musical feature SUMMERTIME based on Will Smith and DJ Jazzy Jeff’s hit song for Sony Pictures’ Screen Gems, CLEAN AIR, a joint project from Westbrook, NASCAR and the Chainsmokers, action-thriller FAST & LOOSE starring Will Smith and directed by David Leitch, and THE SOUL SUPERHERO, a live action musical fantasy film with a screenplay that is co-written by Kwame Kwei-Armah and songwriter-producer, Freddy Wexler, and based on an original story by Wexler. Upcoming television series include This Joka, a 16-episode standup comedy series premiering on Roku in March 2022; a two-season order of the docu-scripted hybrid series African Queens coming soon to Netflix,and a one-hour variety special hosted by Will Smith.
Westbrook Media have many irons in the fire, more that fall into the "high-quality content with high-quality creators" bucket than into the creator economy bucket. In today's Hollywood, they all reflect near-guaranteed revenues - the streaming projects especially - because production salaries are paid upfront.
How many of these are threatened by the rumored punishments on the table for Smith’s impromptu assault of Chris Rock, which include a one-year suspension or even expulsion from The Academy? It’s premature to say or speculate.
The worst case scenario is that they all will be negatively impacted by lower audience demand for content starring Will Smith after the Oscars. The best case scenario is that "all PR is good PR scenario", and more attention on Will Smith will lead to more viewership of theatrical and streaming releases he stars in.
So, odds are Will Smith’s behavior may impact Hollywood’s demand for his services, and therefore sometimes but not always Westbrook Media. In turn, that may mean lower growth projections and a lower multiple for Candle Media's bet on Westbrook Inc.
Hollywood-meets-creator-economy to the rescue?
The Hollywood-Meets-Creator Economy describes both YouTube creators finding faster and cheaper ways to produce legacy media–type content and Hollywood A-listers trying to embrace the YouTube influencer model.
GQ's November 2021 cover story on Will Smith dove into Smith's gradual transformation into a YouTube celebrity, and described him and Jada as “Hollywood’s most transparent and vulnerable couple”.
Red Table Talk, the Facebook show hosted by Pinkett Smith, is the closest thing the digital age has to the role Oprah Winfrey and Dr. Phil once played on broadcast television—a place for difficult, messy conversations about love, sex, drugs, and everything else, often featuring their daughter, Willow, and Jada’s mother, Adrienne Banfield-Norris. Smith himself has appeared on the show, most notably for a frank discussion with Jada about a period of non-monogamy in their marriage. “The pursuit of truth is the only way to be happy in this lifetime,” Smith told me. “And we sort of came to the agreement that authenticity was the release from the shackles of fame and public scrutiny.” When you tell the truth, the pair reasoned, you never have to fear being found out.
Red Table Talk is Emmy Award-winning, has over 11MM followers, and is considered one of the most-watched programs around the world on Facebook Watch (1.3 billion plus total views). On YouTube, Will Smith has 9.86MM subscribers and ~714MM total views, to date.
Smith’s approach to Hollywood-meets-creator-economy has been as “a Hollywood superstar making creative choices with a strategy of “humility” and authenticity”,.
Obviously, the decision to walk up on-stage in the middle of a live broadcast and slap an A-List comedy legend embodies the very antithesis of “humility” and authenticity (as does the decision to dance the night away and pretend it never happened). But, if there were ever the ideal medium for a celebrity like Will Smith to launch an authentic apology tour (and I think Jada Pinkett Smith will get roped into an apology tour, too), it’s YouTube, where the apology video is an art unto itself.
Hollywood Popular Culture vs. Creator Economy Subculture
On this point it's worth noting how one of the more fascinating facts is that Chris Rock didn’t know that Jada Pinkett Smith had been battling Alopecia Areata since 2018. His joke about her baldness was the catalyst for everything that ensued next.
She has talked about her hair loss openly with her 11.9MM followers on Instagram, and on Red Table Talks since 2018.
So why didn’t Chris Rock know? More importantly, why didn’t more viewers or the auditorium know?
There was no audible gasp of horror from the auditorium when Chris Rock made the joke. So, that suggests not many Hollywood illuminati in the audience were familiar with Smith’s condition, either.
One gets the sense that Pinkett Smith’s story was known to a very passionate community around her and Red Table Talk content, and to readers of celebrity news weeklies like People and InTouch. But, the story did not seem to have travelled further beyond that.
Candle Media’s exposure is minimal with 10% ownership. Looking back at Candle Media’s hypothesis, perhaps the guaranteed returns on productions for Hollywood productions with Will Smith will be lower. But, one can’t help but think that their bet on content, community, and commerce will be supercharged by however the Smith family chooses to pursue its apology tour on social media.
In particular, the dynamic of the passionate communities around both Will Smith and Jada Pinkett Smith are worth focusing on. Because they are what the Smiths were already banking on for the next phase of their careers, and where they are likely to take their post-Oscars apology tour.
Community is the emerging market dynamic that Candle Media is lase- focused on, and where they believe they can deliver multiples on returns with Blackstone's money. If the Smiths can figure ways out to grow their social media audiences with authentic content, build a larger community, and figure out how a commerce model, it's nothing but upside for everyone involved... regardless of Sunday's "the slap".