After a long career in television including as chairman of the Fox Television Entertainment Group, TV executive Sandy Grushow has taken a stealth leap into the new digital economy. He spent two years as the chief creative officer of MediaLink and two years ago started his own company, Phase 2 Media, exploring innovative business ideas in Silicon Beach. He got grilled on his new venture by TheWrap’s Sharon Waxman.
SW: You started this company two years ago, why?
SG: After I left Fox, it quickly became clear to me that I had gone as far as I could go in the traditional television business. That the media world was changing rapidly and dramatically. And that my timing was very fortunate in that I had the opportunity to take part in the digital revolution.
The challenge was figuring out the best way to learn about the space. I quickly realized that I couldn’t get my digital PhD by reading the Hollywood trade papers in the Polo Lounge. There was only one realistic path, and that was to roll up my sleeves, dive in and get dirty. That’s what I’ve been doing for the past few years.
Explain what you mean by roll up your sleeves and get dirty.
I became fascinated with the world of startups and early stage companies by spending a lot of time down at accelerators on Silicon Beach in Santa Monica. Launchpad LA, the Amplify, the Mucker labs. And it was really there that that it struck me that there was a great need to connect what was happening west of the 405 to what was happening east of the 405.
I love that distinction. We talk a lot about the divide southern California, but you’re saying that divide exists within Los Angeles?
Correct. I felt it was low-hanging fruit. One of the first entrepreneurs I met was a dynamic woman named Tracy DiNunzio who was starting an ecommerce platform called Tradesy, for women to buy and sell clothes out of their closets.
Her biggest challenge was customer acquisition costs. The first thing that struck me was the possibility of creating a cable television show, and we’re now working on a format with Core Media Group, which if we’re successful in selling to a network, will give Tracy the opportunity to integrate her platform into the show.
Another example is a company named Two Bit Circus. These guys have set out to reimagine out- of-home entertainment using the technology that’s available, starting with a conventional carnival. Starting this month in downtown LA, they’re launching the Steam Carnival, which takes traditional amusements at a carnival and hits them with laser and fire, and makes them relevant for the younger consumer.
Once I met them, it occurred to me that they had a television series in them. They’re whimsical inventors. They refer to themselves as a Merry Band of Nerds. The founder and CEO is Brent Bushnell, his father is Nolan Bushnell who founded Atari and also Chuck e Cheese. So Brent obviously had invention in his DNA. I introduced them to Craig Piligian at Pilgrim Entertainment, who has some 40-some odd shows on the air. We cooked up a format, and we’re currently in deep discussions with multiple cable networks.
Why is this divide we’re talking about, even within Los Angeles?
When we talk about east of the 405 and west of the 405. I felt there are opportunities to leverage television in the interest of building digital businesses. That’s a huge advantage that start-ups and early stage companies have here in southern California over those in northern California. We have an obligation to try to be as helpful as possible.
Why aren’t others doing what you’re doing? What is that disconnect about?
You really need to establish credibility for yourself in both worlds. The only way to establish cred west of the 405 is to spend a significant amount of time and energy helping and learning.
You started advising these companies?
I started out by mentoring. Trying to be helpful. In all humility, I was offering the experience of someone who had run companies, and who knew traditional media industry. Mentoring quickly turned to advising, being offered lots of board seats. A good piece of advice I got was: First get busy, then get picky. Over time you get to know folks down there. The MCNs (multi-channel networks) were born down there. A lot of these people come from purely tech backgrounds, and they start businesses because the barrier to entry is so low, without a real knowledge of how to build a business.
Now I advise close to two dozen of these companies. And we’re doing a lot of stuff in the over the top space.
On the one hand, Drama Fever is an over the top content company, it licenses Korean dramas, and was acquired by Soft Bank. I was a strategic adviser – that was a good day for me. On the other side of the ledger, I sold along with Wellesely Wild (Ted, Family Guy) a show to Fox Broadcast company, The Weatherman.
This is an example of my life: The CEO of Mobcaster (a crowdfunding company) got in touch with me, he asked if I would look at this pilot that these two Australian kids had posted on Mobcaster in an effort to raise $73,000 so they could shoot six more episodes.
I said to the CEO, ‘You realize that $73,000 is craft services money.’ I went back to my hotel room, watched it, thought it was hilarious, I was blown away. I called them and ask what they wanted to do. They said, “We want to leave this provincial country of ours and come to Hollywood to make sitcoms.” I hung up on the phone, and on a lark, and sent (20th Century Fox Television co-Chairman) Dana Walden an email asking if she would do me the favor and watch The Weatherman. Frankly I didn’t imagine I’d hear back from her. Within an hour I got an email saying, ‘This is really funny.” I’m sending it to Johnny – Jonathan Davis (president of creative affairs at Fox). He got back to me and said, ‘I love this, I want to buy this.’
It was one of most gratifying calls I’ve ever made in my career. I called Australia and said, ‘Twentieth Century Fox television wants to buy your show and adapt it for television.’