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Kevin Mayer on Candle Media’s investment strategy

Kevin Mayer says the investment strategy at Candle Media, the entertainment startup he runs with Tom Staggs, is a product of his career at Disney and TikTok.

While those two companies are giants and Candle Media a relative newcomer, the claim isn’t as far-fetched as it sounds.

At Disney, Mayer was largely responsible for launching the direct-to-consumer streaming businesses that became Disney+. And as content from Disney, Pixar and other groups became exclusive and contained within a walled garden, he stoked the demand for independently made premium content. Candle Media aims to become one of those providers.

On TikTok, he learned to appreciate the power of platform-driven targeting, personalization, and scalability of business opportunities. While Candle Media is not a tech player, Mayer says the company is in the business of buying companies with well-defined audiences.

Explaining how “valuation enemies” initially poured cold water on Disney’s purchase of Pixar and Marvel, Mayer said Candle Media’s two main acquisitions were expensive but good value.

“You have to look at the potential for cash generation under your ownership,” Mayer said, speaking Wednesday in Singapore at the APOS convention. “We don’t overpay for Hello Sunshine.” The acquisition of the Reese Witherspoon-led company for $900 million in mid-2021 surprised many observers. Mayer replies that it has a well-defined audience, it is directed by women for women.

Moonbug Animation, bought for $3 billion, is based on IP that was largely born out of social media. Its main property, CoComelon, has grown to 140 million followers on YouTube and is now a hit show exclusively licensed to (walled garden) Netflix. “We pay a lot. It will be worth a lot more,” Mayer said.

These and future acquisitions, he continued, are creator-led companies where Candle Media can provide the business aspects. “In Asia we are looking for startups in film/TV, social media and commerce,” she said. Moonbug this year acquired Singapore’s One Animation. The deals tend to be a mix of cash and candle stock.

Mayer also weighed in on the future of premium VOD and moves by companies like Netflix to add ad-supported tiers. “I think it’s pretty smart,” he said, backing up his conclusion with the example of (Disney-owned Hulu. When that company added a tier that cost $6 per month less than the premium tier, it generated more than $8 per subscriber of revenue). “The economy was doable either way.”

He said companies like Peacock and HBO Max, latecomers to the streaming market, may be successful in their bid to go global. “Some consolidation will occur,” she said. “But [streaming video] not a winner take all situations [unlike music]. If you want to watch ‘The Morning Show’ you have to subscribe to Apple. If you want to watch ‘CoComelon’, you have to subscribe to Netflix. No one needs to subscribe to both Spotify and Apple Music. They have the same content with a different interface.”


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