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'In the streaming world, local television simply doesn’t exist': CEO of MNTN

Mark Douglas, CEO of MNTN, joined Yahoo Finance Live to break down the outlook on the media industry.

Video transcript

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ADAM SHAPIRO: The world of media is constantly changing, and one of the individuals who keep their eyes on that change is the CEO of MNTN, Mark Douglas. We welcome him into the stream because it's hard to keep up with the changes that are taking place. And I had actually requested the team to bring you in because with all the evolution underway, if you have an Xbox or if you've got a gaming console, why do you need a Roku? Isn't all of that eventually just going to merge into one simple one-stop click and off you go?

MARK DOUGLAS: Yeah, absolutely. You don't need it. But what the market-- and I mean by consumers have decided so far is they want special purpose devices. So if you have, like you said, an Xbox or a Playstation, most people are using that for gaming. We see connected TV penetration on those devices is under 10%. Most consumers are instead opting to get an Apple TV, Roku, Amazon Fire Stick, or a Google Chromecast. And part of that is because they're pretty inexpensive to get. So people are getting both.

SEANA SMITH: Mark, explain to us how you think that this is kind of fueling the phenomena that we're seeing with meme stocks and, specifically, what we're seeing in GameStop. Because when you take a look at the fundamentals of the company, it doesn't make sense that we've seen so much interest, obviously, within the stock. But as you point out, a lot of retail traders can relate directly to maybe what GameStop has or what they offer, and that's why they're buying it.

MARK DOUGLAS: Yeah. So I mean, the whole meme phenomena-- you know, that whole trend has originated on social media, and in particular, Reddit. And I mean, it's almost like a stock market lottery, except you can just time your way into winning by getting into those stocks early, riding them up, and then selling at the right point. I think the thing that you're referring to is a lot of the stocks, these early stocks have gotten that treatment, they had been gaming stocks.

And I honestly-- you know, there's not a clear reason why they're gaming stocks. I think one thing is just kind of maybe a subtle slap back at Apple, which has such a huge position in the gaming market now and kind of preserving and giving these companies the brand lift from what's happening while these traders are making money, these individuals.

ADAM SHAPIRO: At the end of the day, though, it is about money, and especially advertising dollars. You know, whether it's GameStop or whether it's Sony and Xbox, the advertisers are going to determine where they're spending. What are we witnessing right now? Are they going towards more gaming platforms or are they going towards traditional consumption of media content?

MARK DOUGLAS: Yeah. So you have, for traditional-- what we think of as linear advertisers, they are migrating to connected TV. And like you said, when you migrate, you can choose. Do you want to be on a TV via these-- you know, an Apple device or a Roku device? And then they can choose to just kind of stay with linear. I think you're seeing obviously a really massive shift towards streaming, and in that shift towards these newer-- these what's referred to as OTT devices.

The gaming platforms are fine. They're still super popular. Obviously, mobile gaming is huge also. But you know, everyone is getting their cut of that market and these traders are essentially in it for the money, as well as, it seems like, for the entertainment.

ADAM SHAPIRO: You and I have talked about the fact that local television stations face a revenue disaster going forward. What about the networks that own them, the Comcasts, NBCs, or the ABCs of the world. Do they also face that disaster?

MARK DOUGLAS: Well, I think that the-- you know, in the streaming world, local television simply doesn't exist. And we have people moving to streaming at a rate of over a million households a month. That's a city the size of Phoenix per month, and it's an unrelenting move towards streaming. So that's a huge threat to local stations. And I think, long term, they're going to have trouble surviving.

In terms of folks like ABC and Comcast, the TV networks win either way. They don't care where you watch, as long as you're watching their content. Comcast, who has the pipes, I think is potentially the number one stock to short, probably for the next five years. And I don't often offer stock tips, but I don't see where they have to go in this shakeout from linear TV, cable TV to streaming.

ADAM SHAPIRO: All right. We hear you loud and clear. I just want to let you know, the team has decided you have the best background of the week. We're going to notify Room Rater. Mark Douglas, the CEO of MNTN, it's good to see you, buddy. All the best to you. Look forward to the next time you join us.