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Verizon Media CEO on the future of the media industry

Verizon Media CEO Guru Gowrappan joins Yahoo Finance's All Markets Summit to discuss the pandemic's impact on the media industry.

Video Transcript


- --Gowrappan is the CEO of Verizon Media. He runs the division of Verizon, creating what's next in content, advertising, and technology, with brands including Yahoo, TechCrunch, and HuffPost. Gowrappan up in is a strong supporter of diversity and inclusion and is active in conservation, leading in supporting causes to protect the environment.

SIBILE MARCELLUS: Welcome back to Yahoo Finance's All Markets Summit. I'm Sibile Marcellus here with Guru Gowrappan, CEO of Verizon Media. Now Yahoo Finance is a division within Verizon Media. Guru, it's great to have you on.

GURU GOWRAPPAN: Sibile, it's so awesome to be here. Good to see you and thanks for having me here as well.

SIBILE MARCELLUS: And if it wasn't for the pandemic, we'd be having this interview live from our state-of-the-art TV studio in New York City. But instead, we're doing it remotely. How has the pandemic impacted Verizon Media in terms of our ability to deliver boots on the ground journalism?

GURU GOWRAPPAN: You know, Sibile, thanks for the question. First of all, I would say no industry is untouched by COVID-19. You know, media, of course-- where we are-- you think about Verizon Media is no exception. We saw human behaviors change virtually overnight and also how we worked change virtually overnight.

So when you think about Verizon Media, this has meant that the storytelling, the democratized experience as we talk about, the connections with customers had never been more important in this new world. So now I'll take back. The way I think about is let's think about the landscape and then let's think about the Verizon Media's response and return to that.

When you think about the landscape, the consumer behavior and the entertainment media, the news has changed in three major ways. One is new preferences. Two is around live events. And three is around immersive or interactivity.

And you think about new preferences, right-- one of the things that happened before COVID, we would have about north of, I think, 40% of streamers, you know, consuming online were Gen X. And then you had millennials, you know, less than 40%.

But when you think about in the new world, you have more families, older audiences, rural geographies, across the country really consuming. The change in consumption is helping us, when you think about family now consuming entertainment, education really scaling up quite a bit, fitness and utility. So those content consumptions are way, way up.

And then live events is one we talk about a lot. Again, a lot of the things we do live now in studio or, you know, getting to a sports event-- the in-person event is still not possible or advisable for most of us. And then it relates to sports. You know, we went and launched something called Watch Together on Yahoo Sports to bring family and friends closer. So that's another area we see evolution. I think example there is, you know, when you think about meta streaming opera performance. You know, Travis Scott broke his record in terms of "Fortnite" virtual concert.

So we are seeing a fundamental change in behavior on both sides-- content creators and content consumers. And that's what is leading to the third massive shift, which is around immersive, mostly around XR. I know you had Hans earlier on talking about 5G-- the shift to 5G. We're living in online now more than ever. So we need that infrastructure and experience to be able to have that omnichannel experience when you're at home.

So that's how I would say we reacted to the media experiences and the impact we've seen. And I think the same applies to what we're doing to employees in our society from mental health to helping our society on donating, you know, ad inventory for mental health organizations, launching things like Yahoo Life, again, helping people with physical, mental, and emotional well-being. So lots going on across how we are reacting to COVID.

SIBILE MARCELLUS: That's right. So as you mentioned, the media industry overall is under financial pressure from declining ad revenue. We're seeing many media companies from broadcast to print having to do cost cuts and job cuts. So how is Verizon Media navigating in these challenging times?

GURU GOWRAPPAN: You know, first of all, we've been playing offense now, at least for me when I look back, two years, and we've been focused on growth. And you take Yahoo Finance as an example or Yahoo News-- these properties and products have been growing on user consumption and also revenue. We've seen that over the entire year as well. So as a technology and media company, we have a unique advantage as we look at media landscape today and the landscape tomorrow.

So the way we are addressing it, coming back to what I was talking about 5G earlier, 5G continues to take hold. It will fundamentally shape the type of content and information that is created and how it is disseminated across and consumed. And technology will shape that consumption. In terms of our strategy, we've been investing mostly on trusted news and content-- high growth areas as well as continued innovation, like immersive and 5G. And these categories typically were leaders, either number one or number two, and that stayed that way, because, you know, the effort we put on playing offense.

And so we are really focused on creating trusted content that informs, educates, and entertains, and delivering it in the format we think best fits the content. So we are definitely addressing all the right areas to address consumer needs. As I mentioned earlier, this has led to record growth on Yahoo Finance, Yahoo News, Entertainment, and Life. You think about lifestyle overall is ranked number one, Finance network is ranked number one for us. It's a great example touching about 80 million monthly active users.

So the overall aspect is we treat ourself as a platform, not just content creators. So for consumers, we bring our own content and also great third parties come in as an aggregator. And then on B2B side when you talk about the ad industry, we are focused on streaming, which is doing really well for us. And ads, where categories like travel, of course, have declined, but the categories who take a lot of media content-- entertainment, new retail, commerce, and gaming-- a lot of these have been growing at a crazy level. So we've been focused on that to mitigate some of the ad declines we've had. So while the ad market, as you said, is impacted, we are seeing a good rebound now in some of the core verticals. And estimates are very positive as we head into rest of Q4 and 2021.

SIBILE MARCELLUS: And aside from being a major headwind for the media industry's finances, the pandemic is also one of the biggest stories of our lifetime. But it's not the only one. The killing of George Floyd brought racial injustice back into the spotlight this summer. How is Verizon Media supporting the social justice movement? And what is the role of corporate America in all this?

GURU GOWRAPPAN: A great question, Sibile. And I think this is one everyone has to be focused on. And the way I think about it is to move forward, we must do this together. The issues we are facing today didn't happen overnight. But in some ways, they were, indeed, illuminated overnight. When it comes to race, the pandemic also has disproportionately affected communities of color. Meanwhile, we are grappling with the issues, as you mentioned, of racial and social injustice.

So a week after George Floyd's death, anxiety and depression among African-Americans shot to highest rates ever when you think about the impact this had. So that leads to the way we think about Verizon, Verizon media, our commitment to diversity, justice, and inclusion is deep and long lasting. We've taken substantial steps throughout my tenure here to reinforce that commitment. That being said, there is a lot more we have to do.

So I'll talk about the actions. For me, if you want to change the world, I think the quote we always heard of many times is, if you want to change the world, you start with yourself. That is what we are doing at Verizon Media. We're looking at our processes and procedures and finding ways to be better. We created this roadmap called the racial justice plan. It starts with employees.

So hiring-- we're focused on amplifying diversity and black talent in the hiring pipeline by reimagining the process we use to identify great talent. Early results are showing a pipeline three times as diverse as previous pipelines. So early hiring trends are also looking good what we're seeing. Second is around retaining-- creating opportunities for diverse talent in multiple ways, including building our diversity and inclusion plan for employees, giving them toolkits.

We launched diversity, equity, and inclusion 101 mandatory training for employees. We launched career development plan for diverse employees to identify career growth opportunities and help them advance on that journey. Verizon Media, we always think about our stakeholders across full, right? You have employees, customers, society, and shareholders. So the lot of work started with inside with our employees, then we focus on customers, society, and shareholders.

So in that end, when you think about customers and society, racial justice, again, has been top of mind for us in our content across the ecosystem, our editorial teams. We added a whole Black Lives Matter page to Yahoo.com to ensure that our sources are diverse and can provide that diverse perspective and for our reporting as well as continue our original coverage on when George Floyd's murder happened to many others-- so covering that, including national protests, really taking care of that.

And then the other pieces we did on society was supporting Black-owned small businesses where we donated $5 million in ad inventory for marketing and awareness. We committed $10 million in aid organizations dedicated to equality and social justice. So that's how we addressed employees, society, customers, and shareholders when it comes to racial justice plan.

SIBILE MARCELLUS: And we're about a week away from Election Day. Many, including both President Trump and vice president Joe Biden, believe it's the most important election of our lifetime. How is Verizon Media covering the presidential race?

GURU GOWRAPPAN: It is, indeed, the most important for our lifetime. I think bottom line, our goal is to provide our consumers with everything they need to cast an informed vote. And that's what we do. We touch about 85% of internet consumers in the US. As this year's has marked a time of incredible change, as we all know, reflection across our country and our mission to provide our audience with trusted and accurate content has become even more important than ever.

So the way we're reacting, we've created Yahoo Election Hub. The hub allows users to track major events, stream live events, clarify candidates' stances on important issues, immerse themselves into topics, you know, and engage public opinion through polling data-- we came out of the polling data just today-- and informing audiences on voting processes for their hometown leading up to the election.

Verizon Media will continue to use the power of our ecosystem to drive voter registration, of course, and then provide also accurate information about this process. And we are prepared fully focused on ensuring the safety and integrity of the election through coordinated efforts across our organization. So a lot of work ahead of us-- I mean, we are only a few days away. But our editorial teams will be very cautious in calling any results. We are, of course, working with "AP" to also coordinate calls for the election as well-- so a lot of good work going in progress.

SIBILE MARCELLUS: Definitely. It'll be very exciting to see the results come in on Election Day. Now, with a phrase like "fake news" used so often by President Trump, how do we restore trust in the media?

GURU GOWRAPPAN: You know, I would say when you think about trust, for us, you know, one of the biggest things we have done is we got out of user-generated content. So if you look back to Verizon Media's core strategy, we said one of our pillars is trusted content. What that meant is when you have user-generated content, it automatically doesn't lead you to verify it easily. So for us to bring that, A, a lot of media companies have to work together to have common processes and policies to verify a lot of sources.

We do that when we have political ads that come into our ecosystem or any content that comes in. Number two, who are the sources you work with? If we think about our own journalism, Yahoo Finance to Yahoo News, to all these properties, we focus a lot on getting the right source and doing the right homework and having all the validation points and not going back in user-generated content. So I think you have to first start with the right inputs, which is making sure company's strategies are clear.

And it's not about getting clicks, but actually about building that trust by giving the right information for consumers. The second part of that input is having the right policies and procedures. And that's what we've been focused on it. And then, three, look, you are going to always have consumers-- many times, there is a point of view, they may not like news, but there is a point of view that they want to think that the news should be a different way. You can't change that, right? I think the user behavior is going to continue to happen.

Our job is going to be always to come out with as balanced view and share different sources. The other example I would use is Yahoo News 360. We give you the left and the right and let the consumer choose which ones they want to read and what they want to consume. So a lot of that comes down to building the right input processes, having the right sources, having processes, policies, and then getting feedback from consumers on what's working, what's not working. And UGC for sure is not the right path for that.

SIBILE MARCELLUS: And let's not forget about big tech. What has been their role during the pandemic-- friend or foe of the American people?

GURU GOWRAPPAN: You know, I would-- I think in many ways, big tech, including us-- I would put-- I mean, of course, we talk about Amazon, Google, Facebook, and others-- in many ways, they've helped with getting the news out there, getting people to play the friend role, and getting to consumers. But at the same time, when I think about small and medium businesses in that sector, a lot of them have been impacted because the power of big tech also impacts negatively many times some of these businesses. So I would say they play both roles.

SIBILE MARCELLUS: That's for sure. Well, we'll have to leave it there. Verizon Media CEO, Guru Gowrappan, thanks so much.