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Why Nielsen CEO is excited about the metaverse

Nielsen CEO David Kenny joins Yahoo Finance editor-at-large Brian Sozzi to discuss key takeaways from the Davos World Economic Forum, streaming wars, and the future of Nielsen.

Video Transcript

BRIAN SOZZI: Joining me now is Nielsen CEO, David Kenny. David, good to see you. I've been seeing you walking the halls pretty much the whole week.

KENNY DAVID: I've been quite busy, Brian. Lots of good meetings.

BRIAN SOZZI: Oh, that's great to hear. So what have been some of your top takeaways as the World Economic Forum winds down?

KENNY DAVID: I would say I've been encouraged by how the world comes together at a number of sessions on Ukraine, a number of fellow CEOs all pledging as we are to bring more jobs there to help make sure they win economically, as well as physically, and the way companies can come together and countries come together was huge. Lots of excitement about the Metaverse, which in the media world I'm quite excited about what that means for us and our clients. And some real progress on cybersecurity. More to be done, but I was encouraged by what I saw.

BRIAN SOZZI: I was going to ask you a couple of other things, but let's stay on the Metaverse because that's a fun topic. How is that going to impact Nielsen?

KENNY DAVID: Well what Nielsen measures is time. We measure 24 hours a day for 7.9 billion people on Earth, where do they spend their time? A lot of that's with media. And some of that's going to go into the Metaverse, which is going to be a far more immersive media context for us. So we're pretty excited about what people will be able to experience there. And our business is both the measurement side of it and the Gracenote side, which helps people find experiences, is going to continue to grow as we build Metaverse versions of Nielsen.

BRIAN SOZZI: Is it going to be a big thing? I still can't touch the Metaverse. Am I going to be in the Metaverse? Are we in the Metaverse now? It's hard to understand.

KENNY DAVID: Listen there's a couple of parts to it that I think we're already seeing that will grow. First is the Web3 underlined part of that and the fact that blockchain is going to allow things to be far more distributed. We're seeing that already in the way people trust each other, the way people buy from each other, the way cryptocurrencies work. So I think we're going to continue to see a lot of identification and connections between people in what they subscribe to and with each other from that platform. And then the way they experience it. I don't know how many hours a day people will wear virtual reality glasses, but some, and they will find it a very different way to experience entertainment, to go to concerts and movies, and even to work.

BRIAN SOZZI: They need to make those glasses lighter, but talk to us--

KENNY DAVID: They're working on that.

BRIAN SOZZI: That's good to hear, it's good to hear. Talk to us about the streaming movement. It has been I think a challenging two quarters for the likes of Netflix, Roku you name it. And I think all these companies from an investor standpoint thought it can only be up. But some form of bubble has popped here.

KENNY DAVID: Well, from Nielsen we've seen this for some time because while there's a lot of growth platforms, the reality is human beings are a pretty fixed number 7.9 billion, some countries are growing a little over 1%, Western Europe, the United States you know 0.2%. Some countries are actually declining in population. So it's fixed. And then the other direction, all that technology did not invent one minute of time people. Still only have 24 hours. They have to sleep. They have to work.

BRIAN SOZZI: They're working on the wrong things.

KENNY DAVID: So media state kind of level at about 9 and 1/2 hours a day. So that's what we do, we measure market share. And so there was just a limit to how much share something new could grow because the old stuff is there as well. So there is still a shift. Streaming is still a better form factor for people in entertainment. They find things on their own schedule. They sell programs. So I think streaming is still a really important factor, but there's a lot of companies who have now brought their content to streaming. So it's just more competitive.

BRIAN SOZZI: Is it too much content on these platforms?

KENNY DAVID: The consumer thinks so. When we talk to audiences, they're overwhelmed. They can't find it, people don't remember what platforms have which content.

BRIAN SOZZI: Can't keep up. The worst is going into the morning meeting at your job and somebody talking about a new show on Netflix, and I've never heard of it. Never heard of it before, don't even know where to find it.

KENNY DAVID: Yeah so we try to help with Gracenote. We have a library of all this content, which is how you discover things. So we're trying to build better ways to help people find it and to work across platforms. But I think there's also an affordability issue. The consumer is facing inflation, they are watching their wallet. 70% of households only spend about-- limit's about $30 a month on streaming, so that limits you to a couple of services.

BRIAN SOZZI: Well if Netflix goes at $50, I'm canceling it. Lastly, there's been a lot of news around Nielsen to say the very least, you're about to become a private company. Talk to us about this deal and what is the vision there.

KENNY DAVID: The vision hasn't changed for Nielsen. Nielsen's focus on powering a better media future for all people, we cleaned up our portfolio, we're very focused on audience measurement analytics and content management. So the issue is what's the best way to do that. It is going to be a transition from a linear centric business adding streaming to a streaming first business still accounting for linear. Doing that as a private company with backers who really understand us and believe in us is going to just make us be able to move faster, make faster decisions, invest in the things we need to invest in, align all of our incentives, and power through this transition. So I'm super excited about this next phase and I'm really grateful to Evergreen and Brookfield for backing us.

BRIAN SOZZI: Do you envision selling off certain assets and putting those proceeds back into your core business?

KENNY DAVID: So we already did that. The businesses we sold since I've been here were about half our revenue, 3/4 of our employees, and our cash flow went up. So things that were important businesses have already been sold to other companies that are doing well with those so that we could focus. And I think what Evergreen and Brookfield saw was it was a great place to invest now that we had already rationalized the portfolio.

BRIAN SOZZI: All right, we'll leave it there. Nielsen CEO, David Kenny. Enjoy the rest of the winding down World Economic Forum. We'll talk to you soon.

KENNY DAVID: Glad to be here, Brian Thanks.