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Is J.J. Abrams worth $500m?

Moving the Market: WarnerMedia chief John Stankey is closing in on a $500 million, multiyear megadeal with star filmmaker J.J. Abrams, beating out Apple and NBCUniversal in a sweepstakes that would set a new bar for the Hollywood streaming wars, sources familiar with the talks confirm.

• The deal, first reported by THR's Lesley Goldberg, will give AT&T's media unit first-look rights to all content created by Bad Robot, the production company run by Abrams and his wife, Katie McGrath.

• That will include the full slate of WarnerMedia platforms from movies and television shows to digital content, video games and consumer products.

The big picture: The rise of streaming services has heightened the demand for premium content, which has led media companies to spend record sums on exclusive deals with star producers.

• That includes WarnerMedia's recent $300-$400 million deal with Greg Berlanti and Netflix's recent $300 million deal with Ryan Murphy.

• Perspective, via NYT: When Abrams negotiated his last multiyear movie deal with Paramount, it was only worth around $65 million.

The big question: Is Abrams worth $500 million? In a vacuum, no. But as one television executive told me last night, "you have to factor in the 'how can one compete with Disney/Netflix' premium."

• Great premium content is the price of admission to Hollywood's streaming wars. For Stankey, there's no surer way to signal that WarnerMedia will be a home for that than by hiring a hitmaker.

• The Abrams hit list at Bad Robot includes multiple "Star Wars," "Star Trek" and "Mission: Impossible" titles, as well as television hits like "Alias," "Lost" and "Westworld."

• Abrams' content is also likely to open other revenue opportunities for WarnerMedia in video games and consumer products, two areas where neither Apple or Netflix are positioned to compete.

All that said, the Abrams bet is still comparable to Cold War defense spending. It's not a guarantee of success so much as a signal to the world and to rivals that WarnerMedia's got firepower.

• Bonus: WarnerMedia Entertainment chief Bob Greenblatt and Big Little Lies star Laura Dern will join Vanity Fair's Radhika Jones here in Cannes for a conversation on making "influential and prestigious content" at scale.

Palace intrigue, via THR: McGrath, Bad Robot’s co-chief executive and a founding member of Time's Up, had "conveyed to Stankey in no uncertain terms that Warner Bros. CEO Kevin Tsujihara's continued presence was a 'values' issue as she and Abrams explored their company's options."

• Tsujihara stepped down in March after texts revealed that he'd attempted to land roles for Charlotte Kirk, the actress with whom he was having an affair.

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Streaming changes ad game

Talk of la Croisette: One of the obsessions at this year's Cannes Lions festival is the rise of targeted television advertising on ad-supported streaming platforms and connected devices, a potentially seismic shift that could change how ads are created, sold and bought.

• The big picture, via WSJ's Alexandra Bruell: "Companies are shifting more of their budgets from traditional TV to... streaming platforms... where they can craft marketing campaigns aimed at very precise demographics."

• The big challenge: The proliferation of services and the fragmentation of audiences are "making it difficult to figure out where to place ads and how to plan an overall marketing strategy."

What's next: The rise of streaming services is also going to usher in a sea change in how media companies, brands and advertisers measure viewer data and the impact of ad campaigns.

• For those in Cannes, I'll be moderating a panel on this very issue with folks from Innovid, IAB, true[X] and Omnicom tomorrow at 2 p.m. CEST at Le Rooftop on la Croisette.

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Cool thing in Cannes: Los Angeles-based artist Alex Israel has a fun augmented reality exhibit at the Snap space at La Malmaison, which uses Snap's Lens Studio to unlock self-portraits that take you inside his mind.

• It's a refreshingly creative experience for a "Festival of Creativity" that is oversaturated with rather uncreative brand experiences.

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Susan Wojcicki's 'kids' issue

Big in the Bay: YouTube has come under renewed pressure to screen the content after Bloomberg's Mark Bergen and Lucas Shaw revealed that most kids who use the service are still vulnerable to harmful content.

• "Some 97 percent of children have used YouTube," either the main version or the safer YouTube Kids app, according Insight Strategy Group. "Children from five to twelve reported spending more time on YouTube than anywhere else, including Fortnite and Instagram."

• "Children who do watch YouTube Kids tend to shift over to YouTube’s main site before they hit thirteen, according to multiple people at YouTube familiar with the internal data. One person who works on the app said the departures typically happen around age seven."

• "Several of the most popular channels on the main site... specialize in programming designed for young kids, but that doesn’t mean they are free of advertising or screened for safety."

The big picture: "Solving the kids problem is at the top of a growing list of headaches for the world’s largest video site. ... YouTube has spent years chasing engagement on its service and ignored internal calls to address toxic videos."

• "Yet YouTube is under limited pressure to change its ways. While YouTube is facing competition for younger viewers from Disney and Netflix, it isn’t at risk of losing the audience."

Market Links

• Patrick Drahi takes Sotheby's private in $2.7 billion deal (WSJ)

• John Legere moves closer to T-Mobile and Sprint merger (CNN)

• Makan Delrahim settles antitrust charges with CBS, Cox (WSJ)

• Jonah Peretti faces news pressure from BuzzFeed union (Vox)

• Ross Levinsohn will manage Sports Illustrated for Maven (LAT)

Stephen Chernin/Getty

Gloria Vanderbilt dies at 95

End of an era: "Gloria Vanderbilt, the fashion designer, artist, actress, philanthropist, and glamorous socialite who lived much of her life in New York City, has died at 95," Vogue's Christian Allaire writes. "The news was confirmed by her son... Anderson Cooper."

• Cooper: "Gloria Vanderbilt was an extraordinary woman, who loved life and lived it on her own terms. She was a painter, a writer, and designer but also a remarkable mother, wife, and friend. She was 95 years old, but ask anyone close to her, and they’d tell you: She was the youngest person they knew — the coolest and most modern."

Calvin Klein

Miquela Sousa wins a following

Brave new world: NYT's Tiffany Hsu reports on the "growing cadre" of computer-generated social media marketers like Miquela Sousa, who are "known as virtual influencers."

• "Lil Miquela... has 1.6 million Instagram followers.... Each month, more than 80,000 people stream [her] songs on Spotify."

• "She has worked with... Prada, given interviews from Coachella and flaunted a tattoo designed by an artist who inked Miley Cyrus."

• "Until last year... many of her fans assumed she was a flesh-and-blood 19-year-old. But Lil Miquela is made of pixels, and she was designed to attract follows and likes."

The big picture: "Why hire a celebrity, a supermodel or even a social media influencer to market your product when you can create the ideal brand ambassador from scratch?"

💸 What next: Slack chief Steward Butterfield will take his company public on Thursday. The Information's Alfred Lee says the rare direct listing, "in which no new shares are sold, will test investors’ confidence."

See you tomorrow.