Business Breakdowns
· Blake Saunders
[00:00:00] S1: Axios had their event last Thursday. I think they had 500 people attended. So there's always going to be room for really good events. There is a lot more. I don't know what happens there. It feels pretty full. There could be double the amount of events, but I don't think there's enough stuff to cover, and the way that it's being covered, I think Axios does a good job where they speed it along and they try to break news. I always make this—it's not a joke, it's an anecdote: why would I go to a conference when I can listen to the same content on a podcast and just have it sped up one-and-a-half times? Folks like Axios are doing a better job of trying to break news and making it important to be in the room. But a lot of conferences that are just purely selling content and not the connections are going to struggle because everyone has the same speakers. Especially if it's not a reporter interviewing the person, it's a very lightweight conversation that in some instances you're thinking, wait, what did they even say? That's why Kara Swisher's Code Conference was really good, because it was editorial-led. She effectively brought people she knew really well and she was willing to ask really tough questions. There's moments along the growth of technology where you can point to, oh yeah, that was that weird time where Mark Zuckerberg acted really weird. Or oh, you remember the time Kara brought Bill Gates and Steve Jobs together. She had these cultural moments. And I think it's usually when it's a journalist-led conference, not just a random person leading it. So there is room for a lot more. The problem is everyone's go-to-market from a content perspective is literally copying and pasting each other, which I don't think works.
· Matt Reustle
[00:00:00] S0: It's a fair point. Things moved away from what's happening on stage to who else is in the room. Now there feels like there's an abundant amount of, oh, just trust who else is going to be in the room without a real direction. So I think you'll just see a shaking of the weaker branches and people who can dial in either what is excellent that's happening on stage or create better connectivity to the people in the audience, because that's what a lot of people go for—is the relationships. It's quite interesting. We've touched on the SEO dynamic a few times. I'll bring up a brand like the New York Post, where my consumption of the New York Post has dropped just as a matter of Google searches. Social media posts—they just get served to me a lot less, whereas they used to show up atop and I consumed it just naturally as a result of that. I'm not going to newyorkpost.com quite frequently. Not to use them as the poster child for what's happening, but brands in a similar context: what happens there?
· Blake Saunders
[00:00:00] S1: Some of that's bounded by how Google News serves up content. Everyone's probably seen this. You see breaking news and you go to the New York Times, they have one paragraph and you're thinking, wait, why did they post this? It was all to effectively make sure that you were at the top of Google News, because Google News used to give people priority who posted first. And a lot of this is changing. They used to have an embargo where they would push people off of Google News if it was within a certain content window. So if it was the first six hours or the 12 hours, they would say, okay, we're going to let them come to your website. Now they're keeping those people on the site for even big news brands. They're struggling to maintain the organic traffic that they once had, and it's happening really fast. Some of these changes and traffic drops, people will tell me, oh well, this public company is doing fine. And I have to remind them, yeah, the numbers you're looking at, everything's historic. So when a company's reporting, it's a couple months old because it's looking backwards. The numbers I'm hearing are double-digit declines from organic traffic. There's a lot of fixed cost at publishers. Most of them are already very thin today because organic traffic is free—they didn't have to pay anything to get it. So you start to get into this world where the whole economic model of a publisher, and I think the New York Post is probably a bit more insulated from this, but anybody that's below the top 10 or 20 in a category if it's a broad category, and then a smaller number if it's more of a niche category, they're already suffering minimally. It has a dramatic impact because there's a lot of fixed costs in these businesses that they can't cut as quick, and they've already done a lot. Some of the fastest-growing publishers at a smaller or mid-size have basically completely changed their publishing model to cater to the algorithms, which sucks because most of their content is not as well-researched. But they're focused on publishing more, faster, and in a lot of cases there's not really direct reporting—it's just copying what everyone else is writing about. Yes, the decline in the New York Post is happening across the publisher landscape. New York Times is focused on a sub number. That's how they're growing their business.
· Blake Saunders, Matt Reustle
But I think more and more publishers talk about Google Zero, which is the day where they get no organic traffic. [00:00:00] S0: Is there a solution? I do believe that sometimes secular declines are too hard to overcome. But do any of the new outlets offer a cushion to slowing that decline down? Or if you were in their seats, is there anything you could do to offset that? [00:00:00] S1: No, it's kind of scary, but there's nothing to do. That's the problem when you enter this world where the platforms control who can view your content—it gets really tough. There's just going to be less media. From a strategic perspective, what you see the media companies doing is being more thoughtful about where they're talking to their consumers. They're collecting more data, they're trying to make their websites more like a destination. For the New York Times, they should try to be targeting you—if you like sports, what sports teams you like to watch, lean into the content verticals where there's probably resonance. But if you're just a generic content news website, or pick any vertical, the future is really tough unless you have direct connectivity to the users. [00:00:00] S0: I stopped getting my news from some sources. I mean, social media has overtaken the news feed so quickly that that's incredibly hard to dig out of, especially if it's not well-researched. Everything that we've talked about has a tie to what's happening in AI. But would you just wax poetic in terms of the impacts that AI are having on the market? From any angle you want to hit on, what would you say stands out?
· Blake Saunders
[00:00:00] S1: The biggest thing is people still question if it's going to have an impact and then use weird analogies to say that everything's going to be fine. Society is very fragile. The reason why we had a shutdown during COVID was not because half of the population had COVID—it was because a couple of percentage points and we had to stop the spread. So when you think about how our economy is built, the amount of people that are actually working in the US is not whatever 300 million plus people; it's a lot less. And the amount of people that actually pay taxes is less than that. AI doesn't really need to impact that many jobs, but if it impacts a couple of them, it will need to radically change how we deliver value to people that aren't working. This idea that the more free time we get, the more creative we get—it's not true. We have more free time than we've ever had. And most people are stuck on their phones and they have more anxiety, they have less friends, they have less sex, we're more overweight than we have ever been, ever. If there's one fact that someone can point to to say all this extra time and all this extra technology has made our life better, I don't see it. I made this point last week: the only way to coexist with AI in a normal way is to disconnect, not connect more. The COVID point is we underappreciate how significant the tax rates will need to increase, not just on ordinary income. I think the safe haven of capital gains—and you start to see regressive tax societies in Europe and other places where they start to come after retirement. And it's the Elon Musk tax of let's just figure out a way to tax assets that you haven't sold yet. It has to come because you're going to have to rebalance out how people make a living, which is going to be UBI. It's a weird debate that I get into with people and most of the times the other side of the debate is just it's going to be so great and stuff like that. Great in their minds, which they don't see yet: is everybody on GLP-1s, everybody on social media 24 hours a day? To me that's not good.
· Matt Reustle, Blake Saunders
[00:00:00] S0: If the AI is naturally deflationary, where it could do all the road work and it can teach in the schools, pick your various government expenses, then maybe there's some offsetting impact? [00:00:00] S1: I recently bought business class tickets to Japan and I was thinking, this is so cheap and I can just buy for a personal expense. I would normally not buy business class tickets on a 15-hour flight. Yes, the world will be completely deflationary and I think most things will be cheap. The problem is most people will be given effectively government money and the people that are creating assets and creating value will make a lot of money and basically be able to do whatever they want. Yes, everything will be cheap, but most people won't be able to buy it. [00:00:00] S0: It's very dystopian. But I hear you in terms of the reality of it.