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We're back. Alex is back from conferences or demos. What are we doing? I had investor events that I had to attend. Got to butter up the money, people. Troy, we're doing a public appearance together later. I can't wait for that. Closing keynote. It's going to be exciting. Going to Hudson Yards. It's Hudson Yards, right? I don't know. I'm looking forward to you telling me where to go and when. Yes. Come on, brother.

Welcome to People vs. Algorithms, a show about connecting dots in technology, media, and culture. Alex, I noticed, is wearing those glasses that you can record with. Is that right, Alex? Yeah, I've been doing the experiment of seeing how long it takes for people to notice. It took my wife three hours to notice I was wearing them, and then she said, ugh.

Wait, which glasses? They're not the meta. They're the meta Ray-Ban smart glasses. Oh, they are? Those are smart glasses? Yeah, they look pretty good. But I mean, they don't have anything showing up on screen. It's just what's very nice is that you have a speaker over your ear so you don't have to put stuff in your ear. And I think that's the killer feature. I don't really want the cameras on them. I just want the speakers. I just want Apple to make like AirPods that are glasses. Yeah.

Yeah, this points to an amazing future. What could go wrong? Couldn't imagine. Mass surveillance by everyone. Can't wait for those to be in the locker rooms.

Yeah, well, I just took a picture. This is great. I can't wait. Did you see that? Like, I don't even know if it was true. I don't know what's true anymore. There's some, somebody hacked these apparently like Harvard that was then able to quote unquote dox people. Just they fed it through image recognition, facial recognition, and were able to do

Basically, go around and see who people are. Oh, yeah. I mean, when all the pieces of technology exist in some form, you can imagine that somebody's going to put them together, right? Like using a photo of yourself, you can pay a service or even use free services to find people.

a bunch of stuff about yourself and then you tie that to an always on camera on glasses, yeah, you're there. Yeah. So privacy will go from being a human right to basically a luxury good. It's kind of like people feel icky about having cameras on glasses and I do, I don't particularly like it, but it's also the killer feature that everybody wants is something that reminds them of everyone's name. When you walk into a room, we all want that secretly.

Yeah, lanyards. This is a solved problem. Hello, my name is... You spend too much time in conferences. I don't usually wear the lanyard. Do you ever leave a name tag on when you leave one of these events? Just walk around New York City with a name tag on? That's a perfect way to get mugged. So this hurricane had gone through Florida. I was not there.

It was too dangerous, so I came to New York for Advertising Week, which is a very strange event. Do you know about Advertising Week, Alex? I think I might have done something for it at some point. Oh, really? It's been around for 20 years, and it is a great celebration of the great industry of advertising. So you're missing it. A lot of panels, a lot of parties by technology, ad tech companies. I don't know. Have you done anything, Troy? No.

Advertising week related? Well, I don't know if this is related. I went to a book launch last night from my friend Lauren Sherman. Oh, okay. Chantel Fernandez launched their book selling Victoria's Secret book. Correct. Yeah.

It was fun. Got to meet, see a bunch of people. Okay. I think this hurricane, but I can't tell whether this is a minority experience of it because it's become very much in the information space. There's a lot of, there's characters coming out of it. There's some guy called Lieutenant Dan who rode out the storm in the bay in Tampa on a 20-foot boat.

And Caroline Calloway, who I believe is by some thought to be the worst influencer in the world, at least she's been christened that. She's down in Sarasota. She's also riding out the storm. She's promoting her book. Everything is an excuse for content. A lot of content creators are out there. And then, of course, a lot of misinformation. And there is a disturbing number of people who think that the government apparently controls the weather. Something I've noticed. Yeah.

I mean, anything more than one seems to be disturbing to me. I don't know if it's as substantial as the news makes it out to be. But enough people believe that the earth is flat for there to be a conference business built around it, right? You should always see like, oh, flat earthers? We're speaking at it later. Exactly. Exactly.

I don't know. I mean, it's just people playing around in the information space, Brian. I don't know how many people really believe that. Well, I think that's the interesting thing is when you get into these more confined spaces, when you get beyond mass media, is that you start to lose sense of like what is like widespread and what is not.

Sometimes I find if I spend too much time on X, it's completely warped my sense of reality. I'm like, no, this is not how, quote unquote, the majority of people are seeing the world. I think it's going to be interesting as we retreat into these niche spaces because it does warp your sense of what real is. Going on X, for me, I would think that a large group of Americans believe that the government controls the weather.

Maybe you need to follow different people. No, it's not follow because it's all algorithmic. I don't know. I turned on the news last night and came home and it's a strange world. The main screen was photos of or live video feed from Tampa. The ticker bar at the bottom was updates on the war in the Middle East. And then below that was the...

the record-breaking day in the markets, you start to wonder, what is this place we live in, right? It's a strange world to navigate. The presidential election is in its home stretch. And again, just to go back to this information space theme, it's really remarkable that the approaches that the campaigns are taking. Now, obviously, American elections have become

these battlegrounds over niches, basically, niches of voters, whether it's in the collar counties around Philadelphia or in the Midwest or demographically. There's a lot of fight for low information voters at this point, right? Whether that's young men, young women. I mean, just this week, Trump was on a comedy podcast. Meanwhile, Kamala Harris

Harris was on Call Her Daddy podcast. And then Tim Walls got, he got deployed too. He was on a Twitch stream. Yeah. These are the new talk show appearances, right? This is the podcast election. I mean, if you look at the numbers, like if you look even at the nightly shows numbers and stuff like that, they get completely destroyed by those YouTubers and podcasters, right? And then on top of that, politicians get like,

you know, like more time to talk and it's less likely to be like a serious reporter that's going to ask them questions. So they might, I mean, I think she did 60 Minutes, right? And then she did a bunch of podcasts and then Howard Stern. I think it's a smart media strategy. I mean, I think that's just the way things are today.

She did Colbert too. She did Colbert, yeah. But Colbert, you can see those things, like those nightly numbers aren't that big, but then it's all the kind of YouTube clips and TikTok that make up for it. It's just a very...

I mean, it's finally... I think it's finally shifted. I don't know how the next election looks like, you know? Is there still the 60 minutes and stuff like that beyond that, you know? Yeah. But I think this carries over into... I mean, to me, what's interesting is presidential campaigns are incredibly compressed, right? And so they...

Sometimes, they're a harbinger of trends that will wash over the entire media ecosystem. There's more urgency in these kinds of- Maybe we could put a clip of that podcast appearance by Donald Trump on Flagrant. Andrew Schultz and Akash Singh, I think. I have a hard time doing it to them because I'm basically a truthful person.

But frankly, it's quite something because he starts talking and they burst into uncontrollable laughter.

And it's glorious. So maybe we can put it there. Well, they can't help it. I mean, he's funny. He knows he's funny, right? But it's more like he says, I think he says something at some point, like, I'm a truthful person and the host cannot contain himself. It's definitely good entertainment, you know? I think it's fine that it's not just like, I think when it's like, yeah, the New York Times editorial board. I mean, at this point,

It is low information voters and it's fine. Most of the decisions that are being made are based on vibes. So this is fine. You get a cut of their jib and see if it sticks. I don't know. I don't think it's such a bad. Why would you think it's bad? Well, I think that there's a knee jerk reaction within institutional media because it's viewed as a threat.

A report came out about TikTok being used as a news source and oh, surprise, surprise, most people on TikTok are not following institutional news accounts or journalists. They're following quote unquote creators. And it's part of, I think, the waning power of the overall news media. And I think it's like,

it doesn't get replaced. There's just more sources of information now. And so obviously anyone trying to influence public opinion, whether you're an advertiser or a politician and politicians are basically advertisers, you're going to diversify how you reach people because that just makes sense. I mean, I think it's just more at the end of the day, everything's entertainment. People are trying to maximize their minutes, you know, by making them entertaining. And I, and,

This is all about having so much access to commentary, right? Everybody really kind of wants commentary that's contextualized into something they like. So it's either, you know,

watching the original Daily Show because they made the news fun. And then we found out very quickly that most young people that was 10 years ago were getting the news from the Daily Show. And then that switched over to kind of the YouTube sphere gurus on the left and the right that recontextualize the news. So

The news ecosystem is still there. They all use clips from CNN and everything like that, or they all talk about this article they read, but they're just recontextualizing it for their audience. And I think we're just building layers of abstraction between the news and people. And then what politicians have found out is, well, let's go straight to the commentators. That's great. It's funny, though. The buildup to any election is about a process of understanding promises and policy and character, right?

So that you can minimize the risk of making a decision as a collective. We used to filter all of that through a small group of elites that would provide us with a construct and information to make a decision. And now it's coming at you from every direction and it's turned into like a weirdo beauty pageant.

And it's just hard to understand, first of all, how you make the decision. And then I think more troubling is how we hold or how we manage accountability after that decision's made. You have someone who's elected that's doing things that cost people lives, that change the fabric of a country, that have real consequence. And so...

You know, if the run up to this thing is a sham and we don't make good decisions and then afterward, we're sort of incapable of kind of holding people to account because there's no good information. That's really troubling, right? It's hard to understand where the checks and balances are in a system that works.

at the end of it all have real consequence to how people live. Yeah, I think a lot of that is, again, Trump scrambled everything. But I think when you look back at the rise of Trump, I think one of the mistakes that

quote unquote, the news media made was to get sucked into the daily Trump show drama. And instead of focusing on government accountability, like I think that a lot of newspapers in particular should get out of the endorsement business. I think they've scrambled, they

They've scrambled it up too much. And that's not the role to me, telling people how to vote. The role is to hold government accountable. I don't care who's in office. Eric Adams was pretty clearly corrupt from the beginning. The fact that nobody was covering that. Nobody was digging into that.

Now, is that because of politics? I have no idea. But like this idea of getting swept up into the drama of the politics versus actually holding government accountable. Like I don't care who's running the government. That to me is a very viable role. That's why this Balmer thing that we highlighted a couple of weeks ago is I think important, which is a sort of media brand built around just the facts and explaining them to people.

Right, but the problem is you're building these. You can't really blame the media, and I can't believe I'm saying that because of the way the system is built and there's a profit motive attached to it. And...

having opinionated media is what people want right now. So everybody's kind of pulled into that. And then when the biggest show in town is Trump making either a fool of himself or showing people the light, then the news outlets need to cover it. And they're trying to run a business. And I think at the end of the day, what's probably healthier is that we have more

access to content and layers of abstraction and people that can provide context via YouTube or podcasts on top of the news, that seems to be where the thing is settling. Because I think we're going to wait a while if we think that there's going to be a news source that does all these things that says, well, we're just going to be about the facts and it's successful. Because people want...

you to pick a side every it's like it's just such a strong force when there is none of that when there is not that much choice then sure yeah we'll all look at something and it'll be factual but when i can choose a news source that is fun to watch that kind of blasts the other sides that has an opinion i'll choose that and that's what's happening right now you know like it's you can't really blame the media like what are you going to do if you run one of these businesses

Not cover Trump, not do this? What's your numbers decline? I wouldn't say not cover Trump. We're going to talk about bad bets, right? I think betting on being the opposition was a bad long-term bet. It was a very good short-term bet, and all the incentives, the profit incentives were there to take a resistance role. I don't know how the election's going to turn out, but according to the betting markets, it's going in Trump's direction, right? And

I don't think it's a coincidence that taking the opposition role, if that was genuine, really didn't work at all. And the trust numbers have just gone down for news media. So that was a bad bet, I would say. Do you want to introduce this idea of bad bets as a segment? I want Alex to. I was looking...

you know, past episodes that we had and we made a lot of predictions around AI and then that's the different companies we're doing with either Microsoft kind of going

going all in on OpenAI, Zuckerberg's bet on the metaverse, Google's kind of, you know, feeling that Google was kind of caught like a rabbit in the headlights. There were lots of, you know, Microsoft spending $70 billion on Activision. And the world looks pretty different now. And some of these have been, you know, bad bets and then also bad calls by us, I think. And I wanted us to kind of review them and then also look at media bad bets and good bets.

Some things that we might have not expected would have worked have worked. Some things have fizzled out. So I thought we would look at decisions, ours and theirs, that might have been bad. Does that make sense? Yeah, that makes sense. This is why I actually bought and wore my Meta glasses today, because I was always coming in hot against...

meta and I think they've been having they've been doing gangbusters all it took was Zuckerberg to get like a six-pack and now everybody loves him but I still think you know that the metaverse bet was a bad bet and Apple did the worst bets of all which is it got you know pulled into this fight with the Vision Pro and then completely dropped it because turned out that the next wave was AI and it's interesting if you look at where we were a year ago or a hundred episodes ago

two years ago and where we are today, people are sitting in very different positions. And I would say Google's sitting way is way better than it. And I thought it would be Apple's in the worst position. I thought it would be Meta's in a better position. I thought it would be and Google's open AI and Microsoft's open AI that might not, you know, have been the best decision. But we'll see about that.

What's a bad bet in media, Brian? Wait, let me stick with tech, for instance, because I think you can't really compare the two because like bad bets. I mean, it's bad bets with like monopoly money. Like so Apple made a bad bet. Its market cap is up 28% in the past year.

That's a bad bet? That's what losing looks like in these industries? I mean, this is basically Lena Kahn's arguments. It doesn't matter if you're the house, you can't lose. So if you're sitting on a pile of cash, if you're Google and you have basically the greatest business model ever invented, you can make like 50 bad bets. Just make the bet. At that point, is Oculus a bad bet? Who cares? I mean, they have...

so much leverage in these businesses that to compare it to like a media business, they can't make big bets. You can take moonshots when you have a stranglehold on these markets. Is it even a bet when there's no downside? I don't think there was no downside. I think Meta's had to work really hard to

to kind of work its way out of this situation they were in with all that investment into the metaverse, to talk about the metaverse. And now their story makes a lot more sense. Now, the bad bet was betting against meta because I actually think Zuckerberg is also a smart guy and they've worked really hard to move out of that. Maybe don't be too quick to say the metaverse was a bad bet.

I mean, I just disagree with that. Well, I mean, maybe in 10 years, but I think, I think the, that, I mean, there is no path to new platform to, you know, this, all of the stuff that the stuff you're wearing on your face without the metaverse.

And I would argue that the metaverse was an accelerant for their AI development because AI and kind of metaverse go hand in hand. And now they've done, you know, the extremely hard work and investment required to build the competency and hardware that, you know, TBD, but it looks like it's going to pay off.

So, you know, I mean, I don't think it was maybe, you know, a clear line for A to B. That's what I'm saying. Betting against Meta was the bad bet. I'm calling that out. And part of that is that I think that the thing that they demoed at their event, the glasses that kind of like looks somewhat like glasses and can project mixed reality in front of your eyes, they're still big and they still cost like $10,000 to make. But I thought we were 15 years away from that.

I didn't think we were that close to that. And that's completely changed the game. And it's probably – Apple might have something in their lab running like that. But I think it's just that was – they just threw fuel on that fire. And I expect we'll have these types of products in the next two, three years. I think Brian's point is terrific. Yeah.

You know, when your company's throwing off billions of dollars in cash flow and, you know, the market's preventing you from acquiring your way to the next, you know, equilibrium that, you know, you throw a huge amount of money at innovation and, you know, the path is nonlinear. I think that the biggest bad bet I would, to transition the conversation to media, I would say would be probably CNN.

And the bet there was they could, you know, continue to rely on cable news as the primary distribution, you know, environment for them and that they would, you know, build a big free website. And had they changed the way they thought about, you know, their primary distribution vehicle and everything that would be required to serve that new customer, you know, CNN would look more like the New York Times.

that have built a subscription business against cohorts, diversifying news to games to lifestyle, and figuring out how to build really a trusted app-based relationship on the phone that will sustain a subscription business.

And now you see, you know, CNN kind of coming to the paid, you know, internet-based or DTC game really late. And, you know, there's still a lot of profit in the business because of, you know, the cable system. But I think that the transition is going to be really, really hard and they're sort of a day late, a dollar short.

So they could have made a different bet on shifting distribution much earlier and the company would have looked a lot different.

What do you think broadly though within the publishing landscape from the beginning of the internet was like the worst bets? Now, a lot of them, I don't know what the alternative was. Betting on distribution you don't control, throwing your lot in with the platforms, clearly in retrospect,

That was like stage two, right? So stage one was deciding to put out free content. Okay, yeah, free content. And then that forced you to generate more traffic that only the platforms could give you. And then you sold your soul to the platforms. That was like the second sin, right? And then the cat was out of the bag after that, for sure, right? Right. But were those truly bad bets? Yeah.

Because it wasn't like you're sitting there like meta or anything. You can do like whatever. Meta's up 82% the last year. Is that because they made good bets? I don't know. I mean, it's just, that's just how it goes. I don't want to bring it back into tech, but I wouldn't underplay the fact that there's like real consequential decisions that these guys are making. Of course they make consequential decisions. I'm just saying that. And it doesn't mean like in tech, especially with these, the,

big guys, it's not like the bets are going to... Yes, maybe the media bets we're talking about are the catering budget of meta. And the bad bets are existential for the CNNs of the world. But that does mean they're not hugely consequential and allowing the companies to dominate in whatever fields are emergent. Opening up Three Mile Island again, I guess that's a medium-sized bet for Microsoft. Oh yes, they opened up a nuclear plant. Just to...

to power the LLM. But I mean, I think the CNN bet, the thing about that that kind of baffles me is that

everybody was seeing that the car couldn't make the jump over the cliff, right? And they were just going, no, no, no, let's do it. Let's not pump the brake. Let's go this way. We're going to jump that cliff. And what happens in the room when they make decisions like that? What do they expect? I mean, the real-time bet on this is happening right now. I mean, what really happened? I like your point, you guys, that you're saying when you were in that and you were not only –

optimizing a media business for a new type of content creation. So, for example, if you were a print business that made a publication or a newspaper, you had to learn how to do all the other things, right? You had to learn how to publish at a new frequency with more intimacy, with all of, you know, with, you know, challenged by the kind of personality and authenticity of a world where everybody could create.

And so you had to learn a kind of new content creation vocabulary and new mediums and new rules of distribution. And you're like, holy shit, one's going down, you know, 10, 20, 30% a year. We got to figure out how to make money quickly to get this thing going. So it's like, you know, whether it's better, it's just really survival.

And, and then you can kind of reflect back on it and say, well, what if we had, instead of doing all of that, we just really focused on niches, on quality content, on subscription, when by the way, there was, you know, very little consumer appetite for subscription or infrastructure to make it kind of frictionless on the internet. And you didn't have the sort of tech investment to do it. But right now the real time.

new bat that all media companies are entering into, we saw Hearst do it last week. We've seen, you know, Dottesh Meredith do it, New York Times, everybody, is we're selling arms to a new aggregator, right? And like we are saying, okay, well, on the margin, we can use that. But you're talking about the AI deals, correct? All the AI deals, yes. And anybody that uses AI realizes that it is

Just like the last model where the aggregators completely slaughtered media because it was a better interface to information that aggregated multiple players into a single well-executed interface. And now we're doing it all over again. And the interface is even more powerful because there's AI behind it. And we're saying, we'll close the gap. I mean, look at what's what it really means.

We'll close the gap between basically historic or evergreen content that the LLMs did well at the beginning, like all the knowledge in the world, with current real-time knowledge, right? Because we're going to give you all our current stuff that we're making. And now the new interface, AI, is going to be twice as useful as search was.

And, you know, I mean, the simple math of it is it solves a consumer problem better. And yeah, I looked at the new Google prototype the other day and basically think of the SERP response as being a generative response to whatever you want, how to get a stain out of one, you know, like a stain out of clothing.

So that was all generated. And then below that was a bunch of what I would call, you know, content or content marketing, like an article from Tide and an article from, you know, Better Homes and Gardens in a little strip in the middle. And then below it, three or four big links directly to sellers of the product. So think generative response, a little tiny media layer, and then commerce.

You with me? And so that is the replacement. That's your reality media. That's, you know, in the best case scenario for the replacement. I would say take the middle position because you're probably going to end up in the last position. Well, the middle position is the content that's creating the generative result. And the bottom position is...

the sort of abdication of the affiliate economy to the aggregator, right? Commerce going to direct commerce to, to, from, you know, beginning point to end point. Right. And that little poor middle air, not only is getting no screen to, you know, screen visibility, but it, you know, it's given its content up to the, to the generative response above. And it's given the performance revenue, i.e. affiliate revenue to the spot below. It's like, that's death. Yeah.

If you look at the playbook that's been used, it's not even a new playbook. It's been used many times over, right? Where I don't think it's entirely intentional, but this is what happens, right? Tech company makes a platform. They build up the platform's utility by using content that is commercial content, high quality commercial content.

They might get in trouble. Then they make deals. And as they make deals, they get the consumer used to a new behavior and they reduce all that friction until they figure out a way to get content for free. YouTube, right? You start out. It's actually a piracy site. People go there to see NBC Universal shows. They get sued. They build up all that infrastructure, right?

make a bunch of deals with a bunch of people, but all of a sudden consumer behaviors have changed to become a huge platform. So most of that content gets created for free by creators in an economy. This will, I mean, it's the same thing. Like if you think that you're kind of abstracting the content consumption so much from the writers, you know, in the New York Times building, and you're going to survive that, it's kind of like, it's kind of a scary thought because at some point,

Turns out you have the greatest editor in the world. You have training data that has learned from all the greatest writers in the world. So it means that anybody's Twitter stream can be turned into a thoughtful article if that's what you want to read or a bullet point list if that's what I want to read. And I don't think that Endgame looks very good for media. And I think there's a world where we wouldn't even notice

because the models are so intelligent that they're just grabbing all that free and available content that people are willing to put onto the web and turn it into high quality content. And I mean, we listened to that podcast that was generated. That's just the beginning. Like that's the stuff that I feel like if you're just in the content creation business today, what you were benefiting from is an infrastructure to where you can create a high quality product, which most people don't have today.

access to, but that's changing, right? Like you're getting people used to new behavior and then that's impossible to work back. So, so Troy, is this a bad bet though? I mean, is this cause like, yes, the deals are not great. Like they're not going to get a lot of money out of it. And it's, it's pretty, the, the track record is pretty set at this point. But again, I'm left with what are the alternatives? This is, I feel like

the publishing industry has been like a basketball team that's down 12 points with two minutes to go. You're just trying to extend the game. That's all you're trying to do. Well, the sports analogy is you probably have to rebuild for a few years and get rid of your expensive talent and find a bunch of new talent. And I think that what all of this means is that

The constraining function in media companies, unlike, as you pointed out, in tech companies is bridging past to future with limited resources. And so the only way that you can bet on something that is longer term is to have mass rationalization of your cost base. And real, I think, and Rashad,

Tabaka Walla makes this point in a recent post that he made. You need a new kind of organizational structure that bridges inside and outside in new ways where the sort of, as he calls it, the two-dimensional structure that implies authority in what was a kind of traditional org chart needs to give way to something way more flexible, way more organic, way different than we've seen in the past, which

fundamentally means a rethinking, I think, of the relationship between employer and employee. And I do think that this is a really important thing. That's what struck me about that article, which is we need to rethink the pact. And what it means is that, yeah, you may have

More of instead of a employee-employer relationship, you may have something that's flexible over time, that's defined by maybe a minimum payment that is almost like a retainer over time where healthcare isn't either on or off, where you can have a kind of primary and secondary relationship. Your primary relationship might hold your health benefits and a small payment over time and you can flex that up or down.

And you're free, by the way, which you never used to be, to do a podcast with media company A while you do your own independent gig on Substack. And media companies traditionally have tried to put, I mean, I used to do this, try to put a very firm wall around the talent relationship. And I just think that that's not going to work anymore. And enter in this discussion a beleaguered group of people

That have felt like they've been, you know, they were the sort of, you know, they were the fuel in the machine for a broken media industry, which are the editors and writers and people that make the thing that, you know, we told to make more, make it faster, you know, earn your audience, you know, hit the numbers.

And they're saying, no, fuck that. Like we're going to unionize and we're going to try to find a little bit of power in this relationship. When that pact becomes more rigid on account of a contract between a company and a union, I'm really concerned about that because what the future demands is way more flexibility in that relationship.

And so I'm concerned that you have these beleaguered media companies that are massively constrained by low trust employee relationships and it's very troubling to me. Bingo. I think the one thing that comes through, I mean you've been singed by union battles before.

is when I talk with people running these organizations and just hearing, I just don't see how they can turn around the ship with the kind of adversarialness that has been embedded within these organizations. I don't get it. It's just, it's really, really difficult to run these businesses.

And so much of the battles right now are counterproductive. And, you know, if you look at that, it's not, it's not stopping the layoffs. The cuts are, are, are going to happen regardless. And I just don't,

understand how you can get to that more flexible model with this kind of industrial approach to employee-employer relations. I mean, I think the dock worker strike was a harbinger and how AI and automation, in this case it was automation of the ports,

I assume AI has evolved somehow, always is, was a major part of it. And this is coming, the negotiations are all within these media companies are going to be increasingly about how AI is applied. And that is just going to slow down the adoption of these models that are needed because the

Non-unionized places are not going to wait. And so I think it's going to be a liability, I think, for these companies that are trying to turn around their models. It seems like there's a future structure. I'm going to get singed on Twitter if this gets out to union people.

people. It's like the worst thing. It's impossible, by the way, to assign a story as an editor to any reporter to write about the impact of unions on this business because they either won't write about it because they're going to get attacked on Twitter by their friends or they're just going to advocate and just turn a blind eye to it. It seems like when you're somebody talented that joins a corporation, they come to you with a set of things

things that you couldn't have on your own, right? And it used to be infrastructure. Well, that's all, like all the infrastructure is available for free anywhere. It used to be distribution. Well, that's also available everywhere. And then it used to be like, well, but you can make more money here. Well, that's kind of also going out the door because we're seeing all these talented people, you know,

turning their audience into newsletter signups or whatever. So I think you need to have a new structure where you hire less people, you invest less in infrastructure, but you kind of give the promise to everyone that if you're successful, you guys are all going to be rich. In some ways, it's kind of a tech playbook where you're

I can't see if you're in any way somewhat successful, why are you staying in a media structure if you could? Well, I will take a little bit of the opposite. But that's what you did, dude. Yeah, exactly. But Taylor Lorenz was an example of this. And Kyle Chayka, one of our former guests, wrote an article and was nice enough to quote me in the article on The New Yorker about this. And Taylor –

She's very dramatic and I like Taylor, but she's very dramatic and gets in lots of conflicts. And I think she's totally made for the independent path, not for being inside of the Washington Post or the New York Times or the Atlantic or anything like that is just not the way those brands operate.

But I think that that story really highlighted a lot of the upsides of taking the independent path. Now, what I said to Kyle also, though, and he knows really well, is when you're within those organizations, though, they make your shit way better, way better. I've been in a couple of New Yorker stories, and it's always a kick that the fact checker

Yeah. And goes over the quotes, goes over everything. And it's like, and a lot of writers really need good editors. A lot of writers are not actually great writers. Well, okay. But it goes back to, I guess I'm forming a thesis, right? Where you used to provide infrastructure, right? And that infrastructure was very valuable. You literally couldn't put words in a form that people could get, right? And as time goes by-

Exactly. And as time went by, that infrastructure became more and more available, more and more free. And now I believe that with AI, right, because it's all interconnected, the infrastructure of editing. Yeah. I'm going to start writing a newsletter for the company. And the way I do it. Can I sell ads on it? You can, absolutely. Your investors are going to love this. It's going to be a new like.

A revenue stream. But the way I do it is I use this app called Cleft and I'll just speak into it. Like I'll just speak into it with a bunch of ideas that I have. It'll record 30, transcribes it, turns it into like a contextual list of things, bullet points. I grab that bullet point. I drop it into chat GPT, turn it into voice mode. On my commute, I discuss all the points I want to make. Then I ask it to write comments.

first draft of my newsletter. Then it spits it out. I ask it to make it shorter. Then I put it in a thing. I then rewrite it. But it takes me like, it takes me a test of the time. This sounds so complicated, Alex. I just order a cup of coffee and sit down. But you're a writer. You're a writer that seems to be able to write without an editor. This is all taking away that skill. I appreciate that.

that. But you see what I mean? I think even video editing, stuff that is time consuming will be kind of all that infrastructure is no longer needed in your times of CNN.

You can create great stuff. I think the hard part will be around things like legal, like services that are not able to be automated yet. For instance, liability insurance. Substack initially tried to have something about this. You can get sued. Powerful people like suing people. Brian, Brian, I...

Where I'm sitting right now, I can tell you there's probably 10 businesses saying there's this new creative economy. What do they need? Liability insurance. Okay, let's make a four-click thing that is liability insurance. They already did it with – there's already all these startups like Pilot that handle basically like a whole CFO system. All of the things that made it difficult to exist outside of a corporation is being automated.

Yeah, that's true. I mean, I think about it- I would bring it back to one thing that media companies, you said that a good media brand or the infrastructure of a media company makes you better, Brian. I totally understand that. One thing that media does is packages. It turns content into a form that is more rewarding to read, I suppose. And I think that that's really the ultimate use case of AI.

Because packaging becomes personalized and it becomes, you know, multi-format. It is delivered in a way that you wanted bullets, paragraphs, audio, video, whatever. And so that role in media, which is we take information from reporters and smart people and package it. We package it with a brand. We package it with editors. We package it with images. All of that is being automated.

But we've seen the decline of the brand package, right? More people use things like Google News or Apple News and don't even care about the source, right? Turns out you only care about like

It's like music albums, right? Like, I like this song, I like that song, and Spotify turned it into playlists. And we all lament the loss of the album, the art of the album, but that's not what people want. And AI is actually incredible. Not entirely. Hold on one sec, guys. Just one sec. Hey, Steve, what do you need from me? Which Steve? You know, he shows up now and then.

Steve shows up. He might show up later in the episode. It's like Kato Kaelin. Can you get him back later on to do a good product? Oh, yeah. That's good foreshadowing. We'll do that. You know Steve. He's a big hunk of a man. Hunk of a man.

What were we talking about? That narrows it down. Oh, but there's still a halo, right, to brands. Like, I mean, like we talked with Emily. I think we talked about it, but I've talked to her about it. Emily Sundberg was a former guest on here. I mean, she still writes for, occasionally, for, you know, brand publications because there's still a halo to that, right? Because I was like, well, economically it wouldn't exist. Brands are still an important connective tissue. You know, I was thinking about this. I was...

You know, Taboola, if nothing else, has been incredibly successful in grabbing an immense amount of supply at the bottom of pages all over the Internet. Right.

Like huge. From Apple News to Yahoo to Publisher ABC. Like they're everywhere. And then you ask yourself, even if there is good content in some of those slugs below an article, right? Why do you dismiss them, right? And part of it is that a good piece of content might be next to a toe fungus, you know, content marketing slug.

And the truth is, is that without the net, all those chunks of content, those individual pieces of content without context, without brand at the bottom of a page are useless to me because there's nothing to signal quality or, you know, relevance.

And, you know, I think it's for their part, part of it is just the system where anybody can inject content into something that's going to spray all over the internet. But, you know, and as a result, there's never any context. And in that world where pieces of content are completely disaggregated from the signals you need to say, am I going to spend time here or not? They're random. They're totally random. And then the price of them drops to the price of randomness.

So I have a question then. Was betting on the open web a bad bet?

You should have stuck with Pathfinder. For media? Yeah. I mean, like the open web seems like it's disappearing. It doesn't have a lot of people who are invested. Is the open web disappearing though? I don't think that's true. I think we have to be careful when we say that. I mean, new interface forms like OpenAI exists on the open web. I use it on the open web. I continue to get a lot of information from the open web. Reddit's on the open web. We get our email on the open web.

You know, the open web, it never take away my open web, you son of a bitch. I love it. I love the open. You know what I mean? I think it's a tricky question to answer, though, because it's it's it's multifaceted. One, like if the open web had an infrastructure for payments built into it early on, which which which.

What it should have. Which it should have, but there was a philosophical kind of disagreement around whether or not that should be the case. I think media companies would have been less pressured into moving all their content into platforms, which in turn made the open web less relevant for this type of stuff.

But it still remains like one of the best ways to distribute content. Yeah. I mean, it really, there's payments and then there's access to native functionality on devices that really limited it to be more of a dumb document repository. Yeah.

And then we spent years and years and years putting JavaScript on top of it to make it behave like something more sophisticated. And it never quite got there, which gave way more power to the people that made apps. Apps are naturally, you know, have a power law more so than the open world.

open web. Well, I mean, also both Google and especially Apple is incentivized not to make the web better, right? There are lots of things like putting a website as an app, as a shortcut app on your iPhone's desktop is just complicated and messy enough so that it's not compelling. By the way, pet peeve, pet peeve number 2000. I think it's a new segment.

No, it's like a pet peeve. Yeah, I think you should. So Apple has had years to muscle their way into premium content through the acquisition of texture and the creation of Apple News. And now it's a, what is it, a left swipe on your phone. It's built into a kind of native notification system. They have every single advantage in the world.

And the interface to content via Apple News sucks. It's so bad. It's so hard to find stuff. Their for you feed is ridiculous. And, you know, they've tried to work in audio and, you know, interactivity and games and stuff. But Apple really has, to me, has squandered what could have been the most beautiful interface to information. And it's wildly successful.

Well, because they have their repackage. That's what I mean. I want to make these bets where no matter, it's like, yeah, let's make a bet. Tails we win, heads we win. I don't know. What is the... I think we're going to... I'm surprised they don't produce worse stuff because without that kind of downside risk. I can't help but think that it would be the best thing for companies like Apple and Google that people come in and start, that governments come in and start just like messing with their structures.

because I think at this stage, it's actually, you know, the ability to make bad bets that have very little repercussion is kind of cancerous in an organization. You know, I let Google just like stagnate and that got an existential risk when they noticed they didn't really invest in

in just like building consumer AI as they should have. And it would, you know, it could be a great thing for Apple if there was like somebody that forced them to open up the App Store. It would be a great thing for Google if somebody, you know, forced them to open up the App Store or broke them apart because then it would actually get like all of this energy and this talent and this technology that they've kind of accumulated to be used to actually compete in the market.

So are they still doing this sort of hoarding of talent kind of thing? Oh, yeah.

For sure. I mean, man, they buy companies for hundreds of millions of dollars just to hire people back. Well, that's another sort of aspect. The DOJ came out with its proposed remedies in the search case, and they're going there. I mean, they're saying that this probably needs structural. Now, I don't know if they'll get this through, and these things are always tied up forever, right? But the fact that it's now widely being discussed, the structural remedies, not because...

I think you can only get away with it so long. I mean, these consent decrees, every single time they're violated. And these fines just don't stop these companies at all. You know, look at Facebook with what, is it WhatsApp? It's just like, it doesn't work. So I think it'll be interesting to see if that actually comes to pass. And there, I mean, I wrote a little bit today about what this kind of post-Google policy

And I don't mean post-Google, Google's going away. But like, you know, Google's grip as basically the dictator of the internet, you know, being loosened is going to be massive. Yeah, the one that I struggle a little bit. To me, any big company, a big company is defined by market power.

Market power largely means some type of moat because you have a network effect or distribution dominance or...

some kind of hold on, you know, talent or resources. And, you know, big companies are sort of by definition, inefficient, and sort of exist and kind of float along because they have this unnatural power that that prevents them from being disrupted at any moment by someone more nimble, you know, smarter, think thinking new ways. And so if you break down Google,

There's really like five or six entities that all each of them have their own market power dynamic. They could be separate companies and thrive as such. So YouTube has massive network effects as being the video aggregation point for millions of creators and millions of consumers connected by an algorithm and a brand that supports that. Natural business, huge in and of its own right.

Cloud, particularly when you add AI to cloud, huge business, right? Search is the connective tissue of the open web. Android is the thing that controls millions and millions and millions of mobile phones and the connective tissue for an economic economy.

marketplace called the App Store. So all of these businesses are in their own rights, businesses with distinct distribution, power, moats, network effects, et cetera. Ad tech. You forgot ad tech. Let's not forget our friends in ad tech. Yeah. And all of them, to me, when you add AI onto them and the sophistication and investment required to manage AI on top of them makes them that much more powerful.

Like add AI to search and suddenly it's the only place to get answers. Add AI to search and suddenly it's the place that connects a content query to a commercial query. Add AI to, you know, a YouTube video marketplace and it becomes the clearinghouse for all content that's harder and harder to permeate. Add AI to the cloud and it becomes, you know, the place that not only delivers, you know, basic compute to you, but also solves your problems and has the density of something that's thinking on your behalf.

So, you know, it's like someone ought to break Google up and it'll be just fine. There's like a bunch of things that can stand alone inside of that company. Yeah. And then the AI and ad tech is the PMAX, you know, I mean, they're just going to do end to end black box. Oh, you add AI to ad tech and it just becomes something that people, you can't even deconstruct anymore, you know?

Yeah. Perfect ending. Yeah. Perfect. Bad bets. Bad bets from Alex Schleifer. Well, I mean, just to maybe just one last point. Actually, ironically, it was Google's bad bet here might have been that they actually allowed secondary stores to open up because they went fully open source. And Apple, the ruling against Apple's App Store is,

you know, Apple's still allowed to have a locked down app store, but Google, because it had other stores and was then forced to kind of strong arm people into installing the Play Store, they, you know, they had a much weaker case. So keeping things locked down. They had to do those deals. Yeah. I mean, there's lots of bad, here's a bunch of bad bets that we can watch going forward, right? Obviously, you know, we can put the ones behind us that are

that are seemingly already played out, like Cable made a bad bet by giving up dominance to streamers. And Oracle made a bad bet on AdTech when they paid way too much for Moat and Grapeshot and BlueKai and that all evaporated. So Oracle never did AdTech. We're about to see what the outcome is. Is Elon and Tesla's bet on camera versus LiDAR at way lower cost a bad bet or a good bet?

Today is the Wii robot event where Tesla is going to introduce their next generation of self-driving vehicles, apparently. The difference between putting $100,000 of LiDAR on a Waymo and a bunch of cheap sensing camera devices on a Tesla, the economic difference is massive.

We'll see whether or not the sort of Elon bet is a good bet because it's cheaper, but it can't actually get to the place of self-driving. So that's a big bet. There's lots of bets. Again, SpaceX made a bet on fundamentally changing the economics of space, like shooting a rocket up at one-tenth the cost of NASA that enabled them to do repeat missions and put satellites into space.

And so that was a good bet, right? That one's proven. I like this construct, Alex, good versus bad bets. And there's the ones that we don't know yet. Yeah, we should do another episode on good bets coming up. But I got to run. All right, we have to do good product. We're going to have a guest good product. Is that right, Charlie? Yeah.

Well, there's a guy hanging around here. Your house guest? Yes. Bring him over. He gets up and he tells my kids to make him coffee and walks around in his underwear. Can you introduce him for people who don't know who he is, like myself? Well, he's kind of a legend in the advertising world. I used to lovingly call him the Hunter S. Thompson of advertising. And he, for many years, many, many years, played a pivotal partnership role at Omnicom.

connecting, you know, that media holding or that advertising holding company to all the big tech companies. And so it was well known by everybody in the industry and he's a big character, lovable guy. And he drops by now and then and seemingly sort of takes up half the house. So let's bring him on. Let's do good product. Is it time for good product? Good product. We got Steve Cattleman as a guest good product commentator. I thought it was Cattleman. Isn't it Cattleman? Is it Cattleman or Cattleman?

It's both. Both. So, Steve, why don't you try to figure out a way to get over here? Hold on one second. We have a special guest good product here from Steve Kattelman-Kadelman.

Okay, hold on. A legend of the advertising industry, particularly the ad tech ecosystem. I think I last saw you, Steve, lounging poolside at the Fontainebleau. I can't hear you guys. No, that's fine. We're just talking about you. They're talking about you and you don't hear anything. Hold on one sec. Looks like it's good. It's good. We'll just take these off for a sec. Are you guys going to share AirPods? Hold on. Just a minute. Don't touch me. Okay.

Can you say something, Brian? Yes. Okay. I can hear you. No, you got it. Okay. I don't know if that's going to work with the Echo, but Steve, we do good product. I think Troy has briefed you on it. Do you have a good product for us? You had a whole bunch. I listed off five to ten things that I thought were... All right. Well, choose one, maybe. Well, no, no. They're all sort of... Good products. First thing that came to mind was, you know, I'm a homeowner in Nebraska.

And anytime I need to glue something, I said liquid nails. Liquid nails is a product that you know that if you squeeze it out of the tube and stick something to a wall, it's going to stay.

My next, you want to comment on it or you want me to just rattle it? Is that different from Krazy Glue? I mean, I'm an apartment dweller. Way different than Krazy Glue. Krazy Glue doesn't work. Krazy Glue gets all over your fingers and it sticks your fingers together. Liquid nails, takes a little longer to dry. Okay. You know, like it's just, I remember commenting for the past 15 years that every time I buy liquid nails, it's a product that actually does what it's supposed to do. So I've always been impressed with it.

It's just something my heart feels. Steve, this broadcast, ironically, is brought to you by Liquid. Oh, it is? Yeah. So good. That's nails with a Z, right? Liquid nail, I don't know. It's got a gold label.

Next thing, also related to Nebraska, I am a proud member of the Ultimate Sip Club from Panera Bread. And Panera Breads are all over the place. And Panera, not only do you get free Wi-Fi, but you get, for $11.99 a month, unlimited drinks. I thought it was $12.99. It's $11.99 in Omaha, Nebraska. It's almost like a Planet Fitness. Depends on where you start your membership. It's kind of the opposite for it.

Oh, no, no, this is good stuff. This is, it's healthy. I thought it was soda drink. Well, you can get a diet soda. Oh, you can also get iced teas. So it's unlimited coffee, unlimited sodas. And for a while they had this thing called charged iced teas. Charged iced teas were like five times the caffeine of coffee and you could go fill it up anytime you wanted. They, I went there one day and it was gone.

And I said, what happened? They said, teenagers were going insane. So they have, you have to ask for it behind the counter. Oh, that's, that's how you know it's the good stuff. When you're, you know, I, I, I drove to Burning Man and a couple of airstreams and I, I checked on my phone all the time where the closest Panera Bread was off the I-80 and I'd pull in and fill up all my, all my containers with soda and charged iced teas and coffees and check my wifi. And it was a wonderful product.

You know, I was happy with it. Another relevation that I was very happy with also about moving to Nebraska, there's a phenomenon of unlimited car washes. And me being a student from Berkeley, I was always very upset about these people in the Midwest that were washing their cars every day. I just thought it was a waste, waste, waste. But with them, they have free vacuum cleaners.

As long as you drive in through the exit and go in through the outdoor, as they say in Led Zeppelin, full floor, you could go vacuum your car for free. And they had sprays where you could clean your tires, you could clean your windows, all that. Is your car clean?

Well, I mean, I have OCD. But I mean, this is just a recurring revenue play, right? I mean, I see these membership. I went to a car wash for the first time in 20 years, and they had memberships they were trying to shove down my throat. Correct. You have, but they're very high tech. You can't cheat the system. They scan your license plate, do all sorts of stuff. So roughly $20 a month, you can wash your one car as many times as you want.

Kind of gross in concept, but with that, there's a way to game the system a little bit and vacuum your car and clean the windshield without paying that $30. That's amazing. Alex, can you even do this in Europe? In Europe? No, I think car washing is outlawed. It is outlawed. I was just in Scotland and nobody... How do they clean their car?

They put a wee bit of water on a rag and go down. Yeah, and the cars are on the wrong side of the street. It's all...

All right. Well, thank you so much. Oh, there's another one. There's more. I'm not done. Are you kidding me? Usually when Troy comes here, he'll say something like an apple or bullshitting. This is good. This is like the closing keynote. Well, you missed it last week, Alex. It was bullshitting. Oh, I heard it. I listened to it. From last night. We had a good one last night because we were playing pool at the bar.

Troy and I met for a late dinner, and then afterwards we went to a bar. And I always think like I'm, again, moved to Nebraska, don't have a lot of friends, so I built a bar in my basement. I don't go out to bars because there aren't really any good ones. But last night we were down in the East Village or somewhere, and the idea of going to somebody else's place and getting a beer and drinking, and you don't have to clean up and talk to strangers that you wouldn't normally talk to, I still love that phenomenon. And in this bar was a pool table.

And another thing that I really love is pool tables in a nice local bar. 100%. Yeah. Beat them.

Crush me. Yeah. What else you got? They should have pool memberships at those bars, right? Like just unlimited pools. It's called the $7 beer that paid 60 cents for it. And the pool table is high tech. Seven bucks. Where are you going? You can now pay with a credit card. You just tap your card on the table. Everything's high tech. I don't know, quarters. Yeah. And the English guy was a good competitor to me. He was a little like, you know.

I made up a term called getting a sifle in. It's when you take advantage of a moment that you shouldn't. He was doing that last night. He had that rule about putting the ball anywhere. What do you call it? Ball in hand. Yeah, ball in hand. That's the standard. He also said, check this out.

Tell me what you – if you scratch on the 8, you don't lose. Then this dude pulled up a rule book out of his phone. You scratch on the 8, you lose, dude. No, those are weenies. Those people are weenies. They're like the people who insist – like who correct you when you use data like as a singular. I mean remember how handy the pool thing was? It was not like he was searching for the rules. He had that handy.

For the record, American Association of Billiards says you don't lose until the ball is hit in the right pocket. Thankfully, you beat him. So I'm going to get the phone. He left. The final, well, now that you're on the road a lot, you, like me and others, really appreciate YouTube TV, which is your cable box in your pocket. I was saying I do pay for a monthly subscription, which is because of YouTube TV.

Also, I was just in Scotland for 17 days in YouTube free version. I think it's phenomenal. So much content. I always used to say back in the day as I was a fan of the newspaper because I'd read a story and I didn't know that I was interested in this other story that was right next to it. It's similar to YouTube television. It just plays stuff that it thinks you're interested in. I didn't realize it. It was just pretty badass. So good. This was better than if we had planned it.

I appreciate you coming by. Can you finish the line? See you, Steve.

Okay, we should leave it there. Good episode, guys. Good episode. Troy, I'm going to see you later. I set a few topics. You guys want to wait? Break a leg. I think the dance number is going to... I don't believe in panel prep calls. All right. Well, good luck, guys. All right. Thanks. Remember to tell everyone to like and subscribe and whatever they need to do. We're on YouTube. We're on podcasting. We'll go back. Max Shamelessness. Max Shamelessness. Max. Okay. All right. See you. See you.

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