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Today is Media gossip day on the planning.
This podcast, Kevin rooster.
The New York Times is back to talk to us the latest showdown in the crypto World.
Facebook’s big Wipeout.
But first, the story that has dominated my world and my Twitter timeline, my sliver of the internet, Joe Rogan.
Joe Rogan host an immensely popular podcast, that is broadcast exclusively on Spotify.
This is a very good time to tell you that Spotify is the parent company of the ringer podcast Network, which includes the podcast.
You are listening to.
So with that disclosure behind us.
I’m gonna be honest.
This is an open that I have written and Rewritten, I think like 10 times.
So here’s the way I want to play this.
I’m gonna tell you the facts as I see them about the Joe Rogan Spotify.
Because I always think it’s best to lay down the facts before we start sprinkling on interpretation.
Then I tell you what outcome, I’m rooting for then.
I’m going to tell you why that outcome is likely to make nobody happy.
Including Joe Rogan, including Spotify, including me and I’m going to bring on Kevin and he’s gonna tell me if I’ve got it all wrong.
Anyway, so here we go, Joe Rogan has the most popular podcast in the world.
If you don’t listen to the podcast, I would describe it as all over the place delightfully.
Sometimes offensively sometimes extremely well.
Ang Lee all over the place in 2020 Spotify.
Hello again, corporate overlords knew that it needed exclusive content to differentiate itself from all the other streaming music platforms out there.
The number one, search for podcast and Spotify was The Joe Rogan Experience.
So for a hundred million dollars, they signed Rogan to an exclusive licensing deal.
This is not ownership.
Its licensing thing about ESPN renting, exclusive rights to broadcast Monday Night Football because it will make the channel more valuable to viewers.
And cable companies, if the same basic economic principle.
So throughout the pandemic Rogan, my Spotify license through Spotify.
I should say, has been super skeptical of the vaccines.
He downplays their obvious benefits.
He plays up their flaws and sometimes he brings on people who just spout straight-up bullshit about their risks a few weeks ago.
The artist Neil Young, Joni Mitchell, and several other musicians, pulled their music from Spotify to protest, all these anti-vaccine, guess he was having on the show other podcast.
Jurors, did the same more news about Rogan’s.
Worst moment in the pot or coming to light, his liberal use of the n-word, for example, and it Sparks a flood of people loudly announcing their intent to cancel subscriptions, not to mention, by the way, reportedly pissing off.
A lot of people within the company who, you know, might not be pumped about their employer, paying a hundred million dollars to someone Fanning the Flames of vaccine Denial on Sunday, this past Sunday, Daniel Eck, who is the CEO of Spotify, published his latest memo to the company and Kevin and I are going to talk about that now.
Now, in just a few minutes, but first, I want to make two points.
I want to talk about responsibility and consequences.
Number one responsibility.
Joe Rogan is a kind of Genius.
He has earned all by himself.
The largest one man, Independent News audience in the world, but the price of an audience is responsibility.
Rogen is responsible to his listeners.
He is an obligation on their behalf to seek out the truth.
With just as I do.
And this is the truth at this moment.
Unvaccinated Americans are dying at a rate, 20 to 80 times higher than the boosted a person as curious as Joe Rogan should be awfully friggin curious.
Why his guests keep saying the vaccine doesn’t work.
Just as unvaccinated Americans are dying of covid, 70 times more than the boosted.
Number two is consequences.
It’s very easy for people like me to be angry at the worst things to Rogen has ever said, because there are a lot of things that can arouse that particular emotion, but at some point, people like me spending their time, spelunking for the worst recorded moment in Rogan history.
Need to ask themselves the following question.
What do we want?
What is the outcome that we’re rooting for?
I’ll go first.
I just want more people vaccinated.
That’s my North Star.
And if liberals succeed in ticking Joe Rogan off Spotify, what’s going to happen, if something like this Rogan, Unbound, pissed off becomes a louder more contrarian version of himself with a bigger audience Rogan remaining on Spotify within a publicly accountable company.
Whose leadership is clearly at least somewhat sensitive to critique and is willing to impress.
Those criticisms on Rogan.
That is our best case scenario.
That is the best case scenario for people like me who want Rogan nudged toward responsibility.
Because this is the bottom line of Fame.
Joe Rogan has 11 million listeners, and I do not and you do not.
We can’t change his audience.
I just hope you can change his mind.
I’m Derek Thompson.
This is planning.
Kevin ruse, our first three-time return guest The plain English podcast.
Welcome Back Sir.
Wow, I feel like I should have a special equity in the show or something like that at this point.
I mean, basically our show.
Yeah, we’re going to send you some merch.
Some plain English hats and t-shirts, expect that in the mail.
Very, very soon.
Let’s jump right into the news.
I’m going to start with the latest chapter of The Joe Rogan Spotify Saga.
Daniel a kick CEO of Spotify, which again, owns the ringer podcast Network sent a memo to his staff on Sunday, and he called Joe.
Egan’s comments including his use of the n-word incredibly harmful.
He said he strongly condemns which are Rogen is said, he said he had conversations with Rogan and his team about the content of the show, but also said, quote, I do not believe that.
Silencing Joe is the answer and it can slee voices is a slippery slope.
He’s committing a hundred million dollars for historically, marginalized voices, and the audio platform.
And as I say these words to you, now, Kevin, my timeline is still melting down with new Joe Rogan news, including the fact that Donald Trump’s New Media.
Has offered Rogan 100 million dollars to jump to their somewhat make-believe platforms.
So taking all of this in and synthesizing, it incredibly efficiently.
What did you make of Daniel X statement?
Well, I think in general, I mean we’ve watched enough of these kind of content.
Moderation controversies over the years that I’ve sort of developed, like a kind of framework for understanding them like almost like anatomy of a cancellation and And I think, you know, from where I sit like there are basically three stages to every content, moderation, backlash, controversy, Etc, first, and I made sure they all start with the same letter because I know you love a good alliteration.
I love a good alliteration.
Thank you so much Kevin.
So the first stage is the Splash and that is you know, what?
We are past that stage.
That is basically where something that someone high profile says on their YouTube channel or their Pastor or the TV show, sort of attracts an audience, that is not their typical audience.
So, there’s sort of a crossover moment and I saw this most clearly a few years ago, with Pewdiepie is the big big time YouTuber and kind of had a mini version of what’s Happening happening to Joe Rogan now.
His odd, you know, he says something has some outside his audience.
In this case, reporters sort of notice and, you know, becomes a story and that’s sort of the the Crossover moment that we had with this.
Robert Malone episode of The Joe Rogan podcast that initially got the attention of Neil, Young and Joni Mitchell.
And all these people who wrote in saying that he needed to do, a better job of policing covid misinformation, and let me just quickly stop you, there just to elaborate there before you keep going on going with the esses.
Robert Malone is a self-described inventor of the MRNA vaccines.
He did publish a paper in 1989 showing how RNA could be delivered.
Two cells using lipids tiny pieces of fat.
The papers are important works, but he now is using his like tiny station along the assembly line of progress for mRNA.
Vaccines to give people a bunch of frankly, totally bullshitty warnings about how the vaccines are going to kill you.
That’s Robert Malone, please, Kevin continue.
So that’s stage.
Is the splash stage 2 is the snowball and we are firmly in snowball territory.
Now, this is, you know, Neil Young Joni, Mitchell, brene Brown.
I’m all kinds of people, you know, India Arie was the most recent one.
I saw who pulled her catalog off Spotify, or at least registered some displeasure with their decisions about Joe Rogan.
And so I think, you know, that’s the stage we find ourselves in.
Now, I think Daniel Act is trying to basically get out of this without having to make a costly decision one way or the other.
And so he’s doing, you know, I don’t know if you remember a few years ago.
Mark Zuckerberg was under a ton of pressure to do something about political speech on on Facebook and politicians, lying and posts and ads.
And he went out and he sort of gave this big like speech at Georgetown where he stood up on a Podium.
He said, you know, I am a defender of free expression and we will not be policing the speech of politicians.
The answer to bad speech is good speech, you know, etc, etc.
All the things that we see every time one of these controversies comes up from the CEO of the of the platform.
Um, and so I think in a lot of ways this letter that came out over the weekend was kind of Daniel X Georgetown speech.
It was his attempt to say, here are our principles.
We are going to stick to them.
We are not going to back down and we are not going to, you know, D platform.
One of our most popular voices and that’s right.
Energy works until it doesn’t.
Because in many cases what happens is from there, the snowball keeps rolling, the pressure keeps mounting the board gets.
Involved their advertisers that are objecting employees including, you know, what, we’re seeing at Spotify now, is a lot of the content is being driven by employees.
When you notice Daniel X, letter was addressed to employees.
So they have a lot of Leverage, and they’re going to keep pressing, I imagined.
And so, then you have the third stage, the final stage of the content moderation, controversy, which is the surrender and and this is the point at which Things become so intolerable.
For the people or person in charge of the platform or the person who, you know, in this case, Joe Rogan that someone backs down, it becomes untenable to do anything other than sort of let one person Fall by the wayside.
So, in this case, I think there are a couple options.
One option is Joe Rogan surrenders.
He basically says, look, I crossed the line.
I need to dial it back.
I will bring on more.
Mainstream vaccine experts.
I will make sure that everything on my show is fact-checked.
I will make sure that I’m not disseminating incorrect information that could cause people to make bad decisions about this pandemic or Spotify backs down.
They say, you know what, it’s not really like this guy’s very popular but he’s causing us so much damage.
That actually the cost of doing nothing is higher than the cost of just letting him out of his contract.
You know, they let him out, he goes back.
To YouTube and apple and all the other places that he used to distribute his podcast and Spotify moves on, she of the splash, the snowball, and the surrender.
There’s aspects of this that I think are absolutely brilliant is actually aspects of it that I kind of disagree with, but let me build up to it.
So, first off, when I look at the Spotify announcement, the first thing that I thought, when I saw it was, I was like, this announcement is so Spotify, like Spotify is big and successful because every musical genre and the world exists simultaneously within the same.
Run and then you like statement was kind of like an attempt to represent every single political agenda within the same platform.
Like there are certain choices that the company has to make.
Do you content you condemn Joe Rogan or do you stand by him?
Well, this was a statement that kind of both condemned him and stood by him.
Do you sensor Joe Rogan?
Where do not censor him?
Well, again, there’s a bit of cake and eating it too.
They didn’t censor him.
They did not censor him, but they did speak to him and he chose by his own account to remove more than 100.
Zodes of his own podcast, he chose self-censorship.
Another question is Spotify and editorial publisher of Joe Rogan.
Or are they not a publisher of Joe Rogan?
Well, again there a neutral platform.
Okay, that also pays individual creators 100 million dollars to license their work exclusively.
That also holds conversations with them in ways that causes the talent to delete several hundred hours of content like that.
That sounds kind of publisher e.
So like what I see when I think about Spotify is this like, incredible.
Credible, impossible, tension that is, made Bear by the letter itself.
A commitment to free speech, and a commitment to being a neutral platform, and a commitment to some kind of Truth is just really difficult to hold in the air at the same time without slamming against each other.
And right now, they’re standing against each other in a very snowball.
They kind of way.
But Kevin as a media historian who has seen these things play out before.
Sometimes, it’s a Facebook, Alex Jones situation, where the person’s Get off the platform, but there are some cases aren’t there where the star remains on the platform, where rather than the surrender?
It’s the forgetting.
I don’t know what the S Cinema to them is, but it’s the, it’s the appeasement, the forgetting the, the slow end of the controversy where people complain.
They complain, they complain.
But then Dave Chappelle remains on Netflix and the media cycle moves on, is it possible that that is the end of The Joe Rogan controversy?
It is certainly That’s what we saw with Netflix and Dave, Chappelle people were very mad for a couple of weeks and then they seem to have moved on and he’s still on the platform and, you know, they didn’t, they got out of that one without having to make any hard decisions that could cost them business or employee loyalty or anything like that.
I think what that sort of why I don’t think that’s likely this.
This time is because I think that Joe Rogan himself It is less like Dave Chappelle.
Then he is like Donald Trump or Alex Jones and what I mean by that I’m not I don’t mean ideologically.
I’m or mean like temperamentally.
I think that Joe Rogan is someone who, you know, I’ve been listening to this show for a long time and I have sort of watched him evolve from kind of this.
Like, every man comedian into really a committed and bought in sort of culture War participant and, and general in the culture wars.
And I think now he has a substantial part of his audience is 11 million listeners to every episode, or whatever, that expects that from him.
That doesn’t want him to back down.
That doesn’t want him to moderate himself.
That doesn’t want him to invite dr.
Fauci on and, you know, moderate his stance on the vaccines.
And so, I think he will face enormous pressure from his own audience.
If he does moderate himself in the way that he would need to, in order to sort of pacify, you know, the folks who were mad at him now, so I think They can hope that this sort of blows over for a while, but there’s going to be a next time because this guy is, you know, putting out hours and hours of podcasting, every week.
He’s having, you know, controversial guests on all the time.
Somebody’s going to say something.
And then we will be right back here at the, at Phase 1.
The Netflix analogy is really interesting to me, for two reasons.
The first reason is an economic reason and the second reason is More of a cultural personality reason.
So first we are in the position that we’re in because of the media economics of companies like Spotify and Netflix.
These are really simple similar companies with a very similar content challenge.
Like when Spotify IP owed, a lot of people were skeptical about its long-term value, because the company didn’t own any music, like the music labels were paid.
Share of the revenue that Spotify earned and Spotify didn’t have exclusive access to anything.
So you could just switch to Apple music and listen to the exact same.
Stuff with the slightly different user experience.
So Netflix had this problem over a decade ago.
It was a buyer of all this content but it did not own its own stuff.
And the Netflix solution to this form to this problem was to buy exclusive shows that were popular.
And so Spotify, essentially pursued the audio version of this strategy by exclusive podcasts that are popular.
What’s the most popular or most searched for podcasts in the world?
It’s Joe Rogan least.
It is, give them a hundred million dollars.
They rent, excuse kit, exclusivity rights to his podcast.
Kind of the same way that television.
Channels rent Sports rights.
They like TNT or NBC doesn’t by the NFL, or by the NBA.
They rent for a nine year, period.
The right to broadcast those games exclusively.
That’s kind of similar to how Spotify structured this deal.
And now we’re in this position where they bought his popularity, but they also essentially bought the migraines that come with this popularity.
And that brings me to similar to number two, which is that both Rogan and Chappelle are what I’ve come to think of as Don’t give a fuck populists or dgaf populists.
There’s this brand of very online.
It’s kind of Centrist populist, contrarian.
That is anti PC.
Anti GOP, anti left.
Anti woke Pro.
Do Your Own Thing, culture, libertarian often rude, and it’s a really, really popular mode of political commentary.
So if your Spotify or Netflix and you want people, Hooked onto your big platform.
It makes sense to fish in this Pond.
But when you fish in this Pond, what you pull out is not just a bunch of subscribers that are super happy to listen to or watch Rogan to Chappelle, but you pull out all that public relations nightmare that comes from the very first thing that you said people who are not the Rogan Chappelle audience being exposed to their sometimes, merely rude, sometimes worse than rude, anti-vaxxer anti-trans commentary and it creates the public.
This nightmare that were in today, so just I guess maybe one more question to you because as I pull up this Spotify, Netflix comparison, I think well, why can’t if this matches beat for beat the Chappelle think so closely.
Why doesn’t Rogue why don’t Rogan’s capitulations already.
The fact he’s apologized.
He’s taken down these episodes already.
Why doesn’t that auger a resolution to this problem?
That is really, really similar to Netflix and Dave.
But I think part of it is because the nature of what Joe Rogan and Dave Chappelle do is very different.
I mean, Dave Chappelle might come out with one comedy special every year, right?
So, his sort of feedback loop of like I said something, people got mad at me for saying something.
So now I’m going to like show them that I don’t bow to pressure by like going by doubling down on the thing that I said that pissed them off in the first place.
Like that happens like on a very slow time frame.
If you’re Dave Chappelle because You have to wait for like, your next comedy special, and that could take months.
And whereas, like, Joe Rogan can be out there every day.
If he wants to be sort of in flaming this prodding, you know, people who are in his audience to like, take up, you know, sort of his cause like it’s a much tighter feedback loop.
And so I think he has much more and he also like just spends a lot more time talking on the microphone, then Dave Chappelle does.
So I think, I mean your, you could be right, it could be Over.
And that’s seems like it would is a likely sort of short-term scenario, but I think long-term this just keeps coming back and I was actually like, yeah, you called me a media historian, which I’m not.
But I did go back and I did do some some reading the other day.
When all this was going on about Howard Stern.
And who was essentially The Joe Rogan of the of the 90s, you know, he had the most popular Talk Radio Show in America by Leaps and Bounds hugely loyal audience. it’s, you know, obviously, like a shock jock and had a penchant for kind of tweaking, political correctness and like, saying, the thing that people didn’t want him to say, and Howard Stern was like, find millions of dollars by the FCC and and it well, in to be more specific, the stations that broadcast Howard Stern’s show were find millions of dollars by the FCC because on radio, those are publicly owned Airwaves and we’ve, you know, sort of decided that like the government Establish some content guardrails, you know, you can’t curse, you can’t, you know, there are certain lines.
You can’t cross on the radio with podcasting that all goes away.
There is no FCC for podcasts.
And I think that’s, you know, arguably a good thing.
But it does mean that those guardrails need to come from somewhere else.
They’re not going to come from the government, finding the radio station, you know, or Spotify, in this case, millions of dollars for what Joe Rogan says effectively the FCC is now just Twitter.
My Twitter is the Cece.
And so, when someone like Joe Rogan crosses a line, they are going to do, you know, whatever the FCC used to do in, maybe not finding Spotify monetarily, but causing economic consequences for this company in hopes that they will then reel in their big star.
So I just, I thought the parallel there was a little bit interesting before we move on.
I want to make sure that I get your perspective on what I think might be the most important question here.
Not just, how will this end between Joe Rogan and Spotify, but how should we want it to end?
Like just very limited Lee.
How should you Kevin?
And I Derek hope that this ends.
And when I think about this consequentially, how do I want this to end?
I want Joe Rogan to remain on Spotify and I want to tell you why.
And you tell me if you think I’m wrong.
If Joe Rogan leaves Spotify, he will be Unbound.
Untethered and pissed the fuck off at the left, his attitude toward the vaccines, or toward all sorts of other cultural sensitivities that I care about will not be Tethered to Liberal complaints.
He simply won’t have to listen to anybody to his left.
But as long as he is bound, and Tethered to a entangled with a Luckily traded company that is sensitive to public criticism.
Then there is a there is a channel for pro-vaccine sentiment, for example, to actually like, way on Joe Rogan to actually affect his content.
If you the whole calculus here is, liberals got upset, led by whatever Neil Young Neil Young pro-vaccine.
People got upset.
They complain to Spotify Spotify.
Talk to Joe Rogan.
Looking into his iPhone to millions of people around the world for an unbalanced coverage of vaccines.
I don’t know if he was sincere or not.
But that’s just what happened.
There’s no way that that chain of events, happens if he’s untethered from Spotify.
And so I think there is something consequentially beneficial.
Ironically about his relationship to Spotify that, maybe even a lot of liberals don’t recognize that they are screaming begging for an outcome Rogan being essentially fired.
That would be worse for their interest worse for the end of the pen.
I’m a queer sir.
People getting their shots.
How do you feel about that argument?
I buy it.
I mean, I also am worried about a situation in which Joe Rogan, you know, gets T platformed and becomes, you know, ungoverned and ungovernable and just goes off the deep end.
We’ve seen that time and time again with people people being, you know, censored and D platform has, you know, a radicalizing effect on them.
And that’s a good example of that.
I mean, I think you saw this with with someone like Donald Trump where when he started to get, you know, sort of slaps on the wrist from Facebook from Twitter, from other platforms instead of backing away from the edge.
He kind of said, well, I’m going to show them.
I’m going to go even further until they were sort of forced to do something about him.
I actually think that, you know, Joe Rogan is somewhat of an outlier in the media Universe because I think that his audience is genuinely portable.
I do think that, that millions of people will listen to Wherever he is.
I think he’s just that popular.
And so, I think, you know, he actually has some leverage in the situation that someone like PewDiePie, for example, the YouTuber if he loses his YouTube channel, like, it’s over for him.
And and so he’s highly dependent on keeping himself in the good, graces of the platform.
What does Joe Rogan?
I think can sort of take his listeners with him, but I do think you’re right to look for solutions that are not just kick this.
Die off or keep him on with no modifications.
And I think progressives in general should have been trying to persuade Joe Rogan much earlier than they were.
There was this very strange thing that happened.
I think it was in 2019 when you know, Bernie Sanders would go on Joe Rogan’s show or some other sort of like leftist would go on Joe Rogan’s show and people would be mad.
People would be mad that they went on Joe Rogan’s show.
Why are you Giving this guy content.
Why are you you know, why are you sort of making his show more prestigious by appearing on it?
And I always thought that was such a strange argument.
Like this is a guy who you know, it’s not like your platform and he has the biggest platform in America.
I think instead of try any any is genuinely.
It has demonstrated in the past that he is like genuinely open minded to learning and to being persuaded.
I don’t know if he’s still is he may have sort of past a point of no return on that, but I think Think that what you, what you saw was sort of a yeah, reluctance to treat him as a person who could be persuaded with good arguments and with, you know, sort of winning rationale.
And so I think basically the left kind of gave up on him and I think that had a really detrimental effect and may have, in fact, pushed him further to toward the sort of conspiratorial Fringe.
I totally agree last point on this.
Just biggest picture.
Joe Rogan is an adult.
He has an audience in the millions and a responsibility, commensurate to that audience size, which is to say an enormous responsibility to find and tell the truth and he’s not doing it with the vaccines.
He is neither finding nor telling the truth when it comes to vaccines and it just sucks.
It just sucks because thousands of people are dying every single.
Week of this disease where and they would be alive if they had two shots in their deltoid or three.
And we just need all the help that we can get to end this thing.
And in the biggest picture I suppose.
I just think that Rogan inside a Spotify is more easily influenced than a Rogan unconstrained.
Booted out of Spotify, setting up his own Media Company where he just rails against the left with no recourse from people like me.
Well, closing the rug and door for now.
Next Media gossip item is meta.
The company formerly known as Facebook last week.
Meta revealed in its earnings report, that Global users had peaked that Tick Tock is basically eating, its lunch in high Revenue markets, like the us and that new Apple privacy rules are hurting the ad business on iPhones.
The company suffered the worst one day market cap wipeout in American corporate history.
This is a fact losing. 150 billion dollars in stock value.
In one day that is equal to this total market cap of Cisco or Salesforce disappearing in 24 hours.
Kevin, what the hell happened here?
Meta the artist formerly known as Facebook is having a real product problem and has for a long time.
I mean, it’s most popular app.
Facebook is collapsing.
Organic content posting has been collapsing for for a long time.
Time, you know, sessions or down across most of its apps.
And the, you know, the Highlight that they were, you know, their attempt to kind of find a silver lining in these disastrous results that they shared a few days ago, was to point to the success of Instagram reels, which, like, I don’t know if you’ve ever liked wandered onto Instagram reels but it is like truly dystopian.
It is like, why were sentenced?
So, like 90% of the videos on Instagram, reels are just tick tocks, right?
They’re just, they’re just Tic Tacs with like the watermarks removed that were posted to tick tock.
See a tick tock, like months or years ago, just sort of being refreshed for the Boomers and the older Millennials on Instagram.
And then the rest are like these weird.
Like, you know, bottom of the barrel like comedy skits, and like, Like staged prank videos and like people having meltdowns in the airport and like it’s just like the lowest quality garbage and like there are no native reals producers.
Like no one is like making stuff for Instagram reels.
It’s like stuff that they made for YouTube and and and Tick-Tock and that they just are cross-posting there.
And so like the fact that that was the kind of thing that they were able to point to and say like well, this is Fastest growing product.
It’s like, oh, this company is in much worse shape than I thought.
I love the idea.
That Rios is like Turner.
Classic Movies for tick-tocks.
It’s like here are two hundred percent.
Here are Tic Tacs in the days of yore, from the black-and-white early, talkies days of tick-tocks rebroadcast, for geriatric Millennials and forty seven year olds.
God bless all the geriatric Millennials like me out there.
I’m not, I’m not dissing The Generation.
I’m just saying it’s a product.
It doesn’t sound.
Can you go back just a half step?
We know why face.
Book is why the app itself is collapsing.
I mean is, is the answer just as simple as Facebook needs new users to keep going and new users are way more into Tick-Tock than they are in to Facebook products.
Yeah, that’s a big piece of it.
I mean, the Facebook’s been struggling to compete with Tick-Tock for years, but that has really accelerated, especially with younger people in, in North America, who, you know, are it’s kind of most coveted audience demographic, Facebook.
I should say, is still very strong.
Like Even its weak results.
I was looking at their, at their financials the other day when they came out with their earnings report.
No good, very bad quarter that they had they still made ten billion dollars in profit.
Like that is a bad quarter to be Facebook.
This is a company that’s still worth 600. 32.5 two billion dollars is I check in right now at 3:35 p.m.
Eastern Standard Time on Monday.
I mean, it’s still the sixth or seventh biggest tech company in the world larger than any Tech.
But I believe in the entire continent of Europe.
So, you know, decline is always relative, right?
The fact that it had a huge this, this terrible day in the stock market doesn’t mean that I’ve ever to predicting like the end for this company, but it’s just it’s it’s fallen from its Fallen.
Very far from a high.
And, and I think to some extent Facebook has brought this on itself by treating kind of growth as the core metric for many, many years.
And their argument was, you know, networks, get more value.
Yubel as more people join them there for like every incremental, you know, 100 million users, we attract to our platforms, make the experience better for everyone and now they’re seeing the flip side of that which is that, you know, on the way down the network effect collapses, the network as people leave, you know, I don’t go on Facebook as much because in part none of my friends go on Facebook anymore.
So there’s sort of the other side of the network effect is which is what they’re experiencing now and I should say face Book would say that most of this result.
Most of its head winds as they like to say, are due to Apple and some of the changing transparency tools and tracking tools that Apple has implemented.
And so, they would say that that’s a big factor in it as well.
Just unpack that a bit Apple introduced something called app tracking transparency, otherwise known as a TT, not to be confused with AT&T, but basically it’s a it’s a privacy.
G, that makes it a little bit harder for Facebook to track users and make money through direct response advertising.
And so, this is one interesting way, that Apple’s should have public facing marketing of the company being pro privacy is also somewhat surreptitiously or maybe even purposely away for Tim Cook to fuck over.
I’m not suggesting that.
That’s an overriding motivation, but it’s definitely an outcome of that decision.
Is there anything else going on?
It’s important that we should do.
We should point to, when looking at, at Facebook’s headwinds.
You’ve got user growth hitting a ceiling.
The ATT changes that have made it harder for Facebook to advertise, especially on iPhones.
You’ve got Tick-Tock and reels being essentially Turner, Classic Movies for, for old tick tocks.
What about all this spending on the metaverse on and what Facebook calls?
Reality Labs, which is basically its R&D sector where it’s trying to build out.
This this next internet.
Is it meaningful?
The company is spending so much money on a metaverse that may or may not materialize that it’s hurting its profitability in the next few quarters.
I mean the there, the numbers every time I see them for for this metaverse push are shocking.
I mean, they’re spending billions and billions of dollars.
They have something like 20,000 people working on AR and VR Technologies at this point, which is like significantly larger than the entire employee base.
Of the New York Times where I work.
So they’ve got enormous teams work on the stuff.
They’re spending an inordinate amount of money developing it.
And to me like that suggests that this is their only way out that they see the metaverse as kind of, the only sort of plausible way that they can maintain their dominance into the next era of computing, you know, very few tech companies have survived, make the leap from one technological era to another, you know, Cisco Oracle.
You know, Sun Microsystems IBM, you know these companies, some of them are still around but there’s slivers of the companies that they once were and I think Facebook sees that, you know, it’s growth in its core social networking products has plateaued and is starting to decline and now it’s this is their big bet.
This is what there, they think, we’ll sort of save them from obsolescence and if you want to make a big bet like that, it’s going to cost you.
A lot of money and so they’re shoveling money out the door, they are.
And I think there’s basically an equal.
I think there are basically two outcomes of this one is you know, Facebook.
It’s metaverse strategy works and it is a dominant player in the next phase of computing and even more dominant somehow than it was over social networking.
I mean, it will own not only the most popular software, it will own the operating system and the hardware and it will have much much more.
Or behavioral data with which to Target ads, it will somehow grow even larger and more powerful.
The other option is that this this metaverse push just absolutely bankrupts them like, like that.
They spend so much money on it that it just puts the company out of business.
And I think that those things are basically equally likely it’s a 50/50 shot, the image that I have in my head and I haven’t, I haven’t isn’t quite crystallized like this until you were just talking, but it’s like, I’m imagining a city.
Let’s call it San Francisco.
That’s like slowly being eaten Away by climate change.
Like, a combination of the seas are rising and there’s whipping winds and tornadoes constantly over the peninsula.
The island itself is is Rich, but it’s slowly being destroyed by these Cosmic forces and they’re like, we’re going to build a new Francis San Francisco on the water on the ocean.
It’s me a brand new city.
One of the homeless problem is, we won’t have the NIMBY problems.
We won’t have any of the problems.
The San Francisco has.
We’re going to build this in the ocean.
And meanwhile, you have people whispering like No one’s ever successfully built a city on the ocean like this.
We have no idea.
If Building San Francisco in the ocean is even going to work.
And so it’s just this, like, fascinating utopian vision for building an entire new Facebook in this world.
And this layer of reality, the metaverse that may or may not exist in the future at all.
If it works, they own the whole city.
They built San Francisco on the ocean.
It’s the new American Utopia, but, of course, there’s just so little Evidence from today jet.
You February 20 22.
That the metaverse is a real thing that people want and I just find it fascinating like as a, as a matter of corporate history.
It’s really, really difficult to find a business that is this successful and this big and this will known as important publicly announcing that they’re kind of scrapping the land on which they are currently building and trying to build this whole new that you’ve sitting in the sky.
It’s, it’s really it’s fascinating experiment.
Even if you Is it 50% chance that it ends in humiliation of bankruptcy?
It’s totally fascinating.
And I think it is a direct result of Facebook’s concentrated governance.
I mean most public companies, you know, with Facebook’s size and and, and wealth would face enormous pressure from shareholders and, you know, and to cut their costs to trim the sails to, you know, stop bleeding money in these like, you know, far-fetched, VR and AR projects, which is Ey.
The the most sort of frequent as sort of a result of a company that has passed.
Its peak technologically is that it just sort of bleeds out slowly, you know, it’s got this sort of terminal decline, you know, it’s sort of doing everything it can to like conserve cash and do layoffs.
And Facebook is basically saying no like we are not like you it’s like it’s almost like, you know a patient with a terminal diagnosis and the doctor says, you know you have you have five years to live unless you.
Like try this incredibly risky experimental procedure which might just kill you on the operating table or it might Grant you another 40 years of life.
And the patient in this case Facebook is basically saying like yeah, let’s go for it.
Like, let’s try the super weird dangerous experimental thing because the alternative is becoming friends to or Myspace, and we can’t have that.
And just like that.
We’re another Spotify podcast recommending alternative therapies gonna put in this close.
Here at the top to make, absolutely sure that the Daniel that’s an end up having to write about this episode as well.
Very last media gossip piece.
Kevin that I want you to comment on there was a blockbuster report and BuzzFeed news that revealed the names of the founders of the board.
A pyat club.
That is the most expensive nft collection in the world a collection of simian ape avatars.
Essentially, that celebrities Often by for hundreds of thousands of dollars a piece and Location of these Founders names kicked off a big debate about the sort of this tension that exists between web 3s and ft is promise of anonymity.
On the one hand and the reality.
On the other hand at the job of Journalism in the media is often to report on powerful Rich famous people, which in this case means revealing the names of the founders of an organization that probably wish to stay Anonymous or pseudonymous.
What is most interesting to you about this story?
Well, there’s a lot.
To go over there.
We could spend another entire hour talking about the board, a Piat club and the pseudonymous.
Founders, who are, I guess?
No longer a pseudonymous.
But basically there was this report and BuzzFeed.
I’m Katie in a topless, you know, reported on the the real names of the some of the founders of the board API club, which is a very sort of well known well established and extremely wealthy, sort of collective of nft collectors, who all own these like little, you know, monkey pictures and Jimmy, Alan’s got one and Paris, Hilton’s got one, and it’s become sort of a status symbol in the crypto world.
And I think the interesting piece here.
They’re a couple one, is that I think the crypto world is just sort of struggling to adjust to the reality that it’s sort of emphasis on anonymity and the ability to kind of do transactions in a way.
That’s Anonymous has a limit right if you get Get wealthy enough.
If you get influential enough, if you’re trying to raise money from traditional investors, if celebrities are buying your projects it no longer is really tenable to stay Anonymous to just be some, you know person with a username on the internet and that’s what happened.
In this case.
I mean this company was incorporated.
This you go Labs, which is the sort of company that makes the board API Club was trying to raise money from Venture Capital investors, edited at a deal that would have Valued it at five billion dollars and and to do that to like raise money from institutional investors.
You need to have a corporation and that Corporation needs to have, you know, filings and needs to have officers and needs to have people whose names are attached to the project.
It has to kind of exists in the in the real world in a way that a lot of crypto projects don’t want to.
So, I think we’ll see this, really interesting tension.
There’s a lot of really interesting stuff happening in the crypto world right now about anonymity and And the and the sort of value and some of the drawbacks of being able to build in some cases, five billion dollar businesses without revealing who you are which was never really something that we had pre crypto.
So yeah, it’s just it’s a fascinating sort of inflection point for the crypto world as a whole.
Yeah, I think, what’s so interesting is that some of the smarter people that I follow in the crypto Community, they really they don’t just want to build a whole new internet they want to build.
Whole new country, a whole new reality, a whole new set of rules to govern human relations.
I mean, if it sounds grandiose to put it like that, I am framing it less grandiosely than it’s typically framed online.
Like they are they are open advocates for using this technology to reform human relations.
And one of the ways they want to reform, humanity is to empower.
This kind of sadhana - layer of reality.
This, the sadhana Miss internet.
Where people People’s identities are not as public as they are, but that’s just not how journalism Works, jefra Courvoisier.
Deputy business editor, Los Angeles Times.
Made a really good point on Twitter, where he said, look the board of she got Club Founders.
Haven’t done anything wrong.
But quote Journal is published information about public figures.
Who have done nothing wrong all the time.
If it’s newsworthy think of a star athlete getting offseason surgery like they like to keep quiet or a celebrity buying a big house.
The point is I think lots of Listen this podcast for familiar with the ringers other offerings.
You’re very familiar with the idea of an athlete trying to cover up a leg injury, who ends up, you know, getting reported that they did in fact sprain their ACL and they’re having surgery in the offseason.
This happens all the time because their prominence, their importance, elevates them above, the threshold of expected anonymity.
We don’t publish the names of people who aren’t publicly important who aren’t probably newsworthy, but we often do public the name.
Publish the names of those who are and clearly.
The crypto has passed above that threshold to a point where I think there’s going to continue to be.
This is why the BuzzFeed article has been assured me.
He will continue to be showdowns between the media that holds up the the the principle of wanting to to publish that, which is newsworthy.
And members of this community who are trying to build a world where their identities, or their pseudonymity is is, is written into code, is is a critical part of this.
Reality, they’re working on.
I don’t know if you agree with, with that General framing.
Yeah, I think this is going to be the first of many blow-ups between the media and the crypto Elite over this exact issue, whether it’s okay for people to remain anonymous when they’re involved in projects, you know that are raising billions of dollars that are you know, I mean the the sort of it’s really quickly actually.
Look what is what’s the most interesting stuff that they’re trying to do anonymously?
Like what, what is the It’s the strongest argument for those who truly believe in building an anonymous internet.
What’s the best case they have for, why the future of the internet should be anonymous.
Well, I think some people have, you know, very ideological reasons for wanting to sort of this crypto pseudonymous internet to remain pseudonymous, you know, they don’t want to open themselves up to cancellation or sort of being fired from their day jobs when their bosses, you know, find out that they’re running some crazy nft Collective.
Or but I think they more see this sort of heading in a direction where everything that we do online.
All of our sort of digital activities will be United, not under our real names, Derek, and Kevin.
But under our screenings more like what happens in say, the gaming world, where you have your Gamertag and you know own assets and your gamertags name and you know, people know you by that and so it’s more like that.
And I think the argument for that is that you know, we are Our privacy is important, you know, we have seen, you know, sort of what happens, you know, on a in a sort of Internet culture where people are constantly sort of being cancelled or, you know, held to account for things that they say and do.
And that basically crypto should adhere to a different set of rules and exist in this sort of parallel namespace where no one knows what anyone’s real name is because they’re all just going.
They’re sort of crypto names and avatars, right?
I’m sure some people listening are like well, yeah, one person’s privacy is not that person’s right to commit crimes without with that being called out.
So there is not that the people working on crypto are working on it for the purpose of committing crimes.
But we’ve already seen the crypto is place where there are scams place where crimes are committed and clearly pseudonymity.
And animated anonymity are are things that that allow certain crimes to be to be committed under dark.
Kevin, thank you very much for joining the podcast again.
I hope that you’ll be the first quadruple, repeat guests in a few weeks, but I was give it going.
It’s great to talk to you.
Planning this with Derek Thompson is produced by Devon.
Thank you so much for listening this show.
If you like us, follow us on Spotify rate and review on a podcast.
We will be back with our second episode this week.
We will see you then.