Pivot - Netflix Shakeup, More Tech Layoffs, and Guest Cory Doctorow

Episode Date: January 24, 2023

Biden will get a new Chief of Staff, the U.S. Attorney has questions for Amazon, and Elon takes the stand. Over at Netflix: strong subscriber growth, and Reed Hastings is out as Co-CEO. And of course, more layoffs. Then we’re joined by Friend of Pivot Cory Doctorow on his new book, “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We’ll Win Them Back.” Cory is on Twitter at @doctorow and you can find his book here. Send us your questions! Call 855-51-PIVOT or go to nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Cara Swisher.

And I just had my play date with your friend here. Oh, good. The tough guy act that Kara puts on. She's actually quite worried about me. And you're actually very maternal. And she's been setting up a series of play dates for me. And I had my second one today. Patty? Yeah, with Patty. How was that?

So, yeah, he's a very impressive man. Isn't he? I thought you would like, he's very tall too. I thought you? I thought you would like him. He's very tall, too. I thought you'd like that. He's tall and classy. He's very tall. He's very handsome. I like to hang out with people better looking than me. I try to think these things, too.

This is Paddy Harbison. He was essentially the comms person for Prince Charles, but much more than that. He's a very high-level comms person. And the real one. He was the head of comms for Manchester United. Yes, I thought you'd like that part. I work on these things. I try to set you up with people. And he was the head of comms from Manchester United. Yes, I thought you'd like that part. I work on these things. I try to set you up with people.

And he's just sort of cool. He was on my podcast talking about Prince Harry, the book and everything. And he was quite, for someone who worked for Prince Charles, he was very even-handed, which I was surprised at. So it was interesting. He's a sharp, sharp comms strategy kind of person that I thought was great. No, I'm assembling my cancellation team. He's going to handle my PR, my calm strategy. Yeah, well, I'm glad you're making friends.

I have more friends for you to meet, and I'm just selecting them carefully. I don't want to have anyone you're not going to do well with. I know. Well, I do it for my kids, so I know how to do children, how to get children happier into their surroundings. Anyway, Alice got into a couple of colleges. I'm not allowed to talk about him, but he's now relieved. Did he get into... I'm not telling you.

I can't tell you. I can't. You won't be mad at me, but I'm glad he's relieved. He thought he wasn't going to get into anything and he's already gotten into two, which is great. I'm very happy. That's great. Well, he should know that it was really a function of his excellence and the fact that he has rich parents. But congratulations, Alex.

No, it was not. He really got great grades. And Louis Swisher got straight A's at NYU. So I'm very happy. They all get straight A's. Every high school kid gets straight A's now. No, they don't. Not Louis Swisher.

So I'm going to celebrate my amazing children. Did he get into any good public schools? Yes. Yes. Really? Yeah. Yeah, that's where we're aiming. That's the real test.

We're aiming at those. The public schools try and stay, they haven't lost the script. They're actually looking at kids based on their merit. Most of the ones he applied to are public schools. He wants a big public university. Yes. Yes. He doesn't like the Ivies.

He does not like. I can't believe he hasn't called me about this. This is one of the few things I know a decent amount about. Yeah. He doesn't, hasn't interested in what you think or what I think. He did it all himself. He's an amazing kid. Good for him. Anyway, there's a lot to talk about.

Thank you. I'm very pleased. And Clara made a lovely crown at school. It was very nice. I was very pleased with that. So there we have it. And Saul's walking. Well, we're all caught up on the kids.

Caught up on the kids. Anyway, today we'll talk about Netflix earnings and a high-profile departure. Also, layoffs hit Google as the company calls in some big guns. And we'll speak with author Corey Doctorow about how big tech robs artists and content creators. First, Jeff Zients will replace Ron Klain, who I actually know pretty well as President Biden's chief of staff, ahead of a likely reelection campaign and a probe of Biden's mishandling of classified documents. Zients, formerly served as the COVID-19 response coordinator for the Biden administration, did a pretty good job. Klain, who's been with Biden forever, also has been in tech, that's why I know him, plans to leave after the State of the Union in February with the longest lasting first chief of staff for any Democratic president.

Very calm, not a lot of, like it wasn't, certainly wasn't Trump's first two years. So any thoughts on this? Everything I've read about him, he kind of describes quiet power and sort of a behind the scenes power player and very well liked, very savvy. It sounds like it's a loss for the administration because it sounds like he did exactly what he was supposed to do with a lot of, that's a tough job, right? Yeah. Oh, yeah. You have to like – well, he's got a reasonable person he's working for.

So, it's not like he has for crazy things in the middle of the night kind of stuff. But, yes. I mean, the only thing about this, and I happen to think all these people are very confident, is that you would wonder – he has to sort of stick with his guys. He has his guys that he's had forever. And speaking of friends, like playdates, and that's all he could, that's how he goes to. And I get that when you're president, it's who can you trust rather than people who are in it for something. And I do think the Trump administration and many administrations are full of people who want to advantage themselves constantly. I think these people are, have been with him. And that's, I don't, I think about that a lot with tech companies, too, about the people around people.

Enablers, as you know, is an issue. We've talked about it at Twitter. It's happened at Google and Facebook and stuff like that. Just interesting. Well, look, I think most people would agree that one of the president's real victories is that he's – and maybe it's just contrast to the previous administration, but he surrounded himself with a lot of competent people. Yeah, yeah.

And that, you know, team of the best players wins. Not shit, not jazz hands, not a lot of Omarosis there. Anyway, speaking of enablers, Musk is not talking about Twitter this week, but he's talking about his tweets, the funding secured tweets in court. He's in court in the San Francisco Bay Area. As a reminder, the Tesla CEO tweeted at the time the deal to take the company private

at $420 a share was confirmed. The claim was false. The deal didn't happen. Musk testified that it's difficult to link Tesla's stock price to his tweets. Of course, then they had someone doing just that. He said that short-selling should be made illegal, referring to those who do it as bad people on Wall Street. That may be. It has nothing to do with this. He was trying to battle short sellers, I think, in that regard. And then he said people shouldn't believe his tweets.

Trial's continuing. He's not done yet. I think he's testifying some more today. I don't think he came off particularly well, but that's an interesting defense, a novel defense. Don't believe what I tweet. Let's look at these statements. He testified that it's difficult to link Tesla stock price to his tweets. No, actually, there's statistical, there's all sorts of evidence backed by- Yeah, the investors had that. They had those people. But go ahead. The moment he said that, the stock skyrocketed.

There was no other information. Yeah, hitting the short sellers. We live in a society where the CEOs of publicly traded companies are expected to tell the truth and not issue false information that if the market goes down as it did last year, that the firemen and school teachers and firewomen who have invested with that pension fund don't get hurt as badly. So shorting is just a component of the market. So what happened when he put out that lie? And let's be honest, it was a lie. People who were short got burned. People who thought, oh, maybe this is the maximum number the stock will ever go to because it's being bought. I'm taking a private. Maybe I sell my stock and the stocks went up.

I mean, this is the bottom line is a lot of people were taking actions that may or may not have benefited them based on the statements of a CEO who is expected by law to tell the truth. So this hasn't gotten a lot of coverage. Everyone's obsessed with Twitter. Yeah. But I'll ask you this. What other CEO has gone in a public format and said the company is being taken private at this number and I have the funding security?

And as many people that want to be involved with him, want to be in his next deal, want to provide financing, no one would actually say, oh, yeah, I can see why he would have thought that we were funding it. Yeah, he's saying he thought it was done deal. He still shouldn't have tweeted it at all. I mean, besides, he's doing all these excuses. I thought it was a done deal. The Saudis were in, but then they were out. You don't do it at all. And then you don't do it if you don't know for certain, something like that. And even if you were doing something to, I think he was trying to screw the short sellers. I think that's what was happening here. So that's what he was doing, but

he can't do that. He just can't do that. I think he's probably going to lose this trial, and then he'll continue to litigate, I'm sure. It would be striking if he wasn't found and severely, have a pretty serious settlement here, because you could argue so many different ways that so many different people and organizations lost tens of billions of dollars here. And you have as someone who has been on, you know, in and on boards of public companies, you have to be correctly so careful about what you say because you don't want to give people misleading information. And, I mean, I'm talking about even – I remember I was on the board of Eddie Bauer and we were doing an earnings call. Wow. Remember Eddie Bauer? Yeah, I remember.

I can't believe you're on the board of Eddie Bauer, but go ahead. Anyway, I was on the board of Eddie Bauer. Very nice of you, Seth. Yeah. And the company was doing really poorly and we were about to go – we were contemplating a bankruptcy filing. Yeah. And the company was doing really poorly and we were about to go. We were contemplating a bankruptcy filing. Yeah. And we and we had our annual meeting and 100 people showed up to the annual meeting. And the CEO, we were viewing the script of the CEO and the CEO was immediately breaking the song about what a great brand it is. And my boss, you should say nothing because anything that even indicates things are going well. Yeah. Maybe some guy or gal in the audience goes out and buys stock, and tomorrow we might file bankruptcy and the stock goes to zero. You just, but that's how thoughtful you need to be. That's what happened to Bob Chapin.

Remember what was going on about Disney when it was, right then when he was reporting bad rules? Yeah, you really, this guy doesn't have any kind of governor on himself. He is just an id tweeter, and that's still no excuse. That's still no excuse. And by the way, he can't, if he loses this and it's a lot of money, he can't afford it. Twitter's $300 million interest payment is due. Let's be clear.

They have the money due that they have with cash flow. They've also got a loan that they can borrow, $500 million credit line, essentially. So they can pay this thing. It's just it'll put them further into debt. And then he'll have another one in another couple of months. And so it's going to be sort of a, you know, hide the whatever, whatever you hide, hide the sausage, forget the game. It's going to be a, try to try to pay this thing over and over again. And at some point he's going to run out of space,

presume, unless he dips into his own money and that'll affect his other shares, whether it's especially Tesla. My dad used to tell me that the rich live hand to mouth as well, just on a higher level. Yeah. And it strikes me the same thing as here because you have the third wealthiest man in the world is in a cash crunch. He has, based on the stuff I've read, he has the money to make this payment. Yeah. But he has a company that is unsustainable. He has a company where 50% of the total revenues are going to have to go to interest payments, which means his company does not work. And so he either need to – there's really – I can't see him going down to, what, 10% of the original staff.

He's down to 25%. So it's going to be hard to cut more costs. So he's going to have to come up with something that grows revenues. And that's conceivable. Maybe he'll come up. Let's help him. What? Well, at this point, he doesn't have time to do anything that significant. I mean, it sounds very boring. What he needs to do is play nice and kiss some serious advertiser ass right now and try and get the people who are already used to spending money on the platform back on it. Yeah, they can come back if it's fine, if it has efficacy. They'll come back.

But that's my point. That's the shortest route between points A and B. He needs to get revenue in the door immediately. Yeah. And anything around subscription at this point or AI or whatever jazz hands we want to talk about will take years in additional investment. Yeah, it's an erosion of equity for sure for the people who own it. I mean, it's going to go – most people think it's to zero anyway, the equity he has, given the – like, it's not worth anything. But at the same time, he's really got to keep – get money in the door.

They keep talking about this subscription thing isn't working, long-form tweets. It's all long-term and difficult to build those businesses and really hard. I think advertising is his only – quick revenue, quick fix revenue, for sure. But this notion around CEOs and their communications, imagine a CEO is about to leave a company and he's going to retire and he's got a bunch of options vesting and he wants to sell them and he wants to set himself up. If that jury doesn't find Elon Musk guilty and hit him pretty hard,

what's to stop every CEO on the date of their vesting or when they're about to sell shares from going, oh, guess what? We're in talks to take the company private at an 80% premium. I mean, at some point, nothing any company CEO will say will be believable. Right. And what's to stop any of them from going, you know what? Well, his argument was like, most people don't believe me because I'm such a non-unbelievable. Most people don't believe me.

That was essentially what he said, I think. I wasn't quite clear what he was saying. Well, that's not true. The markets do believe him. Yeah. When he says, when any CEO, including him, of a public company says, I'm taking the company private at $420 a share and the funding has been secured. The markets take that seriously. Yes, I agree. I agree.

Anyway, lastly, one thing that I do think is unfair, I have to say, and I usually don't take Amazon's side here, but the U.S. Attorney's Office in Manhattan is investigating whether Amazon downplayed a poor safety record in order to get credit from lenders. The investigation makes use of a law from 1989 that could allow the government to bring a civil case against Amazon. They should focus on the safety record of whether they told the truth and they should focus on lenders. But this seems like a turducken to me, a legal turducken, but I don't know about you. I agree with you.

I don't – when I read it, I had trouble understanding it. And it felt like that big tech has become such an enviable or easy punching bag that this is – it just felt like overreach to me. They should do it against markets. They should do antitrust. They could look into safety. You know, these are all – it's like sort of those omnibus bills that they shove everything in. It just seems a turducken, legal turducken. Anyway, I like a turducken.

Have you ever had a turducken? Have you ever done that? I did know what it is. I don't know what a turducken is. I don't know what a turducken is. You don't know what a turducken is. I think this is you showing off your Georgetown medals. No, it's a food thing. You put a turkey.

Oh, a turkey and a duck? Duck and a chicken. You put the chicken and the duck, I think. You put them all in the cavity of the turkey, but one inside the other. It's really kind of sick in the head. And then you cook them all. Turducken. Thank you.

Nice. Yeah. Yeah. It's lots of meat, but it's really propulsive. Anyway. It's like the Long Island iced tea of fowl. Just put everything in there. I kept looking at Turducken. Anyway. All right. Let's get to our first big story. Reed Hastings could be the gray man of Netflix. That's a joke about a show they have. Hastings announced his departure as co-CEO last week. He will be replaced by the company's COO, Greg Peters, and Ted Sarandos will remain as co-CEO.

The news came as Netflix reported its fourth quarter earnings. Let's look into this glass onion. The service added more than 7 million subscribers, beating expectations of 4.5 million. Netflix hasn't said how much of that growth comes from the new ad-supported tier, but Netflix doesn't want to talk subscriber numbers. It's no longer issuing guidance there. It's focusing on a kaleidoscope of their finances instead, but still earnings per share were down more than 90% from a year ago, and the company slightly missed on revenue expectations. They're sort of trying

to build this business. I think that's fine. It seems like it's off to a good start with Microsoft as their provider. And this co-CEO thing still confuses me. Hastings, of course, as we talked about, has a long and august history. He's done a great job, his work, but he's still there as executive chairman. So they have probably a very involved executive chairman and two CEOs. And I guess Sarandos couldn't just have the single one. I actually like the co-CEO thing. It's actually a pretty smart strategy because it doesn't give any one employee too much leverage over the enterprise. I guess. And when they get along, it seems like Reed and Ted had a nice partnership. But we've talked about Reed a lot. And I've always thought, well, Reed gets a lot of warranted credit. I still don't think he gets the credit for his role

in changing business. I think what he accomplished is nothing short of remarkable. Think about it. He was doing DVDs by mail, and he had this vision of broadband. But his vision of broadband was the U.S. Postal Service. He said there's a million people delivering content to 100 million homes. That's the broadband infrastructure we want to leverage. And then we saw actual broadband come into the market. He moved into it. He had the greatest pivot probably in business history. Yeah, for sure. And then he was the first major player to go vertical content with House of Cards. I mean, these guys have always been sort of one step ahead. He's quite good. I think the move to advertising was smart. I mean, these guys have always been sort of one step ahead. He's quite good.

I think the move to advertising was smart. I think it's just what's happening inside. I mean, I think people were wondering why Sarandos didn't get the single CEO ship, probably he himself. He said he's gotten used to it. He expressed a little bit of surprise, I think, in one of the interviews.

And, you know, he has a little reputation for greenlighting everything, and some of them are poor performers. I'd like to shed some light, though, on one thing. They moved Bella Bejaria, who I've done an interview with, who I think a lot of. She was promoted to chief content officer. She was running the television part, and then a guy named Scott Stuber is running the film thing. He's reporting to her.

You know, one of the things that really drove me crazy is a lot of the media was going, oh, they had to put her name in for a diversity thing. This is the woman who got, you know, I'll go back, Squid Games, Indian matchmaking. She did Wednesday. She did all kinds of things, Bridgerton. She got great stuff. She did Dahmer. All the big hits there are her team, essentially, across the globe. And they just profiled her in The New Yorker as someone who likes commercial, popular stuff. And it was a weird article, I thought. But she's certainly been behind a lot of their success. Now, a lot of people say, why wasn't she made a co-CEO? That is an excellent question. But certainly- Well, clearly, because she's a woman, as you're implying.

No, I'm not implying that. No, no, no. I don't know. Why are we talking about this? Because a lot of the coverage, let me finish. I'm sorry, go ahead. She's in the press release or got this thing because of diversity and because of being a woman. She got the job because she's talented, period. That's what I'm saying. But a lot of the media coverage is still done by guys.

I'm sorry. And a lot of people I regard well were like, oh, she got it because they put her in there because that. Well, maybe they put her in there because she deserved the job. It just drove me crazy watching the coverage because she certainly, of all these people, she's had the most hits for them, which is interesting. Not just that. To your point, she did that great Netflix series about Abraham Lincoln. I don't remember. Yeah, don't you remember the finale was shot before a live audience?

Oh, my God. Oh, my God. That's good. You're such an asshole. I'm trying to say. That's good. No, look, she's doing a lot of,

she does stuff that's premium and commercial. She did Love is Blind, Selling Sunset, but also is doing this three-body problem with the Game of Thrones people. Like, I just feel like

it's, I was watching You wanted her to be a co-CEO. No, I didn't want her to be a co-CEO. I just didn't want them to then, if she wasn't co-CEO, to say she's on the press release because of this. Who said that? Lots of the coverage. Lots of the coverage I was reading. I'm not going to call anyone out because there's a lot of people I like who did it.

But I just feel like it was quite – she'll probably be the CEO at some point, probably, would be my guess. Nonetheless, I was irritated by that. Very irritated. I was like mad. I tweeted. Yeah, I got it. I was mad. No, see, you like to downplay, like, look at this.

I'm literally just sitting here. I'm literally, this is, this is, we have officially become a married couple. I'm just trying to find an elegant way out of your anger right now. What can I do? No, I'm not anger. Why don't you, like, people who do like things. Can I take out the trash? Can I hit our kids? What can I do to make it happen? Last thing. No, last thing is what drove me crazy is they then re-brought up this Cindy Holland,

who was a great programmer, too, but she's more popular. Bella makes more popular stuff, and she came from reality unscripted things. I can see why you're angry. No, but here's the situation. They were still having that fight happening. It's such a sexist cat fight. I'm lost. I'm lost. Let me just say congratulations to Bella Bejario.

Congratulations to Greg Peters. And congratulations to Reed Hastings, who was a legend and legendary CEO. All right. Agreed. Fine. Agreed. All right, Scott, let's go on a quick break. When we come back, layoffs hit a new high.

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Thumbtack presents the ins and outs of caring for your home. Out. Indecision, overthinking, second-guessing every choice you make. In. Plans and guides that make it easy to get home projects done. Out. Beige on beige on beige. In. Knowing what to do, when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today. Okay, Scott, we're back. We're disagreeing a lot lately.

I kind of like it. What do you think? We're feisty. We're the Bickersons. We were Bickersons in London, too. You were wrong about Harry and you're wrong about government surveillance. That's what Patty said. Patty said I was wrong about Harry and Meghan. He thought I was harsh on the monarchy. Thank you. Ha-ha. Ha-ha. Well, he did work for them, but he has a perspective. He did work for them, yeah.

All right. We'll get back to layoffs. January isn't even over, but already this month has seen more tech layoffs than the first half of 2022. Just since our last episode, Google announced that it will cut around 12,000 jobs, and not very nicely in some cases, according to some tweets I saw. Spotify said it will lose about 6% of its staff. That seems to be the number, 6%, 7%. Wayfair is laying off more than 1,700 people, and we're in the same boat. Vox Media cut 7% of its staff this past Friday. Google layoffs brought confusion. Employees reportedly found out by scanning their badges as they entered the office and seeing who was denied. That's depressing. It wasn't clear how they made their layoff decisions. I think probably some high performers were cut. The guy who wrote the book on

search, a guy named Dan Russell, had been let go and stuff like that. I mean, they have their reasons for doing the things they're doing, probably. It felt haphazard at Google, for sure, but it continues. You have been someone who thought it was good because they had been cleaning up areas that they overhired in, for example, because they were doing a ton of hiring. And it does move people to different jobs. Most tech workers find jobs within three months, typically. What's interesting is that, or I find interesting, is from a societal standpoint,

one thing about the tech workforce is it's very skilled, very educated, very well compensated, and also very young. It's so young that a lot of these people who have been laid off have never been through a layoff. And even when you look at what we're experiencing in colleges around America, because of a variety of things, including concierge parenting or bulldozer parenting, a lot of these kids get to college having never known any disappointment. And they face their first disappointment, whether it's they get their first C or they have the heart broken. And they've had so many sanitary wipes on their, you know, used on their lives that they've never developed their own immunities. It's kind of this princess and the pea syndrome.

And I think a little bit is playing out here. And that is I think we have a generation of people that have never been in a down economy. Yeah. And our— The New York Times talking about that. The young people were like, what? And the old people were like, yeah, whatever. like, what? And the old people were like, yeah, whatever. Well, I was even thinking about my dad was on a real upslope in terms of his professional career, especially for a guy who was pulled out

of school when he was 13 until about his 40s. And then when the 80s came and re-engineering was the big thing, and they used to come in and just anyone with a VP or SVP title, they would fire him. My dad moved from LA to Columbus, Ohio, to Chicago, to Phoenix, to Ocala, Florida, to back to Tucson. Because every two or three years, you'd get fired from a big company, and you'd have to go where the work was. And something I've realized, like my dad, to his credit, you know, he was angry and depressed just generally, but he wasn't any angrier or more depressed. I don't want to say he got used to it, but people in the 70s and 80s, or just traditionally, people got, you know, it wasn't an unusual thing. People had,

I don't know, bad things happen to them professionally, so to speak. And if you are a tech employee under the age of, call it 40, you likely have never seen a down economy. Right. And this is really, I think it's really rocked some worlds for some people. And here's the bottom line. If you're at any of these companies, what does that mean? You're incredibly well-educated. You're incredibly skilled.

You're probably very good at what you do. You live in a wonderful economy or you live in a democracy. Traditional companies want to speak to you. I mean, it's just these people are going to be just fine. Yeah, they'll move people to more areas they should move into. Have you been laid off? I've never been laid off. I've been fired.

I think I've been fired from every job I've ever had. I deserve it. Serious. That's why I started. And this is a learning here. There is a certain, you, I've always started businesses and people always say, oh, it's because you're so talented and they give you the benefit of the doubt. It's not. It's because I don't have the skills to navigate and endure organizations. And that's not, that's, it's not a feature, it's a bug. Because in order to do well in a corporate

world, you have to be able to endure the occasional injustice. You have to be secure enough to not worry about what they're saying about you. You have to put up with bullshit. You have to put up with less talented people occasionally being promoted or paid more than you. That's just part of it. But if you can endure that, these organizations known as American corporations are probably the greatest platforms for wealth creation in history. And so people who are able to navigate a corporation are really skilled. I never had those skills. That's why we like each other. I think we're bad employees.

We are bad employees. But it really is. People romanticize entrepreneurs. Yeah. My stalemate at Morgan Stanley, the only job I've ever really had was I was an analyst in fixed income at Morgan Stanley. And my stalemate stayed there and rose to vice chairman. And we got together. And by most measures, I've been a fairly successful entrepreneur.

And we kind of ended up in the same place economically, but he did it with a lot less stress and a lot less ups and downs. Yeah, a bad employee. All right, I'm going to move on. Speaking of employees, Google founders Larry Page and Sergey Brin have returned to the company to help advise its AI efforts. This is a typical move by these companies. Google reportedly in a panic mode

after the debut of ChatGPT, like they didn't see it coming from OpenAI. Now Google plans to release a suite of AI tools and its products. It's been working on this. It has its own versions of these things. I believe it's called Lambda. I believe that's what they're called. I don't get this. These guys have been like on boats and yachts and doing other things, riding around on many wheeled bicycles. What are your thoughts on this? Creativity within a big company. You're talking about the people that stay, right? The creative people tend to leave these big companies and

therefore why would they create something like this at Google so Google can benefit? I just think most people have their self-interest and if you have something super cool, that's why I leave places. I got something super cool or I don't want to share it kind of thing. And so it's hard to be innovative within a big company. And especially when your bread is being buttered by Google search for so long. Why would you innovate? Why would you push it and break it? And I just think the idea of founders, I think it's very romantic, but kind of ridiculous. You mean this is on Larry and Sergey coming back?

Yeah. I think the reason why they didn't do this is because they're doing things that keep their business going going and do really well and there's no reason to be innovative within a big company when you're comfortable like you were talking about your friend he was probably didn't innovate anything in finance did he even if he made the same amount of money and you certainly have so well yeah but what you're referring to is clayton christianson's innovators dilemma and that is you're just remiss yeah you're in miss to kill the golden goose you kill the golden goose. You don't want to be the captain that says, I know, let's build an iceberg to sink our own ship. I mean, one of the reasons why Apple's been so successful is they've never been that scared to disrupt themselves. They will take the iPod, which was a huge selling product, and they'll turn it into an icon that goes on the iPhone.

But that's the traditional. That's why big companies fail or stop to innovate, is they say, why on earth would we eat our own young? But the Google thing is interesting. The founders coming back, that feels to me more like a photo op than anything else. I mean, do they? my guess is do they really- They were checked out a decade ago. I think one of them's been sailing, or I don't know even what they're doing.

I mean, literally, I was at one of their ex-wives, Turkey's ex-husband, he arrived on like a 10-wheel bicycle. It was weird. It was like, this was a long time ago, too. You're friends with one of his ex-wives? Not friends. I was just there talking to her about something. I don't know about you, but I'm just incensed that she was a mid-co-CEO of Netflix.

You know what? I just, you don't even see it. You don't even see it. Just like you don't see government surveillance. You've never been gay. I'm unconsciously biased. You're not. You're consciously biased.

No, but I'm conscious of my unconscious bias. Oh, my God. Just, you know what? You don't, my God. You don't even see it. I don't even see it. I'm blind. Women and people called do not get credit of things they accomplish most of the time, and white guys get tons of credit. Sorry. It's just the way it is. It was irritating to see. I channel women every day. I imagine a man, and I take away reason and accountability, and boom, I'm a woman. Oh, my God. That's a Jack Nicholson.

As good as it gets. Great movie. Anyway, I don't know why these guys can fix something. They've been busy, like, having people peel them a grape for so long. Very smart people. But, ugh, come on. Can't they find some new, young, fresh people to think of? Or old, fresh people?

I don't care. Fresh people. Young and fresh? Not the old, young, fresh people. Is this a deodorant commercial? We need young and fresh people. And I also like the governing force of activists, by the way. I do like that activists are bugging. I like Bob Iger, but I like that activists are bugging him. And now it's Salesforce, activist, investor, Elliott Management. I mean, good activists, not irritating ones that just want green mail or black, whatever, blue mail, whatever. They put up billions of dollars, what could be a bid for board seats. Salesforce has had its own layoffs. The stock has stayed,

Marvin, there's been this shift of people, just so you know, Salesforce is a sponsor, but we give them the same treatment as any other company. They obviously, they're ripe for the thing. I'm fascinated that Salesforce, of course, you could see this stock sort of in a place where an activist might come in, but I'm curious why nobody's coming to Tesla yet, probably because if you blow him up, you're looking for a world

of hurt and there may be not much upside. But I think activist investors are suddenly really out and about. Are you getting calls? I've talked to a few of these guys, or I've heard from some funds. When they call me, as they say, we have this idea, what do you think? But these ones, I don't want to say they're me, as they say, we have this idea. What do you think? Yeah. And, but these ones, I don't want to say they're easy, but Salesforce, I mean, Disney is just a great play. It's an unbelievable, unbelievable assets. You know, this company is enduring the downside. It's just so much more likely if you think about Disney, that its stock would double, then it would get cut in half again. If you really look at the value of their assets and their cashflow, I mean, that's a great activist play. Salesforce is at

basically a five-year low. And I think the play there and the way Elliot will most likely go about it, and it's a guy named Jesse Cohn, who's an incredibly impressive young man. That's one of those moments when you meet with someone so much younger than you and so much smarter than you, you get depressed. You're like, Jesus, really? Anyway, they'll go in, they'll just hang around the hoop, they'll be supportive, and they'll say, clearly, we can all agree the company's undervalued. And they'll wait a year, and if things don't get better, they'll move in with quote unquote suggestions. Yeah, well, they did this in Twitter, right? And they're not afraid.

The way I would describe them is they're forceful yet dignified, but they won't be afraid to make, you know, suggest management changes. But Salesforce, you could say, all right, it's an incredible company, incredible client relationships, probably have overpaid for some acquisitions, probably haven't been as tight around expense control.

Which is what they're saying over at Disney with Pelts. Go ahead. Yeah. Yeah. So, but you're going to see activists everywhere because here's the problem. And this is the reason why there hasn't been an activist play at Tesla. At the end of the day, what you want is, regardless of whether your suggestions make any sense or not, you want a stock whose natural trajectory should be up because it's undervalued.

And the reason why you don't have an activist at Tesla is not as much around Musk. Maybe that's it. No one wants to get into a pissing match with him because he's crazy and has 120 million crusaders behind him. But also the stock is overvalued. Yeah, still. So- That's what I was thinking.

Yeah. So the reason you're seeing so many activists right now, it's not because these companies are so incredibly fucked up or their management's made bad decisions. It's because the underlying stock is probably, I mean, these companies have been cut in half. But you're right. They can't really, there's no upside at Tesla, right? Necessarily.

And then you're buying a lot of trouble. It's now back at 142. It was down at 101. You know, it's going up and down. It's just, it's not going to go to the four or 500 range that they would like. And it doesn't possibly deserve that, right? And especially with all the competitors.

So you wouldn't be winning anything, presumably. Yeah, but what's the activist, what's an activist going to say? What's the argument? And what are they going to do to unlock that value? Yeah, that's correct. That's correct. Sell it. I guess sell it.

I don't know. Who knows? I mean, they certainly have the market share. What would you do? Okay, activist investor, what would you do at Salesforce right now? You get two seats on the board. What do you advocate for? Do you want to change management?

Do you want to have them to divest of Slack or whatever it was they bought? I think you have to start, why is the stock more of and compared to stocks like it? You'd have to start talking about that. You'd have to talk about, just like at Disney or else, who's the heir apparent and why is that unable to happen? Like at Disney or else, who's the heir apparent and why is that unable to happen? And then you sort of lean into what the future of your – what's going to really kill off your business, which seems like it needs a fresh look in terms of management. That's – I don't know. That's stuff like that.

There's a lot there. It should be worth more. It's a very valuable company. It should be more valuable. Thank you. Yeah, that's not a very compelling argument. You've just failed your first test as an activist. All right, okay, fine. Although I think you could be co-CEO of Netflix.

And by the way, just to correct the record, I said that it was at a five-year low. It's actually up 38% over the last five years, but my guess is that's underperformed. Yes, it's performed to peers. That's correct. That is correct. Anyway, which say, I don't know. I'd have to practice. That's why I need you along until I then knife you in the back. Something like that. There you go. All right. Let's bring in our friend of Pivot to talk about something we actually do know about. Corey Doctorow is an author, activist, and special advisor to the Electronic Frontier Foundation.

Frontier Foundation. In his latest book with co-author Rebecca Giblin, he argues for an internet that is fairer to content creators. It's called Chokepoint Capitalism, how big tech and big content captured creative labor markets and how we'll win them back. Welcome, Corey. How you doing? I'm very well, thanks. How are you? So explain Chokepoint Capitalism for us. Isn't that just capitalism? You know what it is, is it's a cousin of monopoly capitalism. It's monopsony capitalism. Monopsony is the word nobody knows because we don't have a family destroying board game with that name. But monopsony is when you have a seller who controls a market rather than a buyer who controls a market. And creative labor markets are really susceptible to this. If you can find a way to corner an audience, say by buying all the radio stations or by locking all the audiobook listeners into DRM format or through any other mechanism that allows you to have control over how the audience meets the artist, then you can impose all kinds of conditions on the artist as they pass through the choke point to reach their audience.

And those conditions can include, and today do include, just giving up whatever copyright they have, which is why in particular artistic markets are a problem, because we have this idea that we can unrig artistic markets or make them fairer through copyright. But if there's only three record labels or four studios or five publishers or two ad tech companies or one ebook company, giving an artist more copyright, it's like giving a bullied kid extra lunch money. There's just like not an amount of lunch money

that will get that kid lunch. To the audience. But isn't that the way it has always been done with audiences, whether they controlled venues, whether they controlled radio stations, et cetera, et cetera. I mean, in movie theaters, it's always been choke point capitalism for artists, whether they shoved into

a movie system or a music system. It seems like that to me. Well, the difference is the number of firms that we bargain with. So when I was a baby writer, there were 25 houses in New York. Now there's five. There were dozens of record labels until Universal, Warner, and Sony went on a buying spree and bought all of them until 70% of all the recorded music was controlled by three labels. We've never had a situation like that. Also, because we allowed for vertical mergers, they were able to buy all the publishers. So 65% of all the, not just the recording copyrights, but the composition copyrights are owned by those three firms.

Certainly, it was never the case that a single file format, except for maybe Microsoft Office, was the only file format that a single genre existed in. But Audible DRM is like 90% of the audiobook market. One company controls 90% of the audiobook market. And as we document in the book, you know, it's not like they use that in a benign way. There's writers who credibly accused Audible of hundreds of millions of dollars in wage theft and who, you know, if they left Audible's platform, their audience couldn't follow them because their books are permanently locked to Audible's.

I'm just really curious what you think. And this is something that both Karen is sort of near and dear to Karen. My heart is. Have you looked at the publishing market and books? Because it strikes me that that feels like an oligopoly and it's as a, as an author, it's so opaque. I still don't understand the economics, how it translates to creators or not creators or, but having, and I know the merger was just blocked, but having a few players, is it similar to the music publishing market? What are your thoughts on it? There are big differences between the particulars of music and books, but they're both monopsonistic, or I guess oligopsonistic because it's a small number of firms.

And they both have similar structural drives to become concentrated. So the thing about monopoly is that it replicates. When you have a monopoly somewhere in the supply chain, it's able to exert excessive buyer power on its suppliers and excessive seller power on its customers. And that leaves both of them vulnerable. So here's an example from books. About a decade ago, Amazon was using its investors' capital to sell e-books below price, below cost, which meant that you'd be an idiot to buy your e-book anywhere else. But every one of those e-books was locked permanently to Amazon's platform with DRM, which would give it total control over the e-book market.

And the publishers wanted to force Amazon to stop dumping e-books, to stop selling them below price because they didn't want this control being exerted over their market. So they illegally colluded to rig the price of e-books with Apple and to set a minimum price and to withdraw their books from Amazon. And the FTC just clobbered them. And after that, they went through even more mergers and acquisitions. So Penguin bought Random House. Now, if the CEO of Penguin and the CEO of Random House sit down at a table to set the price of e-books, that's a crime. If Penguin and Random House merge and the president of Penguin and the president of Random House sit down at the same table to rig the price of e-books, it's not a crime

anymore because that's one company setting a corporate strategy, not two companies colluding to rig the market. And so, you know, we have one distributor, one trade distributor left in this country. Ingram bought out Baker & Taylor's distribution business. You know, when the mass market started, and science fiction is a mass market genre. I'm a science fiction writer. When the mass market hit its peak, there were 300 distributors for mass market books. And now there's one. And the crunch in distribution was driven by the crunch in mass market retailers.

When Reagan deregulated retail and we got the big box national chains, Walmart, Kmart, Costco, Sam's Club, and so on, the distributors were getting clobbered by these super powerful buyers. And so they all merged until there was just one of them. And now they're putting the screws to the publishers. So the publishers are all merging. And whenever this happens, well, they have merged down to five firms, right? The formal name of Penguin Random House is actually about, it takes about, I did it yesterday for a podcast. It takes about seven minutes to read if you list all the companies that are actually Penguin Random House. It's a couple of pages long. So they have done a lot of merging. One of the reasons that deal collapsed is because there was emails about them colluding on prices and stuff like that within the company. And agents were shocked that it was happening.

Authors were surprised. But when it was, for example, the idea of Spotify when it first launched, there was hope it would help small artists find new fans, monetize the long tail. How has it worked out? Say in music, pick music, for example. Yeah, so Spotify definitely was dyed a boarding, right? So Spotify, in order to have any success, would need access to the 70% of music recordings that were controlled by the big three labels. And the condition of those licenses was huge equity stakes for the big three in Spotify. So the big three are major shareholders in Spotify.

Now, this puts them in an irreconcilable conflict of interest, because on the one hand, they're sort of fiduciaries for their artists. They want to get the most, the biggest royalties out of Spotify that they can, so they can pass them on to the artists. But as shareholders, they want to pay as little royalties as possible to the artists because then they get bigger dividends and their shares are worth better and the business that they're partners in has a better cost structure. So they negotiated a rock-bottom price for streams,

but with a minimum monthly guarantee. So that meant that if you were like Sony, you were getting, say, $10 million a month. But because the price per stream was so low, you, say, $10 million a month. But because the price per stream was so low, you could only attribute $5 million of that. So the other $5 million, that was just yours. You could give it to some artists, no artists. You could put it into development. You could pay it to your executive, stick it under the mattress. It was just yours. They also negotiated something called most favored nation status, which is also a feature of Amazon agreements and a lot

of other big retailer agreements, which meant that Spotify could not pay anyone more than they were paying the big three. So if you were one of the artists who were in the 30% of music that wasn't controlled by the big three, the big three set up your compensation scale, but you didn't get this guaranteed monthly minimum and you didn't have shares in Spotify. So you didn't benefit from this. And this got to an absolute kind of zenith of absurdity on the night of Spotify's IPO. Now, if you're Sony or Warner or Universal, and you've got your label hat on, then you're like, okay, well, Spotify is about to go public. Our deal has just expired. If that deal isn't renewed, Spotify is not going to have a successful IPO. We could hypothetically request a new royalty

structure that was like everything that Spotify has minus what it costs to operate it. The whole margin is ours for the taking. And instead, in that negotiation, they negotiated a lower rate per royalty because that made the IPO bigger because Spotify went into the IPO with a better cost structure. And not only that, everybody else's deal got worse too. So the other 30% of labels all got a worse deal. So here's this example where we have copyright that has gotten longer, right? These copyrights endure for 90 years, which industrially might as well be forever. And that copyright getting longer did make the industry significantly more profitable, but it actually reduced the share of income accruing to artists. So, you know, this is why

in the book, we devote the first half of the book to kind of unwinding these very Baroque accounting scams. It's a kind of John Oliver service journalism thing. But the second half of the book, it's all very detailed technical policy proposals, not individual solutions, because, you know, you're not going to recycle your way to climate change. You're not going to shop your way to monopoly capitalism, structural solutions. Can you go to those in brief, these solutions you think? So I'll give you one that's a kind of one weird trick. If you're a creative worker, chances are your contract guarantees you royalties, and that royalty contract allows you to audit the royalty statement, because otherwise you're just taking their word for it. Now, there are lots of ways that you can rip people off with royalties. And, you know, we spoke to

various auditors who work on this. We spoke to a firm, or we cited a firm here in Los Angeles that has done tens of thousands of record label audits over three decades. In every instance in which they found an accounting discrepancy, except for one, the money was going to the artists, labels instead of the artists, the artists were getting ripped off. I have no explanation for this. I assume it's some kind of very vexing localized probability storm that's just centered on the accounting departments of record labels. Must make their jobs very hard. But if you're one of those people who's been stolen from and you go back to your label or your studio or your publisher and you say, hey, you stole my money, they're going to say, artists are adorable,

but you can't do math. You're wrong. But because we don't want any hard feelings, we're good natured slobs, we'll give you a discounted share of what you think you're owed. And all you have to do is sign this non-disclosure agreement. So get out. We're going to pay you off rather than the exhaustion of doing it. And you can't tell anyone else. You can't tell anyone else how we ripped you off. You can't tell the other artists we're stealing from how we ripped them off. And your accountant has to agree that he will never audit us again. Right? It's like that accused murderer saying to the forensics team, dig anywhere you like in my garden except for that one corner.

I'm very sentimental about it. So all of these contracts, because of Monopoly, they're all settled in four states. New York and California, obviously. Seattle. Washington, rather, because of games companies, Amazon. And then, you know, Nashville, Tennessee. And so if we were to amend the state contract laws of four states or any one of those four states, and remember, state law is a lot easier to change than federal law or federal regulation, to say that as a matter of public policy, nondisclosure cannot be enforced when it pertains to material shortfalls or omissions in royalty statements. At the stroke of a pen, you put more money in the pockets of more artists all over the world.

You can't make a deal, just as you can't make a deal around sexual harassment. There's been a big movement in that idea. Or non-compete, or yeah, I mean, we've got the FTC saying no more non-competes. So four state constitutions, or any one of them, or state laws rather, would just throw money at artists in a way that 40 years of copyright term extension has failed to do. It's like this crack in the machine, we can stick a crowbar and wiggle it around and money just pours out of it into artists' pockets. You know, if copyright term extension is the right to feel angry at your audience, this is the right to buy

groceries and put braces on your kids' teeth. I'm curious. I would imagine you're paying attention to the class action lawsuit brought against Midjourney and Stability AI. Basically, a group of designers and artists have said that AI is only as good as the images fed into it, and we're not getting paid. And all you're going to do is put us out of business with no royalties. Have you followed this at all? And do you think it has any impact on the broader creator economy? I have to say, I'm very conflicted about this. And I haven't yet figured out where I land on it. Here's the thing.

Another way of talking about training AI is studying art. So, like, I became a writer by reading a bunch of books and thinking really hard about how those books were written, right? Every painter becomes a painter by looking really hard at and analyzing art. Computers are doing it with math. I don't think that that is foundationally different from doing it with your brain. And I think that if what we say is that it's a copyright infringement to think really hard about art and learn lessons from it, that that is going to be very bad. I think that it's similar to when we saw the lawsuits like

Blurred Lines about the groove of music, the feel of music, where Marvin Gaye's estate sued over a song that had no melody, no rhythm section, nothing from Martin Gay, but sort of sounded like a Martin Gay-ish kind of song and won. And at the time, it was hailed as a kind of victory for artists that maybe they could go after people who were unjustly profiting from them. But the structure of that market is such that if the big three labels alter their contracts so that it says you're signing away your groove rights as well as your other rights, then now it gets even harder. Like, you can't even make music that's recognizably in a genre without permission from one of the labels. And that permission is going to be conditioned on you accepting a very bad one-sided deal.

I mean, it sounds like rather than is and borrowing from it. So in that regard, platform operators have to make money for their networks that they build. If they have to give content creators all the money, what incentive do they have to do it in the first place besides controlling them? I mean, if they can't, they want, presumably, if you're a platformer, you want to control every cost center, right? And get the most for yourself. So how do you then create a situation where there is more ability for operators of these networks and the creators to make money, pay for social media subscription? How do you do that? Because at some point you want everyone to benefit, because why would they build in the first

place? Well, I guess I think that the premise is that if artists were able to bargain fairly with a disparate sector that had to bid on their work, that the margins would be so thin that the sector would collapse. I think if that's true, then the sector doesn't exist. But I also think it's kind of ahistorical. Like, one of the stories we tell in the book is how the Writers Guild here in Hollywood struck for 22 months against the big four agencies. They're about to again, right? Yeah, they need to make a living, right? Agents do good work. My agent's awesome.

They need to make a living. But once there were four of them, two of them owned by private equity firms, they got rid of the traditional 10% commission deal where they negotiate the best deal they could for you and then take 10% of it in favor of something called a packaging model, where they would sell a studio, a writer, a director, and a star as a package and take a cash bonus out of that. So the bigger the payout was for the artists, the less money there was left over for the agents. And so they were incentivized to strike bad deals for artists and better deals for themselves. Showrunners discovered that instead of the split being 10-90, it was 90-10, where 90% was going to the agents. The agencies were building studios so that they could negotiate with themselves on behalf

of their clients. It's very hard to understand how this could ever be a fair arrangement. The argument that the agencies made when the Writers Guild issued a code of conduct prohibiting this and ordering them to stop was that this was how they were going to make money. And the Writers Guild said, yeah, this is how you're going to make money by not paying us. So we're going on strike. And 7,000 writers fired their agents on day one of the strike. 22 months later, all four of the big agencies caved. And they're all in business. So what we're talking about here is not the size of the pie.

It's the distributional outcome. And I don't believe that the pie gets smaller if the distribution is changed. I think the pie, there's nothing a priori that says that if Jeff Bezos gets to harvest all of the surplus value from every platform seller on Amazon, that Amazon runs out of money and ceases to be a going concern. And then all of those sellers have nowhere to go. We're just talking about changing the mix. And one of the ways that you change the mix is first of all, by prohibiting unfair contract terms, right? And then the other thing is by prohibiting unfair mergers so that firms are not able to, you know,

skew the market in this way. So there's always gonna be a tension around the relationship between the creator and the distribution. Mm-hmm. You know, both are gonna try and leverage, do whatever they can to get the, you know, Tom Cruise does a really good job

of leveraging his star power against the distribution. And big tech has always been criticized for getting more than their fair share of the creator, of the, you know, the value the creator creates. When you look at, if you were to stack rank, and I realize you can't do this for every distribution and creator relationship, but where do you think are the worst relationships between distributors and creators? Where are the best ones? And also, just specifically, your thoughts on TikTok as it relates to their relationship with creators. So I think that the way to understand this is that when firms can impose switching costs on creators and audiences, or more broadly on business customers and retail customers. So eBay, you can think of there being bidders and sellers, or Amazon, there's buyers and sellers, or in their Kindle

program, there's writers and readers, when they can impose high switching costs on those entities, so that if you leave the platform, you have to give up something important. That gives them the economic power to shift surpluses away from both buyers and sellers to the platform operator. And so there's a kind of lifecycle of a traditional platform, which is they start by allocating a lot of surplus to users. So Amazon subsidizes shipping. They give you free returns. They make everything easy to find. They do all kinds of things.

everything easy to find. They do all kinds of things. And then once there's a critical mass of customers locked in and business customers need to reach those end customers, those consumers, then they shift the surplus to the business customers to get them to come in. So TikTok, you mentioned, there was a great story last week on Forbes about how TikTok has this heating tool. And when a video goes viral on TikTok, it's not because the algorithm liked it. It's because someone like just turned a dial. And instead of showing you, the TikTok user, the thing that the algorithm thinks you're going to like, it shows you that just shows you this video. But if you're the artist, it looks like you are making the kind of art that TikTok loves. You are good at TikTok because suddenly you got 20 million views on your video. This is an incentive to shift your production to TikTok.

TikTok has an idiosyncratic format that makes it hard to do TikTok production that works well on other platforms. And so you end up being- They lock you in. Yeah, TikTok first. They give you an end cap deal and you don't even know it, right? Right. That's right.

You know what I think of it as? It's like you go to the carnival in the morning and there's a guy with a giant teddy bear who thinks that he's really good at throwing balls in a peach basket. But actually, the carny just didn't knock the ball out with the scissor thing under the bucket when he threw it in because he wants one guy walking around all day with a giant teddy bear because that gets other people to line up and give him five bucks to try and throw three balls in the basket right right so once the artists are locked in then they can start shifting surplus to themselves so you know this is facebook or or twitter these days twitter if you're not blue your posts just don't get shown to the people who subscribe to you this This is something Facebook did a long time ago. YouTube has done this as well. And this is just a way of saying, like, you have consumers who want to see something and they gave us an explicit directive. Tell me when there's a new video or post from this person. You have business customers, performers, creators who have

produced the thing that those consumers want to see, it is not to the benefit of either the consumer or the producer to interrupt that relationship. And yet the firm does, you know, the first five screens of any Amazon search now are 50% ads. Right. And their stuff. Yeah. Yeah. It's all in-cap. It's all in-cap. Plus their stuff. 50% ads plus their stuff. And that is this process whereby the surplus is then shifted to the shareholders of the platform. And this is bad for everyone. I would argue that it's even bad for the platform because if you're shaving the surpluses down so that it's just barely worth it for your consumers and your producers to keep using the platform, then any exogenous shock that makes it less worth it, people get more worried about their privacy, whatever. Let's finish on that. Twitter exodus, right? I'm not using it as much. I know I'm not getting

suddenly, you know, I'm not getting shadow ban. I'm not being like those right-wing people that scream about it. But definitely, it's becoming less and less useful because you can sort of start to see the changes, right, in terms of use. What's the alternative to things like out of finding the autoverse? There's this Fediverse alternatives like in terms of use. What's the alternative to things like out of finding the autoverse? There's this Fediverse alternatives like Mastodon. There's all kinds of different ways. Like someone was saying, what happens to my audience here? Because it's gotten so quiet. Yeah, I call this the Anatevka problem. You know, that melancholy scene at the end of Fiddler on the Roof. Well, we're all finally leaving this village where the Cossacks have been riding

through every three scenes and kicking the shit out of us. But I'm going to Chicago. You're going to New York. He's going to Krakow. We're never going to see each other again. Right. The Fediverse protocol, the activity protocol and the Mastodon application that's built on it has a built in freedom of exit. So with one click, you can export all the people you're following.

And with another click, you can export all the people you're following. And with another click, you can export all the people who follow you. And then you can quit the service and you can go somewhere else. And with one click, you can upload one of those files. One click, you upload the other. And everyone just shifts over. This is also built into RSS. You know, we've just passed the 10th anniversary of the death of Aaron Swartz, who's one of the co-creators of it. And very early on, the people who made RSS realized that that protocol needed a redirect button where you could issue a code in your RSS feed that says, from now on permanently, this RSS feed is somewhere else. I have RSS feeds in my reader that I've been following since before Google Reader existed and after it existed.

They're not the same address anymore. I've never changed them. People just issue a redirect, and my client just as well behaved and does it. Now, if you were a Mastodon server owner, you could, in theory, just kick someone off and not give them the chance to export their data. And what's interesting about this is if we came up with a rule, like the GDPR arguably already does or CCPA already does that you have the right to request your data, we could say to those firms or those individuals or cooperatives or small businesses, hey, even though you don't like this guy and he was obnoxious and you kicked him off, you still got to export those files and email them to him and give them to him. And that is a very administratable remedy.

Like, compare this to you can't have trolls or hate speech, right? We have to define what a troll and hate speech is. We then have to figure out whether they're doing it. We have to figure out when they fail, if it's a best-faced effort. It's so expensive that small companies or individuals can't do it, so you only get big firms. This is an administratable remedy that's easy to comply with. And so if we're going to say, okay, we're just going to have like a golden rule of the internet, which is the right to exit, right? The right to leave and go somewhere else without the Anatevka problem. That's something that we could equally impose on a hobbyist who's hosting 10 of their friends and falls out with one of them or on a multi-billion dollar company. We can figure out whether they're complying with it and complying with it is really easy.

And so it's a rule that would preserve these communities and it would guard against this surplus harvesting that is ultimately the death of the firm. I call it the inshitification problem, where just things get worse and worse over time, because of this surplus harvesting, this unstoppable temptation to harvest the surplus. And in part, it's because on a digital platform, unlike, say, on the floor of Sears, you just turn a knob and you're moving surpluses around. And it's just so easy. And you get those users, but they're never going to let you do that.

Twitter's never going to let me take my followers. Twitter's unlikely to be big enough to attract any real antitrust scrutiny, although they might under Section 5, which is the deceptive practices, if they were really obnoxious enough. But, you know, if there's a very large firm, and when we think about the very large firms, Google, Facebook, Apple, and so on, they're just incapable of not cheating, right? Like they all just break the rules all the time. And when they cheat, it just never goes to trial they always end up just settling well one of the things about settlements is they can have arbitrary terms right i mean not like they still have to be agreed to by all parties but they can

have an art but one of the terms that we could set as a condition of a settlement is you have to do this but we could also say you know under cc, you have the right to request your data from a firm, right? And under GDPR, even under the failed and not very great privacy bill that was up federally in the last session, they all have this. It's kind of a bedrock, right? It's like it's the kubaya version. Like nobody seriously disagrees that you should be able to get your data from someone who has it. But that's more than that. It's their audiences.

But it's your data about your audience. Yes, that's correct. Yeah. All right. This is fascinating. I could talk for hours about this. OK, the book is Chokepoint Capitalism, How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back by Corey Doctro and Rebecca Giblin.

Thank you, Corey. Thank you so much. Thanks. It was a real pleasure to talk to both of you. Thank you. Thanks, Corey. All right, Scott. One more It was a real pleasure to talk to both of you. Thank you. Thanks, Corey. All right, Scott, one more quick break. We'll be back for wins and fails. Okay, Scott, let's hear some wins and fails. I'm going to go first. Is that okay?

Yeah, of course. Here are some wins and fails. I'm going to go first. Is that okay? Yeah, of course. Can I go first? Well, there was a story about Peter Thiel in crypto where he was having the – remember when he was having all those events where he was insulting Warren Buffett, et cetera, and everybody else? He was going on and on about how everybody should get heavy into Bitcoin. Well, while he was doing this, he sold off a majority of its crypto portfolio before everything got crushed, and he made $1.8 billion in returns. It was crazy how insulting he was being to people who thought Bitcoin was ridiculous. But he was acting like he was optimistic, he was pushing it, he called people stupid and idiots.

So that's a, I don't know if it's a win or a fail. It's a win for Peter Thiel. It's a fail for everyone else who believed him. Same thing, not telling the truth publicly. That just drove me crazy. You raise a really interesting point. And I wonder if at some point if you own enough of an asset class that you can move the market with your buys or sales, that if you go into a public forum, i.e. you go on CNBC to talk about your latest piece of shit SPAC as you are literally selling and saying, and also using your Twitter following and your reputation as a very bright, successful person to intimidate anyone who questions whether Bitcoin is going to be at a million dollars by 2030 as Cathie Wood and her loyal band of crypto Taliban. It brings up an interesting point because a lot of people were going on CNBC and talking up space tourism companies and things that didn't make any sense as they were selling. And so at some point,

do you have an obligation to have some sort of disclosure around what you are actually doing with your own securities when you own above a certain amount? I think there'll be no repercussions for this. Yeah, you're probably right. But on top of it, he had to just like drag someone like Warren Buffett, whoever, like who were right or who were correct or at least were reasonable enough. Now, look, you can like or dislike Warrenuren buffett but the the the cynicism while you're doing one thing and doing another is just i just am always like really really aren't you fucking rich enough you know i always say you're so poor you all you have is money it's almost like almost as bad as a public company ceo saying it's taking a company private at 420 to share when

there's no veracity to that but i have have a win. Can I do that win? Jared Butler, who is an action star whom I love. He's been in so many different things. And I just love him. He does like Olympus has fallen, London has fallen. He's been in all kinds of movies where he plays an action star. And a lot of these action stars go into sort of shitty versions of their former careers. And this movie is scoring big. It's called Plane, where he plays a pilot who has all bad things happen to the plane, and then he saves the day. It's getting

actually pretty good reviews. I don't know this. What is it? Oh, it's a new movie called Plane. And he's right up there with Russell Crowe for me. I love those kind of action movies. And a lot of these sort of action heroes, like Bruce Willis, who unfortunately has gotten very ill, has some issues, or Sylvester Stallone, they get paid a lot of money to be in these shitty action movies, all of which I watch, or Liam Neeson, et cetera, et cetera. Joe Butler once gets made one called Plane, and it's so good. I love these movies. He's Scottish. That's all I know about him.

Oh, he was in 300. He's just really, I just love him. I like his whole thing. And I'm happy that he's, I would recommend it to anybody. You know, I have this weird proclivity to watch action movies, but he does them real well. My win is I'm inspired by Cory and the Crater Economy. I bought, I think it's called an Insta 360. My 12-year-old is really into video.

And this thing is just incredible. What is it? Well, it's a camera. But you put it on a stick and it uses AI to make the stick invisible. So you're just walking and it looks as if there's a boom or a drone filming you. And it's easy to edit. I'm looking at it right now. And you can even put it behind you and it has a 360 view of everything.

It's literally as if there's a boom operator following you and listening to you. There's no stick. You're holding the stick. You can't see the stick. The stick is gone. That's right. Except people have their hands up. People have their hands up. But if you get a long enough stick, you're very popular in college. I mean, literally you can have it in front of you as if someone, a professional crew is following you around. And I've been doing this stuff with my son where he talks about Premier League football teams. Yeah.

And it's totally cool, and he's into it. And anyways, it's fun, and he's really into it. And then just along the same lines, we went to— There's like 90 cameras. Which one did you get? There's so many. They're just better and better. I'll send you the one I got.

The one we got was about 300 pounds, which I thought was pretty reasonable. Two-hands invisible selfie stick, sticky lens, all this stuff. Wow. It's totally cool technology. I mean, it's really wild. My other win, just along the creator side, and then I'll get to my fail. We went to the Royal Albert Hall and saw the most recent Cirque du Soleil. And it was just so – A, my son just loved it.

And you sit there thinking, it's just so inspiring, the people at this creative, to come up with this stuff. So, anyway, Cirque du Soleil, Royal Albert Hall, take your kids. It was fantastic. I love Cirque du Soleil. I was like, how did he lean over and kiss his ass like that? I was always amazed by them. They're amazing. I did not see that.

Anyways, and then my favorite— The contortionists. The contortionists. Oh, the contortionists, yeah. I'm like, ow, how did you do that? It's like finally we've answered that question, what happens to Eastern European gymnasts when they're no longer going to the Olympics? They go to Cirque du Soleil. These people are incredible.

Anyway, and then my fail is that Germany is being very recalcitrant around sending their leopard tanks to Ukraine. They won't even allow other NATO nations who have the leopard to send them. You were complimenting them in Germany, weren't you? Well, I thought that they looked like they were going to send them. And this is exactly playing into Putin's playbook. It shows that we're not unified. And also, there's just no getting around it. Once you're in a war with someone, and let's be clear, we're in a war vis-a-vis NATO against Russia, appeasement doesn't work. And if we want to end this war, we need to win it and win it crisply. And those tanks could make a big difference. And Germany sitting on its hands and coming up with a lot of rational reasons for why they're not going to support the war effort to their full capability, and these are amazing tanks, is doing nothing but providing comfort to the enemy. So my loss here

is the recalcitrance of Berlin around this issue, and it's an important one. Good one. That's very serious. Good to go back to that. Cirque du Soleil! Cirque du Soleil and contortionists! There you go. There you go.

They're amazing. They are amazing. Anyway, we want to hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Scott, that's the show. Once again, another fantastic show in the can. We'll be back on Friday for more. Please read us out. episode. Thanks also to Drew Burrows and Neil Saverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business. Kara, have a great rest of the week. Thanks, you too.