Tech Brew Ride Home - (TWTR SPC) Whither The Creator Economy?

Episode Date: September 3, 2022

Talking the state of Snap, Substack, and the creator economy generally, with @kyurieff, @simonowens, @MattNavarra, @corinne_podger & @BullishStudio! Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Hi, can you know me? Yes, I can. I can.

Cool. I have my AirPods on, so you just never know. It's true. It's a little muffled, but I think it could work. Is this better, Chris? I took my AirPods out. I'm ditching a lot. Much better.

Much better. Actually, that is much better. Should we just do this space about how AirPods are the worst tech product ever made? Hey, they might get better next week in theory, but... You think so? Is that has that been rumored? I think that's one of the things that they might do is a slight bump. I can't remember what it is they're going to bump it with.

Are we talking about the AirPods Pro or the Max or what's the form factor that we're thinking? I don't remember, but I remember thinking because remember how I had that gripe about how everything should be USBC now. Oh, yes. And they were going to, I knew they were going to re-up it, but they were going to still keep the lightning port. So I was like, oh, fuck you. Well, are you ready to get started? Sure. Knock it out.

Great. Welcome everybody to the TechMeme Ride Home Podcast show for September 1st. My God, it is September 1st, 2022. We are joined today by two awesome guests. We have Kaya, we have Simon. And the real big question, I think, on our mind is, is the creator economy okay? Is Snap okay?

Is substack okay? Are all these companies that were flying high during the pandemic when there was free money flowing and lots of crater funds that were essentially crater slush funds? You know, wash in space? Are we still in that era? Is that era come to a close? All the VC subsidies of all of this content that people are producing is that either over coming to a close or is just the economy shifting at a macro scale.

And a lot of bets that people made are maybe not coming out as we might have thought. Anyways, we're here to discuss that topic. Brian? Yes. Let's start off with K.A. Because I want to start with basically Snap. Because Snap was kind of the biggest story of this week, laying off 20% of its staff. which is huge.

So is SNAP okay? What do you think is going on here? So I think we will be okay. I think they're taking pretty drastic measures. If you've been following their earnings reports, I mean, they've been trading so erratically. Like there was one report where they were up 60%. Like that's not how we're normal.

And if you were on their earnings call in the most recent quarter, Evan Spiegel didn't even speak. They didn't even do the formality of reading through the results. They just sent it out to everyone and then did a Q&A with analysts. And he didn't say a word. So that was already kind of an interesting. People were like, wait, it's even on the call.

So I think they were one of these companies. We did a chart this week showing that they outpaced any other big tech company and hiring. So I think they fell into this trap of overhiring. and now they're doing this course correction. I think also they have flip-flopped a little bit on who they are as a company. They're an AR company, they're a camera company, they're a messaging company, they're a company for team. Now they want to be creators. They started doing games and mini-apps and all these different initiatives.

So reading the letter, it's really a refocus. Obviously, the environment's making them do that. But they really also are at risk of losing their foothold with teens. For a long time, they have been consistently the app for teens, and people might age out of it, but then new teens come in, and now you have TikTok, and that's a big threat. They've flip-slop on whether they want to be a place for creators. For many years, celebrity users didn't have any more analytics than you or I did on Snapchat. Like, it's kind of crazy.

And then suddenly they're giving away a million dollars a day to creators. And now they're paring that back. I mean, it's really all over the place. But I think this restructuring and this refocusing is probably going to be healthy for the company because they went in so many different directions. Kaya, forgive me. I didn't introduce you properly. Oh, sorry.

You're from the information. And, like, you know, obviously you do some of the deepest reporting on this company than just about anyone. So, you know, I rely on you all the time on the show for your reporting on this sort of thing. Okay. Let me pull back a second because there's the thing that we've been talking about for several weeks, months of, like, is there a tech-only recession going on? Is there a, oh, we all got screwed by Apple's privacy changes, recession going on? what I'm trying to get at actually is it sounds like almost what you're saying

when you say maybe they're pulling back from being a camera company or a media company or a creator company that kind of sounds like the sort of I don't know midlife crisis that meta is going through as well to what degree do you think that they are having similar issues or are there different cases going on between what Meta is experiencing and what Snap is experiencing? So I think it's a little bit different just because of the scale.

So meta obviously is much bigger than Snap and has way more properties and has almost gone in way more directions. I mean, I think it was either today or this week where they shut down their next door competitor. I mean, if you look at Facebook, I remember, I think a year or so ago, I was looking... Facebook had a next-door computer? Exactly. Yes, and they shut it down today. Yeah, like, that's the point, right?

If you go into the hamburger menu of Facebook, at one point, they had food delivery, they had job posting. They just went, they tried to be this everything app. And out of those bets, I think Facebook marketplace and groups are like the reason people are still on Facebook. But I think with Facebook and Instagram in particular, they're trying to figure out also, are they still a social product or are they an entertainment product? And that's obviously been driven by TikTok. And then the big parent company of Meta is going in the Metaverse direction, which is years and years away. And everyone was super hot on it last year. And it was this buzzy word.

And now we're in the hangover period. Okay, wait. Okay, I'm going to reframe it again. I'm going to give you two things and tell me which is more important. for Snap, because these are both things that Meta is worried about. Is it, number one, TikTok, or is it number two, Apple's ATT thing? And I know that that's not apples to oranges because one is more important to their bottom line immediately than the other.

But like, you said that Snap is maybe no longer the place for the kids. So what do you think if you're in the C-suite at SNAP right now, what is the thing that you're the most concerned about right now? I know this is lame, but it's both, because Snapchat also has been trying to grow its advertising market period, and a big plus for advertisers was they consistently had this young audience. So it's super intertwined. So you have TikTok that's eating into their share and relevancy with teens.

I mean, you could argue that Snapchat is a messaging app, and that's different from TikTok. But still, if teens are spending more time on TikTok and less on Snap, that's not good for your advertising business. I think generally Snap was a little more insulated from the Apple privacy changes compared to Facebook, but they still had issues with it. But they're much, Facebook is way further along, obviously, with its advertising business. So I think the two are pretty intertwined.

They're one of the other things from the headlines that I did either yesterday or today, I can't remember. But, you know, they're shutting down, are they shutting down all of their original shows or they're just not doing new ones? I can't remember what the reporting was. Yeah. So they're basically, they're going through with the seasons they have and the news programs are staying. And same thing with their political show with Peter Hamby. So that's staying. But future shows, that's what's on the top of the talk.

Okay. So what I'm getting at here is this is the thing that made Snap sort of different to me. I don't know. People can hear my dog drinking his water in the background. I apologize. But like, okay, Snap was sort of early to, hey, by the way, we're an entertainment destination. Snap was earlier than meta. We're not just a social network.

We're also like this sort of like AR first sort of thing. So we do know that they're starting to cut back on their hardware stuff, although they haven't shut down the spectacles. They definitely shut down that sort of drone thing. Yeah. If you're an investor in Snap, how concerned are you that they're, of pulling back on all of the things that really make them different.

Yeah, I mean, I think the original shows, it was kind of hard to tell honestly how well they did, because they had these impressive stats about millions of people watching them. But like, was that someone watching one minute of it or accidentally tapping it? I mean, I still think it didn't quite find its niche. And you see that too with YouTube original, same thing, where they tried to do this Netflix high touch approach, and that also was shut down. So it's not just snap.

You're seeing, I mean, Facebook Watch also didn't really take off either. So it's almost who does it well? I mean, we could go back to Quibi. Like, who does original programming well? Yeah, yeah. Like none of these platforms. I want to make a point about that because in some ways, Quibi had, well, I can't really say that much about it since I really didn't get to use it.

But conceptually, people are moving in this direction of these short form videos, right? And they're moving through them so fast. I mean, I think actually in an interview that I did with the information, I call it, information waterboarding, you know, because it's just such a inundation of content. And it's great for brand advertisers who are just looking for awareness. But if you're trying to actually convey something, any, you know, anything deeper than that, it's so easy to swipe off that I guess I really wonder if there is kind of a media advertisement fit for either conventional style ads or non-brand advertising,

and whether or not that is actually part of the reason why it's really hard to monetize in a meaningful way relative to, let's say, YouTube, where you're watching something for, let's say, 15, 20, 30 minutes at a time. So, like, one of the big unknowns here is whether TikTok is actually monetizing effectively, their private company, there's not a lot of information or insights about them. They have their own creator fund. And so how much of this is, I guess, And this is sort of like the broader question about subsidies in the marketplace and whether

that is distorting the creators who are producing this content and whether there is actually going to be a there there when kind of like the dust settles and the subsidies dry up. Yeah. So the way I think about these creator funds and through conversations with creators and hearing about how they run their businesses, you have to have a platform where you can monetize and where there's an audience. So if you look at SNAP, um, gave away a million dollars a day and some people like they basically won the lottery and started posting and hit the algorithm and literally eight people became millionaires from that who were you know in their teens and young adults but they didn't

stick around because there wasn't an audience the cultural zeitgeist isn't there you know it didn't become cool so yes you can give away all this money but there's you still have to have the audience i mean if we look at instagram right right like i i Instagram paid me like $1,200 to like make a couple reels and then I never made anymore, right? So there is this, you know? Yeah. So you have to have the audience and the traction. But then if you look at Instagram as a broader platform, I mean, it was only two or so years ago where they started actually talking about direct monetization.

People for a decade have been making money on Instagram indirectly. So, but then you have the vines of the world where you couldn't make money. And it was super popular, but creators left. So you have to have this right balance. I think YouTube has been the gold standard of ad revenue sharing and having monetization and that working. But even YouTube creators who I talk to, the vast majority of them are not relying on adsense. You can't rely on these programs because they're fleeting. They fluctuate.

They can make changes. The algo can change. I mean, there's so many factors with it. And it just ends up being brand partnerships are like the number one way still that creators make money. So the subsidy programs can be great, especially for emerging creators. But at the end of the day, I mean, if the audience isn't there and the income isn't sustainable, it doesn't work. By the way, Simon, as we're starting to talk about YouTube, also you're welcome to chime in, and then we can also intro you properly as well.

This is an interesting question to me. Um, I, I, like, YouTube is the best in terms of like, for all of the people not paying attention to them or people shitting on them all this time. Like, they've, they've basically, they were the originals for monetizing, uh, creator content, um, going back to from the very beginning because they had to, because they had to, to make, uh, the, the, they had to pay the bandwidth bills. they had to pay the, you know, the IP holders and things like that. Is there anybody, how come, how come everybody else has taken this sort of shotgun approach, which is, all right, we've got $100 million and we're going to throw it at the biggest already successful creators? Because what I see constantly in YouTube, and maybe Twitch is maybe good at this too, But like you can create influencers and you can create stars on YouTube and Twitch versus all these other folks like sort of try to prime the pump and like go in the reverse and be like, hey, come over here as opposed to like creating a groundwork for things to bubble up from underneath.

But I think like arguably Instagram is the home of influencer marketing, right? Like a lot of personalities have come from it. But yeah, I mean, it's it's much harder to have a sustainable career on a platform that's not. doing some sort of ad revenue sharing or giving you some sort of consistent income. Real quick, real quick. Most influencers, depending on what platform you're on, are you, I was seeing something about this recently, which is why it's at the top of my mind.

Are people getting their lead gen from other places? Do you know what I mean? Like, you can't go to one channel. It's like, this is where I get my audience from and this is where I get my money from, right? Like, everybody in the creator economy is sort of like putting their fingers on all these different pies because you get attention from this place, but you make money from that place. Is it still completely bifurcated like that? Yeah, and it depends on the creator, too. I mean, you could theoretically make all your money from independent brand partnerships on Instagram, or you could, you know, or you could be like a big LinkedIn influencer and sell like a marketing course.

But, yeah, I mean, it's fragmented. And I think creators, too, have been really savvy about diversity. their business because if one platform makes huge changes, and that's your whole business, that's not a good spot to be in. So I think creators are almost forced to be in this spot of diversifying and being everywhere. This is a Hunter Walk's multi-skew creator concept from a little while back, I think. One of the things that I wanted to note was just, you know, today Adam Aseri, the head of Instagram was sharing on his stories about how he believes that the crater monetization

opportunity, especially through brand partnerships, is a $10 billion opportunity, which, you know, it's pretty good chunk of change. Also recently, within the last week, I've pinned to tweet with the screenshot of this, I was invited. I have a professional account on Instagram, mostly just to like check out what's going on. And I was invited into their brand marketplace, their creative marketplace. I find this to be very, very interesting, very savvy. And also, Kai, I'm just like curious how you see this relative to all these other companies, I think, trying to sort this out and figure it out. This creator marketplace essentially, one, sort of forced me to go through this process where I allow the brands or creators that I might partner with to know a lot about me personally, to know a lot

about my audience, to know a lot about my reach. So essentially, it's all opt-in. You cannot participate unless you actually do this. And then secondly, you arrive at the end and you describe a number of things about your demographics or your interests or the topics that you might want to advertise yourself to in this creative marketplace. And as a result, these brands can then find you and then send you requests, which, you know, have been on the platform for quite some time. If you ever try to tag or label a brand, you can sort of enable monetization of your content. But what I find is interesting about this. One, is the formalization of this. So there are a number of these creative marketplaces that already exist that are outside the platform. And, you know, and I've seen them and

work for them. They ask you to do screenshots of your stats, or sometimes they even require you to share your login information so they can come and confirm visibility into how much reach you're getting so they can pay you accordingly. The fact that Instagram is doing this on platform, of course, is in some ways catching up to YouTube, but at the same time, they're doing it in a way that, you know, one is mobile first, two feels actually pretty well done. And I suppose three, one of the things I wanted to get to was like feels so far in advance of where Twitter is. Now, we don't have to go directly to the Twitter topic yet, but I wanted to get your take on this new, or at least it seems to me new, although maybe it's been around for a while, this creator marketplace

that Instagram seems to be rolling out to more people now. Yeah, so Instagram first teased the program in April of last year, but it took a while for them to roll it out. I did a chart actually in my newsletter last fall comparing them. So Instagram, Snap, TikTok, Twitch, YouTube, they all have a form of this. And actually, Twitter has this little known division called Art House. which in 2015, they purchased an influencer marketing startup called niche. And so they do some of this connecting.

It's not quite as automated, I think, as the self-serve marketplace type thing. But Twitter has, you know, they're in that space, kind of. So I think generally this can work really well for smaller creators who are just getting started and might be don't have a manager who's sourcing deals for them. I have heard, though, from some creators that they're getting inbound from small. stuff that's just so irrelevant. So I talk to this woman who, so I think there's potential for these marketplaces to stumble a little bit when it's just automated and you can get these kind of spammy, you know,

deals. At scale, the quality is not necessarily that good. Yeah, because I think these third party marketplaces, a lot of them have a lot of people involved, right? Like it might be a self-service portal, but there's people involved with the creative and hashing out the deals, which you're lacking from the social platforms. But I spoke with this woman last year who has a cooking channel and she was getting like pimple cream. They're like, can you do this pimple cream?

And she was like, no, this makes no sense. So she was really unimpressed with kind of the inbound she was getting. But I think it's smart, especially if Instagram starts trying to take a cut of these deals. You know, that's a potential new revenue stream. They do obviously have the scale on the advertiser relationships. And it is a, it can be potentially good for smaller creators. But, you know, from the early, at least from when TikTok's creator marketplace was rolling out, a lot of the creators were a little unimpressed with it. So there's two points that I want to, I guess, one question and another point.

Do you know if, let's say that pebble cream company or whatever was actually an Instagram brand or were they a Facebook advertiser that was offered access? So this was TikTok. Oh, I see. Yeah, so I'm, I'm, every platform does it a little bit differently. I don't know if they vet the brands or if only certain brands can use it. I think Instagrams especially isn't kind of earlier stages. So I'm not quite sure. But I think too, it could just be brands reaching out to a ton of influencers and not really thinking through like who's actually good fit for this campaign.

So that'll be interesting to see if the Instagram offering, you know, kind of evolves that in terms of getting the right brands and from the right creators. And, you know, and, you know, I. But I do still, one of the things that I do wonder about is the cross-platform publishing aspect and bringing advertisers who are conventionally on Facebook and think about Facebook as being where their audience is to then, you know, ticking a box and essentially allowing it to, their ads to flow through the Facebook advertiser network. And those things end up on Instagram because, you know, the algorithm says, oh, this is just my inventory and I'm going to spread it wherever there's audience.

So it'll be curious to see how that actually comes together. The thing I wanted to point out, though, was that in the early days of the Apple ad network. And of course, I'm still a little bit skeptical about Apple's advertising efforts. However, obviously they have an enormous surface area with the App Store and elsewhere, Apple News, and so on. They tried to do, I think, what Snap has tried to do, which was have a higher quality advertising content in media. And it just seems like because they take that more bespoke approach, it just, one, it doesn't really end up scaling, and two, it ends up part in their business. And I wonder if you can speak to that at all where there is more of a marketplace, like an open marketplace aspect, and that's what's giving Facebook and meta the edge in this current kind of downturn.

Yeah, I mean, I think with the marketplaces specifically, right now there is no monetization plans for that. So I don't know if they're trying to sell this as kind of an additional perk to advertisers. But right now, they're not taking a cut of anything. They're just letting, they're just trying to do this matchmaking type thing. So you could see that becoming maybe a bigger part of their strategy in the future, but for now, you know, staff said the same thing. Yeah, they're just basically trying to use their, you know, their scale, you know, and their position. But for now, there's no plans to take a cut from it, but it could be a way to kind of just pitch advertisers generally. I'm like, oh, hey, look, we also have the service for, you know, influencer marketing.

So right now it's a, I don't see it, you know, obviously being a beneficial. revenue driver, but maybe in the future. You know, I can only speak for the podcasting space, but I think it's relevant to this. Like, it's weird to me how it doesn't scale. Like, you can't do programmatic in so much of this stuff because, like, you could do it for, like, websites because you could like scan the text and things like that. But if you're talking about, like, live things like we're doing now or even, you know, even video and stuff, it's harder.

you can't do programmatic because the machines can't make it work. So you have to do that sort of hand-holding stuff. You have to have that relationship sort of building. With podcasting, it was easy because I, listen, I know all these people, they all just moved over from radio, right? For good and for bad for podcasting.

But it's weird to me that like it is still madman stuff where you have to have these relationships with these networks and with the creators and like and the advertisers and it's like well we have to trust that there's content that we can put about it so like it's it's not it's not as easy as doing programmatic or whatever um i want to bring simon in here um simon owens has been on before like kaya um you know his media newsletter because i go to simon for stuff like this. Like basically,

he covers the ability for folks like me to be, you know, solo brands and things like that. Simon, let me broaden this out by asking you, 18 months ago, when we were talking, when Chris and I were starting to do shows like this, we were talking about the creator economy as like the next thing, the next big thing in terms of investing and like where Silicon Valley was going.

and then the Metaverse sort of stole that fire? Like where do you think we are in terms of the creator economy and capital letters being a thing that big tech platforms actually give a shit about? I mean, I think it's still a huge market and I think it still has nowhere to go but up in terms of just you see, you know, the year over your growth in terms of, you know, you know, the number of people who are supported by the creator economy, just YouTube alone, how much money it's sharing with creators, the massive growth within the podcast industry, it's doubled in size in the last year. It does, you know, it really, there's just so much growth ahead of it. But we're also seeing some like macroeconomic conditions right now that are kind of cooling down the market where there's a lot less free money that can be used to just throw around.

obviously, you know, changes to Apple's privacy, the Fed, the Federal Reserve raising interest rates. There's like a lot of like less free money from D.C.'s and also in terms of like investments in public markets that all of a sudden investors are being a lot more skeptical. And that's why you're seeing like the cratering of stock prices for like Snap and Facebook. And and I'm sure we're going to talk about substack and stuff like that. But it's just the market is just cooling down. So these huge advances where they're just throwing money at media companies, like for Snap to, you know, they're paying these huge premiums for them to, you know, I saw, I remember they were paying upwards of like $50,000 to $100,000 permitted a video on some of their original series. There's just like there's a little bit less, like, just free money to throw around. And I think that's what Chris and I are trying to get at in the same way that three or four years ago, if you were in Hollywood, everyone was throwing money at you because.

everyone was going to streaming and they needed content. And it's sort of, you know, an analogy could be made to the whole business model of like the Ubers of the world where it's like, or the go puffs where it's like everything is like VC subsidized sort of growth thing. Simon, do you think it's gotten harder this year, 2022, to be a creator because sort of the VC subsidy tap is kind of shutting off? No, not necessarily. I mean, I'm speaking to the general creator who doesn't have access to those

huge advances that are paying off. Like, I'm still seeing, you know, steady advertising demand. You know, we haven't actually entered a recession yet. So there's still strong market forces, strong advertising demand. Consumers still have money in their pockets to pay for subscriptions. So I think in those terms, like if you're trying to build, I diversify, business right now, media business right now, that the market wins are still at your favor. But, you know, as I'm sure we'll talk about a little bit more, some of that free money is

drying up in terms of you see Facebook now is closing down its news platform. I think it's going to, Kaya might know the correct news, but I think it's either closing down its news tab or it's just taking away all that free money that it was giving to news publishers where it was paying like the Wall Street Journal, the New York Times, upwards of like $5 million for nothing. All they were doing was just posting their links to this news tab. Or, you know, the money that Snapchat was paying out for original content or substack. You're seeing them really kind of, like, as Kaya reported, starting to wind down some of their huge advances that they were throwing out to all these star reporters who weren't really committed to the platform, I don't think. and weren't building sustainable businesses,

and they're seeing in their numbers that they didn't pay off in the way that they thought they would. And so I think a lot of you, I think so if you're building a sustainable business, like the tech meme right home that's built on like a solid audience growth and business foundation, I think you're still good. But if you're looking for those huge cast advances,

those are probably starting to dry up a little bit. Well, let's go ahead and do it. Kaya, the substack, reining in writer cash advances. They had health care stipends and things like that, but also, you know, the reporting is that they tried to raise around and no one was taking. And so they need to cut back like everybody else. Everybody in tech is tightening their bells right now. But substack specifically, what are you hearing inside of substack and how they're thinking about Yeah, I mean, all that's 100% right. I mean, they tried to raise a series C, the New York Times reported in late May, the story came out. And I was able to speak with subsex co-founder Hamish McKenzie this week. So I got a little bit of intel from him, but he had a quote that was pretty, I thought, you know, really got to the heart of the problem. I mean, he said that 2021 was a year they could, you know, be less cautious. And, and, and, and, you know, really got to the heart of the problem. I mean, he said that 2021 was a year they could, you know, and, and, and, and, and, and,

just kind of use their resources to fund, you know, splashy advances and offer services like healthcare to top writers. And now he said pretty bluntly, we have to be more cautious. And he said that we can't bank on easy to get venture capital at good prices to be there. So, you know, he was pretty blunt with that. They're trying to do, you know, focus more on investing in features that are more scalable. I'd be curious, Simon, if you've seen this help, but they're They've been crediting recommendations. So writers recommending each other's newsletters as being a big growth driver. So they're trying to really focus on that rather than these individual perk kind of filled deals.

Yeah, and you could tell that they had just so much free capital flowing towards them because they were kind of lighting money on fire. Like if you read at some of these substack pro deals, there was like this slate writer who had like maybe 60,000 followers who, I mean, that's pretty good. that's not that's not bad but they gave him an advance of over four hundred thousand dollars and i'm just like incredibly skeptical that you know in his first year um that he you know basically earned back that that advance and you just saw these huge like brand name writers who were going on to the platform who were probably like demanding incredible advances and how much were they really committed to building an audience on substack i don't know like one of the people i interviewed was

this great, fantastic writer, have nothing but good things to say about his writing, David Kushner, who's written like cult classic nonfiction books that have been turned into movies. But if you looked at his substack, he stopped posting recently right when his advance came up,

but he never even put anything behind a paywall. So I doubt he was generating much money for the platform. So you just saw them like shotguning these advances, you know, all over the place. And then to what Kaya was talking about before with their recommendations feature, I think that substack has been rolling out.

The legitimate criticism with substack in the beginning was it's just a newsletter platform. Why are you giving 10% of your revenue? There's no differentiation. Anybody could do the same thing right. Yeah. But that's not true anymore. It has a legitimate moat. And it's been rolling out new features like crazy.

I could talk about a lot of them. But as Kaya referenced, there's the recommendations feature, which has created legitimate, I would say, based on my own data and also looking at what Substack has released, legitimate network effects that are real drivers of the user reader acquisition. And that's just something that doesn't exist elsewhere. Simon, you're on your newsletter's on Substack, right? Yeah.

And so the recommendation thing is basically, you know, and you love to see it, it's sort of like the blog role. Yeah, yeah. Coming back to life or whatever. Yeah. I can explain real quick what it is. Go ahead, yeah. So basically, it's a completely opt-in system where you as a suffolk writer can recommend other writers that you enjoy on substack, like it's a little widget you create. And then when someone signs up for your newsletter, it automatically, the screen the user lands on recommends these other newsletters that you've recommended and their checkboxes to each one. And they're all checked for opt-in and you just have to push a button and suddenly you're subscribed to all those newsletters. So it comes across as a personal endorsement right at the point that the reader is signing up for the newsletter when they're most likely to maybe sign up for multiple newsletters.

What are the other features you said sort of offhandedly? That's the biggest one. But what are the other things that you said that they have a moat now that is useful to newsletter writers like you? Yeah, I mean, they've rolled everything out from better analytics to segmented lists, all kinds of things you could not get from. free, you'd have to pay top dollar for MailChimp. They also have, you know, now a very robust kind of podcast functionality so that you, if you want to create, you can host your podcast for free on Substack, but then you can also create customized links for your paid subscribers so you could have a, basically a paid distribution of podcasts, so you can put your podcast behind the role, behind the paywall. It has more sophisticated paywall technology now to where I can tease content in different. ways. With my newsletter, I do these Q&A sessions where I answer questions from my readers. And the

first half of those questions, I'll make for free and send out to my free list. But the rest of them are locked behind a paywall. So it's getting more sophisticated, stuff that you can't find on the competitors, like review and stuff like that. I think this is actually a very key and important point. Everything you just described, I mean, one, sounds really great and sounds very writer-friendly and sounds like it may be helping you to run your business on substack. I think that's one of the things that maybe there's a bit of either a bifurcation or a maturation that is occurring where if I were to think about Shopify and other types of platforms that are really focused on commerce and like the selling of things, that there are other

platforms that are more focused on the selling of digital content. And increasingly, you know, you as the creator and the producer, of this material needs tools. You need the ability to, as you said, like, segment your audience to actually carve out or identify who you're most loyal or best customers are and then to treat them with a different level of attention to make sure that they stick around and don't churn. So I guess what I'm getting at, and you mentioned review, which Twitter, of course, acquired, and now I believe is rolling into Twitter right, which is, God, you know, like even as I'm thinking about it now. I'm sort of thinking about the past of Medium and how Medium was one of the first

to have kind of paywalled content or sort of like a writer program. So they were very early to giving people those tools, but of course they were also overall pretty disorganized. And Twitter also seems to be quite disorganized as usual. And so when I think about the laser focus that platforms like Spotify and Substack have on their creators and on turning those or providing the tools to help them build their own business. I guess I'd love to hear you, or am I in the right kind of ballpark with what you're saying? Like, originally, SubSAC started out as like a newsletter platform, but now it's becoming a platform for writers to, like, build a business.

Is that too much, or is that kind of directionally right? Yeah, I mean, I think they are laser focused on treating, I think serving the writer first and maybe the reader second. and I think that's how they kind of orient their philosophy as like how is what we're building actually helping writers. And I belong to a lot of different platforms, social media platforms and stuff like that. In terms of new product rollout, considering that they have fewer than 100 people working for them, the rate at which they ship new features is just incredible. Whereas like review, I got super excited when Twitter acquire.

review. I was like, oh, there's going to be all sorts of cool network effects where they're going to integrate it with Twitter so that you can basically, you know, because every writer hangs out on Twitter anyway, and it's their kind of watering hole. So there would be a lot of synergy between review and Twitter in a way that it could be like a really formidable substack competitor. I don't remember the last time that review, you know, launched a new product update. And I follow this stuff closely. Well, I think review is dead, and it is being replaced by Twitter Right, but Twitter right is not fully rolled out, and Twitter Review still exists.

So it's in this kind of limbo state. Yeah, but will Twitter write, I haven't seen an indication that there's going to be a newsletter component to that, which is very important for anyone who's building a business. 100%. Yeah. Can you actually, in building on what you're saying, as I'm going through Substax product blog, one of the things that they're talking about, and of course, this is, I think, part and parcel to the creator economy.

And I don't know to what degree this is about user acquisition for the platform or whether it was a necessary recognition about what creators need to do to cultivate a keyword here, community, in order to sustain their business. So my question is about substacks adoption and promotion of community features. Because like you said, I too was excited about Twitter's acquisition and review. I was moderately excited about Twitter launching communities. It feels like, and I don't want to overemphasize Twitter, but I guess in a way, I'm sort of chagrined or just kind of flamed about how much stuff Twitter has launched that doesn't seem to have a coherent narrative or story or experience when it comes to creators building for the creator economy. Like, for example, I have a tweet on how I think I've been in the Superfathers program for a year.

I've also had Twitter tips turned on, and I've made a total of like 100 bucks, you know, and Apple took 30% of that. So clearly I'm not able to make a living on Twitter, being a creator, yet they have all the features. Whereas if SubSack has community, are you using those features and are you finding them valuable and useful for what you're doing? Or are you sticking mostly to the writer tools and the paywall features? Yeah, I mean, I think with the community, they started to witness it with their own writers. Their thesis in the beginning was that there should be a fair exchange. price for, you know, premium content and that the only two things that a writer would produce is free content and content behind a paywall. But some of their most successful writers kept

almost 100% of their content in front of the paywall and yet still saw tremendous success through doing things like, you know, by pitching the mission of what they're on. So like Jud Legume is one of the most successful political writers on Substack. And he's making, based on my calculations at least a half a million dollars a year, he doesn't lock anything behind a paywall because he's pitching them, he's pitching his readers on supporting his mission of holding Republicans accountable. And then they also noticed that a lot of a lot of substack writers were keeping their content from the paywall, but they were selling on the community. So they were using things like comment sections and substack has long had this tool called threads. And you got the content for free, but you got to participate in the community. community as that was the perk for becoming a paid subscriber. So I think, you know, the reason

that they're, they're suddenly all of a sudden, like, acknowledging, like, they, I was surprised recently, they acknowledged in a blog post recently that a lot of their writers aren't locking stuff behind a paywall. And so it's them realizing that there are other things that you can sell other than just paywall content. Well, okay, to that end, and Kaya, I'm going to pitch this to you, because I think maybe you've done more reporting on this. Substack, the story is, is like, oh, look, they, in a way, they've done what Medium could never do, except for the fact that, like, what if they're going down the same cul-de-sac that Medium did? Because, like, I'm looking at a recent piece of yours, and I think that we think that substack generated $9 million in revenue in 2021.

they increased their paid subscriptions from 50,000 to over a million. But even if you've got a million paid subscriptions and you're only making $9 million in revenue, do we think that one of the problems is that the race to scale that they're hoping for is maybe hitting a wall perhaps? Yeah, I mean, the $9 million is from the New York Times reporting based on kind of the series C falling through. So that's what they were telling investors when they were trying to raise. So I haven't independently confirmed that, but assuming, obviously, that the New York Times is right, it's tough.

And trying to raise at a billion dollar valuation with $9 million in revenue, you know, last year, sure, this year, absolutely not. So I think they're rethinking their strategy is what's happening, where they really focused on, like Simon said, getting some of these really big flashy names, especially journalists to leave. But then even, you know, Hamish in our interview was like, the history professor, Heather Cox Richardson, like she is way more popular than Glenn Greenwald

or Barry Weiss or some of the big, you know, names they came on. So I think they're realizing that, like, we might not know who's going to be a huge success on substance. Well, and Helen doesn't lock any content behind a paywall. Like it's all like her only, her only perk is the community, you know, participation. And if if no one puts it behind a paywall, then does Substack get a taste of anything or not?

Yeah, they get a taste of every payment that goes through substack. But what I'm saying is, is if it's not behind a paywall, like if the most successful people are putting everything out in the open, then where's substack go? Yeah. I'm not sure I understand the question. well if they're yeah so basically if they're not able to take a cut i mean i think people still pay to subscribe to her to support her and get her i see what you're saying i see what i see what i got i got i got but there are there are some people on substack like the guy who does slow boring or um right he he doesn't have a there are there are and uh ryan morsey at the rebooting like they don't sell any subscriptions they monetize completely through um through uh advertising and sponsorships, and currently substack doesn't get any cut of that. Right.

That's kind of what I was asking. If the most successful people, like, if I met Aglaecius, I think he's the slow boring guy. Sorry, it's not a Matt of Glacius. Who's the guy who does, like, the long sponsored post? He's like a tech web three guy. Patti. Patti McCormick.

Yeah, that's what I was talking about. Yeah, yeah, yeah. But that's the point is like if you're Pachy, Packy makes his money from his fund. Okay? If you're Matt Iglesias, we believe he made the better part of, I don't know, three quarters of a million dollars in up front and things like that. Like, there's the incentives for the people that have been successful on the platform,

if those are drying up, like, it feels to me that Substack's business is sort of in danger. I don't know. I see that Matt Navarra has jumped on stage. If he wants to add some specifics, I don't know what he can speak about, but Matt, go ahead and speak whatever you're comfortable with. Sure. Hi. I wasn't going to go to bed, but I can't sleep.

So, hey, I'll join him for five minutes. Yeah, no, I was interested what you were saying about the Twitter newsletter and the Twitter notes or write or whatever you want to call it because obviously I have my newsletter which goes out through the Twitter platform which was when review was review and not part of Twitter. And I also am on the Twitter notes beta. And I was just DMing with Chris before I spoke to saying it's going to be very tricky because I'm NDA for so many of these bits

that's hard to kind of dance around the topic. But what I can say is that I personally haven't been overly impressed with write and Twitter notes, but I like what they're trying to achieve with it. I think that's the nicest way to say it. I'm unsurprised but disappointed at the fact that, again, it's kind of a bit like Twitter communities and a few other recent product launches.

It kind of launches with a bit of fanfare and a bit of public discussion about developing in the open and things. And then it kind of just seems to be, not abandoned, but certainly nothing really happens very quickly. quickly with it and then it kind of goes quiet and I feel like that's kind of happening with Twitter communities but also I wonder whether it was similar thing will happen with the the notes thing but what it does look like to me is and it is a personal opinion is that the notes will be the focus I think going forwards as the writing platform but I'm not

utterly convinced that it's going to fly very well and I guess it will depend on how much it ties in with super follows and not that that's particularly taken off very well and how well it can kind of weave itself into the other products which could be monetized as a package of things but yeah I think in terms of Twitter in view I think I've kind of already aired to Twitter I'm very disappointed that the platform is pretty much stagnant and and if you're a Twitter newsletter writer through the review platform you must be feeling pretty pretty fed up right now but that's my take about what are your you know Matt you You obviously published on a number of different topics, and you know, you've been able to make a living, you know, doing this as an independent journalist and observer of, you know, all sorts of things.

I guess how would you rank, or maybe not rank, but just kind of evaluate the number of greater platforms that you see out there, you know, relative to your own experience with them? I understand, you know, your comments were just sort of about the specific maybe features or, you know, kind of what Twitter has. has to offer, but how do you think about Twitter, you know, writ large in the greater economy in the creator space relative to meta and Instagram and to, you know, even TikTok? It feels quite a scary place to be for me at the moment with Twitter as it is, because my biggest following is on Twitter and I make my kind of presence on social, most known through Twitter and I've invested heavily in the platform. And so right now with everything that's going on, there's so much going on for them at the moment, it does.

feel a precarious place to be a creator who is, you know, has a heavy sort of investment in them. And I obviously try and diversify what I do in other platforms as well. But that's an initial kind of thought of that. I think that they don't, I can't imagine for creators that are sort

starting out or kind of got a smaller following or an audience that they stand out as being a good bet right now. I can't, there's nothing that really would incentivize me as a new creator to be using Twitter other than what a lot of people do, which is it's just a very quick and easy distribution platform if you can build up a bit of a following. And, you know, there's tried and tested techniques. So if you want to get a big following on Twitter,

we all know probably what we can do to get that very quickly, whether we want to do it or not. And then just use it to just shoehorn traffic and people towards something else that you're doing on a other platform, you know. So it's basically pushing elsewhere. Well, one more, One more question about this. But I think they're muddled. They're confused still. They're throwing out things left, right and center. There's people quitting all over the shop.

The number of people I've spoken to Twitter that have either publicly, but also not publicly, just kind of bailing on the company now. It does feel a pretty scary time for them. And I wonder if anyone's going to come in and rescue them at all. In terms of writing other platforms, you know, I'm particularly impressed with, I don't know how to pronounce it or Beehive or the Heath. Their platform looks really hot in terms of the amount of features they're churning out for news leather creators. It's been pretty impressive. That's the one that for me, if I was to jump on Twitter.

B-E-E-H-I-I-V. It's a guy or girls that were behind the, what's it called, Morning Brew? Yeah, and that's pretty good. Substack did try and tempt me about three months ago and tried to say, we'll give you this, we'll give you that if you come here and all that kind of stuff, but I didn't go with that option. Now, Matt, you can't. They've pulled it all.

Yeah, I know. I was a sucker. But the thing is, mine's a tricky one because I've never monetized through doing like paid newsletter. And that's not something to say I work in the future, but it's not been my strategy up until now. Mine has been as many people as I can to subscribe for free, getting advertising in there. And that newsletter on the geek out now, I think I've publicly talked about before. Once a week it goes out, it's free to everybody. But it generates over $150,000 in revenue for that quite email.

And that's just from sponsorship and answer each month. So for me, it works. And that changes for me the dynamics of which platform I go to because a lot of the platforms geared around making it easier to kind of put paywalls up and managing your paid subscribers. And that isn't so important to me right now. So, yeah, it's interesting. But I haven't done. One more thing for me.

Any, are you interested at all in Twitter's podcast offerings? Good question. So Twitter space, I do on a Friday, the Twitter space, which kind of, I've been a bit sloppy in recent weeks. And that's always been to me a good. Social media geek up, right? Yeah, because like we did do a podcast. podcast and we had it sponsored by Pinterest and they've sponsored it for like two or three seasons and it had

really good guests and it was and it did perfectly well but the the time it was taking to produce edit and anyone who does podcast knows you know to do a decent one it takes that amount of time but to do it if you're not getting paid and or with the hope that someone will sponsor you or you'll get some ads in there is a lot of work for something you might not get anything for so we decided in the end that we would only do another podcast if we up front got the sponsorship. And so the halfway house for me and for a lot of this is to do Twitter spaces. But now I think the podcast component, which I know is distinctly just pulling in the RSS feeds, the podcaster.

But for me, it might be, it might encourage me, motivate me to do a bit more of a kind of polished version of the Twitter space that would be good as a, as a podcast. Which I know we've done with you guys before. We were putting it into your feed for your podcast feed. So, but overall, I think it's a good idea. I think it makes sense, you know, it doesn't feel like a huge job for them to pull in on RSS Beads podcasts and give it a space for people to clip it up and share it out. That's got to be a good thing for podcast creators. And people do, if they're like me, we'll browse Twitter and have that on in the background like I do with spaces.

So it makes far more sense. I think there's more mileage in that than there is in pure Twitter spaces as a, as an audio or social audio platform. I think I've got three more questions and then we can wrap this topic in case people need to go. But for all three of you on stage here, one of the things,

and again, I guess I'm a creator in the space too and I've tried subscriptions for podcasts and things like that. Look, I've proven definitively for my own business that advertising is just easier and makes more money. I'm just going to throw this out there to anyone that wants. To premium subscribers and subscribers and sons. Yes.

For me, and I think for a lot of people, but that's what I'm kind of asking for anyone that wants to comment. What if the whole idea of the creator economy and people paying for content and things like that, like what if it just isn't enough? What if that's not the right business model for creator stuff? Like what if everybody has to just go back to ad support? Whoever wants to take a crack at that, let me know.

So this is something, yeah, I've become more opinionated on, especially within the last year, is I think there was this hope, this great hope, especially around the time, 2017. 2018, when Substack first launch, you know, Ben Thompson had had so much success with his paid subscriptions. The New York Times was doing gangbusters. All of a sudden, every publication was launching a paywall. And there was this hope that readers were flocking towards paying for content again,

and it would be the great savior of media. And I think, like, the last year, there's been a legitimate subscription slowdown, not just with Netflix, but you see, you know, the Wall Street Journal is worried about, you know, it's user growth. The Washington Post just reported that it's, or the New York Times just reported that the Washington Post is actually losing subscribers. I think a lot of substack writers who go, on to the platform all gung-co about how they're going to get their thousand true fans are just

running into a brick wall. And I think the reality is, is that, you know, revenue diversification is going to need to happen for the vast majority of creators who want to make a living with it. You know, I opened up to sponsorships at the beginning of this year or in the March of this year, you know, virtually overnight doubled my revenue and started making something close to living wage. I think it's definitely, I think you're on to something, Brian, that's, you know, paid subscriptions alone are not going to get the vast majority of media companies or individual craters across the finish line. Kaya, are you hearing something similar? Is there sort of subscription fatigue out there going on right now? Yeah, I mean, two things I'll say. The vast

majority of creators I speak with brand partnerships are their number one revenue source. And even with YouTubers, yes, AdSense makes up a big chunk, but really the brand partnerships that they cut independently is generally the biggest revenue driver. I think, too, what's at play is culturally, you know, you mentioned tipping, Chris. It's not something that we're used to doing online. Like, if you look at China, totally different. Huge online tipping culture. And there is a sense that, like, of course, I want to support someone and I want to pay for something. But that's all going to be a really small percentage of your fans. The majority of people were used to using social media for free. If you look at Twitter Blue or Snapchat Plus, the numbers are tiny of

people that are willing to pay for social media and the numbers are also tiny for... I mean, we'll see. Once we get the edit button, you know, and the edit button's five bucks. You know, might change everything. I'm just kidding. I'm definitely paying $5 for that. Yeah, but I think just it's still a, it can be a foreign behavior. We've seen, you know, know, some areas buck that trend. If you look at gamers on YouTube or Twitch, I mean, huge part of that comes from subscription. Tipping and subscription to like live stream seems to be, there's much more a product market or at least sort of like a pain as you go kind of. And also, there's moments where, you know, live streamers will like stop and they will ask you and they will

tell you the thing to do, right? Whereas for me, I'm not going to, you know, change every fifth tweet to be like, hey, guys, you know, please tip for my awesome tweet content. You know, people like, screw you, Messina. Like, whatever, your content's free and it's shit, you know? So, like, I get it. But you don't know what I mean? Like, it's really hard otherwise to turn this into like a real, you know, I mean, it can be like a side side hustle, I suppose. Yeah, and too, there's other ways to do it, right? Like some creators are super successful with selling their merch. And that's, but I think when there's a, when a fan is getting something in return, like, yes, they have the good feeling of supporting you. But with Twitch, right,

they're shouting out your comment or their, your comment is getting pinned. Like, getting something. And I think just this one-off tip jar that's buried that you can't even find on Twitter. There's no satisfaction. It's like dead. It's like, you know, when Steve Jobs said, like, you know, all the sex was like out of the computing industry or something and then invented by the iPhone. It's like the same thing. It's like when you contribute to a creator, you want to feel somehow connected, like that there's a bond, you know, and granted, I don't till the live Peloton shows, but every time like the Peloton person is like, oh, shout out to some weird, you know, abstract username, you know? Like, that's got to be so meaningful for that person.

I have to this, I have to say it into OnlyFans. This is the second of my third question. And Kaii, you wrote about this today. OnlyFans is the most, well, YouTube's probably the most successful, but the most successful creator platform in existence. Is there something we can learn from what they're doing versus what other people are doing? I mean, sex sells. I mean, Steve Jobs wasn't wrong. But it is funny because we're talking about how subscriptions and tipping isn't sustainable and only fans is out here saying that creators have earned nearly $4 billion, which is up

150% from the past year. Clearly, I am in the wrong business. Yeah, and look, it's not all adult content, right? I mean, like, Rebecca Minkoff is all there. Do you know what percentage it is? I mean, like, you know, how many are actually chefs and, you know, I would love to know. They're not going to tell you that because I feel like they're trying to, you know, they're

committed to the adult content, but especially with the new CEO, Amy Ann, she's really trying to push their, you know, SFW app, OFTV, which is, you know, not having any sexual content because you can't have that on that course. So, yeah, I mean, that's, but it's a different model, right? Like, it's a totally different type of content and the foreign business has always been really lucrative online. But it has given a platform to a lot of sex workers and other creators who, you know, are able to have a really safe, a safer living now. Although there's all the harassment issues as well, which we won't get into today. But yeah, they've, and what I think will be interesting is a year from now what their 2022 numbers look like.

Because we have to remember, this is for the year ending November 2021. And we were still, you know, Delta, overfrog. That feels very misleading. Oh, right. That's what they're reporting on his last year. Oh, yeah. Yeah. So this is still, you know, this is still riding the coattails of the pandemic.

So it'll be really interesting to be. Which in theory, that sort of pandemic head fake could be applicable to substack, could be applicable to everything we're talking about. Okay. The last one on this topic, and then folks can dip out, and Chris and I might still commiserate for a while. But we haven't spoken about TikTok, and I want to bring up TikTok for anybody that wants to comment,

because I want to say that, like, I was talking to a VC recently that said, essentially any startup now, their marketing plan is, oh, well, we go on TikTok, which five years ago it was, well, of course, We have AdWords and we go on Facebook and things like that. And it's true. Some of the companies that are DTC that pitched to me, they constantly say,

oh, what marketing have you done? It's all been on TikTok. So anyone that wants to comment, to what degree either from the creator point of view or from the brand advertising point of view is TikTok the whole game? the whole game right now, basically? I've noticed, I've noted in my newsletter that like anytime any creator gets any traction on TikTok, they almost immediately start trying to move that audience over to YouTube. They launched some kind of more long-form, long-form video series on YouTube because that's

where the monetization is still. And I'm sure you've all seen the video that went viral several months back from Hank where he talked about, you know, how terrible TikTok is for monetization in terms of the creator fund and everything like that. And like Kai was talking about, I think, like, a lot of, you know, influencers are having a hard time with brand deals because they're just having such a hard time predicting the actual performance of any one video since there's, since there's, like, such huge swings in viewership, depending on, you know, what the algorithm face. So you look at any of the top TikTokers and they're trying to move their audience over to YouTube.

One last thing I'll just say quickly is I think also these campaigns sometimes can take a life of their own. In the story that I referenced from Sylvia, a lot of these, they were doing a lot of these hashtag branded challenges. And Starbucks did one with Chance the Rapp, Chance the Rapper and they encouraged users to do a duet. And the TikTok users just like thought the class. clip was really awkward and we're like mocking it. So then it went viral for the wrong reason. So I think too, yeah, some of these challenges can really take a life of their own and for brands that are wary of this.

It just might. And that's why TikTok has moved away from some of those types of challenges. But there's definitely a flip side and kind of a risk for brands to advertise on TikTok. I was just going to add from the point of view of what's next for TikTok or what they seem to be focusing on and certainly looking at the code of the app and speaking to other people that are sources for me. Some of the things that are beyond the obvious things which have been in the news to do is shopping, for example, is a bit of that classic situation in social apps where they kind of merge in the middle where features that the other platforms

have got that TikTok hasn't got, it's now desperately trying to catch up with. And one of those particular areas of it's trying to speed up and catch up on is friendships and messaging and private personal acquaintances and connections, all the things that people are complaining about now, met us or stepping away from slightly, and the things that Snapchat was built around, with direct messaging functionality, is something that TikTok is clamoring to kind of now quickly build up in the background

because it hasn't really got it so strongly. So a lot of the features in the code that I've seen all talk about, upgrades and improvements to direct messaging, updates and improvements to helping you find and maintain personal friendships and private sharing and doing all those kind of like close acquaintances things which we're used to with other apps as well as the local parts so the local shopping the the map features which is something that made them sort of signposted last week and trying to again snap maps snap maps around for a long time has been very successful and for them and that's something that that instagram also has some sort of version of

is doing more with now or TikTok is kind of pushing on that combined with its search functionality that it's starting to bring in on its own to kind of, you know, compete with Google, which is an interesting kind of play as well. And then finally, the end of the point I was going to make was to do with, which reiterates what some of the others were saying about creators and that it's easy to somewhat exciting and enticing to that you can go viral so quickly and become a overnight sensation on TikTok but maintaining a connection with an audience, sustaining a creator relationship with an audience and monetizing it is proving to be hard for a lot of creators and so you go there for to be viral

but you you head off to somewhere else to make the money and and create a living out of it and I think that's the TikTok's going to be a challenge that they still haven't quite figured out and that's something that YouTube has a very big leg up as does Instagram as well. It's it's still multi-skew as Chris said at the beginning it's still you you have lead gen on one platform and you make your money on another I guess it's it's still sort of sliced up and and all over the place but I want to I want to offer the three people that have been on stage so far the chance to go if they want Matt Dovarra is

a geek out I think he does spaces but he does newsletters search for for him. Simon Owens is, Simon, what's the name of your newsletter? It's the media newsletter. Yeah, if you just Google Simon Owens' newsletter, you'll find it. And Kyairyev is a reporter at the information covering this stuff, so you'll hear me quote her all the time on the show, but also search her out on the information. You all are Welcome to stay. But Chris, I think we're going to slightly pivot a little bit. Yeah, we thought we'd open up before a little bit more.

I was just going to jump in if I can for a second about TikTok. Yes, yes, please. Excellent. And then I'll get back to work. Well, and Chris, or introduce yourself, or Chris introduce Perrin? Yeah, Corey, go ahead and introduce yourself. Introduce myself? Okay, hi.

I'm a digital media consultant. And I can see quite a few people in the room are in the journal. in the media space, generally, so I'll speak to that audience. I just wanted to talk briefly about thinking about branding on TikTok. Earlier this year, I was approached by Jay Rosen at Columbia University on a really interesting project, which I think more organizations could, you know, adopt and adapt, and it'll be talked about at ONA this year. So Jay had engaged his master's degree students who were studying journal.

journalism to develop a brand, research and develop a brand presence for The Intercept. And the thing about The Intercept, of course, is it's hard news, it's investigative journalism, it's a lot of body cam footage, that sort of thing. And so it's quite a difficult get for the TikTok audience, so that makes sense. So I was doing quite a lot of research around, you know, how do you match your brand presence to that platform. And I've also just finished doing some work with a Sydney B2B publisher here in Australia where they have around 40 titles and they're a range,

you know, so some of them are construction and, you know, building pools and so on and some are in the printing sector and some are in the pub sector and some are in health and beauty. And I guess the point that I want to make is like, I really, what you said earlier about the rush to TikTok, I think everybody should be really sitting back

and thinking, okay, what is my brand presence on that platform? Because it's not a good thing for everybody. You're talking more strategically, or do you mean just in general, like whether or not you should? Or is this like, you know, this is an imperative? No, no, not at all. I think that one should have a strategy as to whether one should. Yeah, I think what I find is we're sort of in this, God, what is the word?

It's sort of, yeah, I guess like an imperative to some degree. Like the narrative has shifted, you know, the worm has turned. And TikTok seems to be this mysterious thing that you, it is a vortex that you have to put yourself into and throw yourself into whether you want to or not. I mean, it's not too similar from the way in which Instagram, of course, was trying to get everyone to start producing video, whether they wanted to or not. What I find also interesting... I think...

Sorry, just to jump on that, though. I think our industry has done that a lot over many years. Oh, 100%. You know, so 2015, it was chat apps, and then 2016, it was WhatsApp. And then, you know what I mean? Voice assistance. Oh, let's go and do that thing. Yeah.

And, you know, to your point for this conversation, you know, you know, at the beginning of the pandemic, it was quit your job and start a substack, right? Yes. So, and here we are. That's going to be how everyone's going to make their living. It turns out everyone is a much smaller number of people. So it's really sitting there and thinking, what's the brand fit for my organization? Or if you're an individual, what is my, what is my personal brand, you know, and what's at worth?

I think, you know, Chris, you and Matt have a strong personal brand in ways a lot of people that think, oh, I could do the same thing. I mean, I guess you have to be sort of weird and idiosyncratic and somewhat like OCD. But my question then is there seems to be, on the one hand, a passive aspect to TikTok, where, you know, one is just creating content on the platform and getting used to it like any other medium. You know, it's just sort of a, there's a new set of ticks and conventions and things that you need to learn in terms of producing good and interesting content. Now, that sort of presumes that your goal then is to actually go viral to sort of have the algorithm pick you up and then put you in front of a bunch of people. and that somehow that will be meaningful. Now, of course, that's more flash in the pan, which from a business perspective actually isn't really one sustainable or that meaningful.

So my other question, since you're talking about TikTok strategy, is actually about the search side. What I've been hearing more and more about is that a younger generation, in fact, actually the head of Facebook's feed product was on, oh man. Oh, Land of the Giants Pod, which was on the Vergecast, I think, anyways, on a recent podcast episode. And, you know, I thought it was actually a very interesting episode because he talked so much about changing norms and behaviors from a younger generation that's growing up with the

assumption that content should be video first, right? Those of us who grew up on the web, we assume that content is sort of like text first, it's the most accessible, it's indexable, whereas the younger generation grows up imagining, you know, if you think about like all the TV stuff that we watched, you know, earlier, that all of that stuff should just be indexed and available as short little clips and snippets. Why shouldn't it be that way? So given that, then it's actually a different type of impetus, which is to say that producing video content, content as video, regardless of the platform,

though, of course, the most relevant platforms right now are meta and, well, I suppose, Instagram and Reels to a Lesterlysterlysserree Snapchat and obviously TikTok. How much is search? And YouTube. Yes, of course, YouTube. Thank you. And Schwartz. Like how much do you think video, just like, like sort of, you know, it used to be about search engine optimization.

Now it's sort of like a video engine optimization or recommendation engine optimization, to quote Mike McNano, who we had on before. How much is that part of the strategy that you have to think about going forward? You just need to be there, and it's not really about the viral aspect. You know, Adam Messeri put a tweet out a couple of weeks ago where he said, you know, video has got to be part of your strategy, otherwise it shouldn't be doing it. Doing what? Doing video.

as in creating video content at all. It is the most time-consuming of all media products. You know, it's a beast. And to make not just TikToks, but good TikToks, you know, you need, I mean, you don't need to invest heavily in equipment because some of the really good content is just first-person storytelling. But you do need a good idea, so you've got to have the time to do that. And then just creating that content does take longer than putting together a,

you know, well, it's about the same podcast, right? So a good one, maybe one a week. But to your question about virality, I mean, I think it's always a case of building a community around a topic. That community doesn't necessarily need to be enormous. I was just recently a judge on the publisher podcast awards. And one of the podcasts, I was looking at the revenue category, and one of the podcasts had built a really good income stream, you know, and everyone was, oh, how many, like enough, right? They were making a good income on 250 downloads, but those 250 people were the exact

overlap of one of their sponsors that was willing to pay quite a lot of wanting to reach those people, you know? Yeah, yeah, and that's the right kind of niche. Corrine, thank you. I wanted to bring up a bullish studio. I don't know if that's the best way to address you, but you've, you said that you had some insights about some of the numbers that you wanted to share. Yes.

Hi. My name's Brian. I'm the founder of Bullis Studio. I've worked in media and advertising for like the last 10 years. They started as a media buyer for Samsung, helping them battle Apple against the iPhone as the Samsung Galaxy phone launch. It's a pitched battle there. Yeah, it was, we went from spending 75 million a year to a billion a year and like did like everything.

Did it work? Oh, yeah. It was wild. I mean, like, the amount of money flowing was just out of control across like all media types from like outdoor down to digital and like all the crazy like ad tech stuff that you can do like eight years ago. But then I jumped over to Vice and really started to understand premium content and monetization and rode that wave for five years.

And then really wanted to focus on finance and like opportunity. of financial media for Gen Z millennials as the wealth transfer, all that fun stuff is happening. And I didn't want to become a bloated media company, so I decided to sign a bunch of creators on every major social platform and newsletters. So folks like Perri Patel on here and ramp capital, and there's a bunch of other newsletters that we work with. I know we were talking about substack and beehive earlier. We invested a small little check in Beehive.

honestly like so we see a lot of money that rolls between brands and creators like in the millions between our like top line revenues and then gets passed down through us to the creators my honest take I think on a lot of this is like video is an empathy machine and is worth 10 times more than really anything else and with newsletters and stuff there's like a lot of like riches in the niches but I think so much of it has just been like so overhauled typed and like you know the sub-sac numbers coming out and the fact that they were even like kind of be looking at a billion dollar valuation I'm just like yo there are like WordPress plugins that do more revenue than them and like they're just like operating silently in the background but like

because the whole VC buzz around and I'm like what is like does anybody know about woo commerce and how big of a giant they are like you know I don't know I think that there's just so much outsized talk about that And then, I don't know, just so quickly address some of the TikTok stuff is like, you know, there's cheap reach there. You know, it's like if you're a brand, you know, you can go viral. You can get a lot of cheap views. Is it meaningful or is it cheap? No, it's cheap and meaningful. It drives results.

Like, it is like all the brands that we run TikTok ads for, it is the by far and a way the cheapest cack that you can get. Now, you can have some questions on the lifetime value and the age and all that other stuff. But like, honestly, it's just cheap. And the arbitrage opportunity is the fact that the biggest brands like the Samsung's are nervous about spending that extra $10 million a year into TikTok because of all of the hesitancy around whatever the latest news story about TikTok is. And like that that's still getting held up in traditional television. So in some ways, the fact that it's still somewhat the while while West means that actually the rates are lower on TikTok, whereas a highly moderated platform. platform, you know, which you can debate with, I suppose. But certainly, you know, the head of Facebook's newsfeed talked a lot about their moderation AI and capabilities there means that

it's a much safer place for advertisers to play. The same story was Spotify to some degree. Yeah, but that's, yeah. But still, YouTube is the machine. It's always been the golden nugget. It's the highest CPMs and it's the highest quality content because if you're running mid-roll on a 20-minute video deep in a topic, whether it's guitar lessons or financial advice, that ad is going to cost a fortune and it's going to pay the creator a nice rip. And YouTube had that formula figured out. But long form video and holding that attention span is been always the most challenging thing,

which you haven't really, I mean, some TikTokers have jumped to YouTube successfully, but it's a grind to really nail long form on YouTube. And once you can nail that, then it's like, hey, then you can sniff a Netflix. It's like, oh, wow, what am I capable of? So one more question for you. Like, in terms of the creator economy, the promise and the premise at least seem to have been, at least from, you know, the Kevin Kelly perspective, that if you have a hundred or a thousand true fans, depending on your generation, you could sort of eke out or even actually make a pretty good living. What I'm hearing you say, though, is that becoming or figuring out how to become, like, a YouTube star or a YouTube influencer or a YouTube person that, you know, runs ads is, like, is a new type of job. It's a new type of gig. And those two things are actually at odds to me because one of the challenges I think that perhaps we're trying to illuminate here is that just being a creator of things that you love may not be sufficient, but you actually have to figure out the medium or media that will support your income, which may not be your preferred medium.

Like Brian and I don't do a video podcast. I mean, mostly because it would be so much more work. And, you know, I at least have a day job. And I know Brian's got a lot of stuff going on as well. Actually, he's got a day job doing the Daily Show. So given that, it would be so much more work for us to try to turn ourselves into YouTube creators relative to being creators in mediums and formats that actually work for us, but that may be ultimately less lucrative. So what is your advice to people that come to you and are like, hey, I've got this newsletter. You know, what should I do? Yeah. I mean, look, overall, like, if you look at the creator economy and a macro level, there's something like 90% of all of it really is brand deals.

And like you can bundle consulting and stuff, but the revenues coming to the brands. All this premium subscription talk, nice and sexy, yeah, you can make some money off of it, but the real big money is still on the brand deals. And I think what I'm seeing a lot of creators do is that they were riding really high off of a lot of, like, sponsored content for a while. And what a lot of them have realized is that because there's so much churn and burn on the brand deals, they want more to long-term partnerships, so they're starting to move more into consulting. And I think now I'm starting to see more creators start to do consulting, long-term partnerships.

with various brands or whatever, where they're just not even appearing on the brand's social channels. They're just helping them tell them what to do. They're doing their editing, whatever. And that's like becoming more lucrative for everybody because it's cheaper for the brand because they can get videos for a fraction of the price. And it's super optimized for the platform.

So it's a really efficient way for everybody to get involved. But I mean, look, like, yeah, it's, you know, I think everybody also, like, nobody on Twitter makes any money. Everybody talks about all this stuff. Like we work with some of the biggest creators. We found these like weird little hacks and tried to do all this stuff. You cannot make money on Twitter as a creator. Like there's just no money in it.

Instagram and the amount of money that meta pays creators as a percentage of their revenue is honestly insulting. And like that like when it comes to like people running to TikTok, like, who are just running to over the money and the eyeballs are? And like, you know, the second that Zuckerberg turns his knob a little bit more into giving another billion dollars or two to the creator fun you're going to watch all the creators just run from TikTok to start doing more IG lives like they just have that knob on such a close I mean like I live through the pivot to video and it was like uh oh like literally 25 people advice got laid off one day because it looked into video and like you know yeah so anyway I keep going let me round this off by asking the question

that I asked about a half an hour ago which is the thing that was said to me this week was if you're a consumer-facing brand, essentially what you're doing right now is operating a TikTok account for all the reasons that you just said because it's cheap and it gets tangible results. Is that what you're seeing too? Is that like if I'm a startup that's trying to pinch my pennies and get the most bang for my buck in terms of marketing and customer acquisition, TikTok is where it's at? Yeah, for sure. Like, for example, like, I mean, I, we do a lot of, like, financial services and stuff, but, like, I know that, like, a big area is, like, SaaS, like, the no-code SaaS tools. There's a kid I came across who has 20,000 followers on TikTok and just does, like, no-code tutorials of, like, Webflow airtable, like, you name it, random new, like, consumer-facing tinker tool, like, $10 a month. And, you know, all the, you go to him, you pay him $500, $1,000, you know, you. You know, you give them an extra $1,000 in exchange for the rights to the ad to use that.

He makes a quick little UTC demo. That ad will be the top-performing ad in that entire SaaS company's like next three to six months. And it will just drive people. And they can just hyper-target if they know what they're doing and spend, you know, very little money to run tests like that. And that's a $10, $20, $30,000 campaign if you want it to be. But yeah, that's the opportunity. I might need to get in touch with you offline because I need to learn more about this.

Chris, how are you feeling? I think we're good. I think we've covered a lot of ground. You know, I think when it comes back to the original question for today's show, you know, is the creator economy okay? I think the answer is the jury is out and, you know, coming up probably, you know, towards the end of the year and into Q1 next year, I think we're going to have a bit of, you know, clarity on what's going on. And, you know, one of the things I think that I got out of the earlier part of the show and with Snapchat, of course, hiring so many people during the pandemic and then laying a lot of people off. And of course, they weren't the only ones. They just kind of like massively like went hard.

And, you know, that's when the money was flowing. And suddenly it's not. And they're like, oh, shit, really like way over our skis is, I know, I feel like this is a European idea. But like, right sizing. That's kind of what the industry is going through. Like, you know, we've lost a lot of the pandemic overages, perhaps. and dalliances that companies assumed might, you know, have been part of the future being drawn into the present. And so now we're going back to where things were, which probably, you know, if we look at this over a several-year period, maybe normalizes out to more steady-state growth than the kind of explosive growth than I think people expected to the pandemic.

I think my concern would be for creators and the crater economy generally is that as we've sort of all hinted at or touched on in this conversation is, if the big platforms move their Sauron-eye other places, it's going to be harder, you know? But that's always the case, right? That's always the case. As tech changes, as media evolves. Like, I mean, same as it ever was. Same as it ever was. And I mean, that is, that is, I think, the precariousness of being, you know, a creator,

which is essentially a new form of freelancing. You've got to go where the eyeballs are. And so you have a very, like, having a direct relationship to your ultimate customer is mediated and intermediateated. by the platforms. And so you want their scale and you want their ability and you want all the monetization tools that they provide, but then you don't want to be disintermediated because it makes you vulnerable. And that's the sort of Faustian bargain that this generation, I think, is left with. Chris, before we go, were you able to mess around with stable diffusion? I played with it a little bit, you know, and I ended up actually hunting it because I was in touch

with the founder. And, man, there was a lot of energy around that. So for those who aren't aware I know, Brian, you mentioned it on the show. It was the very end of today's show, yeah. Yeah. There are a number of these AI art generation tools that have come out, and there are variations essentially on a theme, and they use different training data to produce different results. And stable diffusion is the one that has come out most recently, and it is possibly one of the more exciting ones.

One, it's fast. Number one, it's currently free. Oh, fair. Yes. Yes. And so they have something called the Dream Studio, and it is wild. I mean, you can go in there and just produce some stuff and you really get a feel for it pretty quickly. I do think, actually, there was another story that you did today that was relevant that actually feeds into this greater economy story, and this will maybe be the last point.

Where, was it Ohio or anyway, some kid submitted. Colorado State. Colorado State submitted some AI-generated artwork into an art contest and won. And I don't know if he disclosed it or not, but of course, this is the first time where this type of thing has really been done, where, you know, know, his wizardry was in sort of conjuring up an amazing image as a result of the prompts that he had apparently spent months. It was a very, very cool picture, I have to say. Yeah.

So, so, but nonetheless, it wasn't his fingers, you know, that was actually producing, you know, pixels on screen or strokes from a brush. And it raises the question as he raised, you know, does it matter what the, the type of relationship is between the artist and the output? or is the genius and the creativity in kind of imagining what might be possible and then working with the medium, which in this case is almost like an interactive medium that you're dancing with to produce a result that is still compelling and is still emotional, even if it's trained on billions of other previous pieces of art that were similarly, you know, emotive and expressive. I think it's a super fascinating question, and it raises, again, like, that is the next generation medium, right?

You're talking today about how the eyes of Soron from these big social media platforms may turn towards other formats or priorities and what have you. But this is a structural change in the way the content is produced, such that all these creators that are producing content today could essentially be obviated by a set of machine learning algorithms that learn how we produce content and then reduce it. I mean, that is actually the, what is it? Well, let me think the thought was, so when listening to. Again, I learned so much from this Verge podcast with the guy from Facebook, that there is an adversarial relationship between the platforms that curate places where eyeballs gather, in other words, feeds and streams, et cetera, and people that want to get into those

streams and be seen and made visible by the aggraition effect. And so you're constantly trying to discern, you know, is the content that we're showing people stuff that they actually want to see? Or have people figured out how to game that system? and such we need to actually reset the rules because the gamers of that system, the ones that have over-optimized for, you know, what was it called meaningful social interactions, MSI, actually turned out to create more kind of chaos because they would show things that caused an emotional response and a reaction. And, of course, the press and the media and political

folks figured out that if you put more of that crap in the feed, that that'll cause, you know, essentially the algorithm to spike and then more of that kind of content will be shown. So that's their role, is to make sure that the content that shows up there doesn't actually have a long-term deleterious effect on the consumption of that content. And so that's the background radiation that's kind of there in this creator economy. Well, so to tie this up with the talk about AI generated artwork, essentially what you just said is that the people that have been successful or are being successful in terms of creating content that works well, on the platforms and the algorithms are people that have learned to work the machines, right? Sure. Yeah. So like, you're, you're, you're an artist that plays an instrument that has specific inputs and outputs and you figured out how to play that violin. Better than it.

Yeah. So with the AI generated artwork thing, like I almost did a little rant on it, but here's, here's my thinking about, I, I'm, I'm, I'm complete, this is one of those things where I'm completely wide open. I don't have an opinion on this stuff yet. But the point that the artist made, I think I quoted his point about this, but he was like, I'm just working the machine. And in a sense, he's right because if you've played around with stable diffusion, which is the one I played around with the most, he used.

He used. Mid Journey. Mid Journey was the toy he used. But it's not easy even, like, if I wanted to create the perfect work of art that I have in my head. It is not like you just do it in 30 seconds. He said that it took him hundreds and hundreds of tries to get the input the way he wanted to get the machine to do what he wanted, right? That's right. How is that different? Like, so I can't. I've just put in the tweet, by the way, so you can see the artwork. Yeah. I currently can't get stable diffusion to,

I can make it do cool things, but not like, oh my God, this is what I wanted. Right. It, it, It is a learned skill to put the inputs into the machine to get back what you want. How is that different than Photoshop? I also cannot do Photoshop well enough to make a mind-blowing photo. There are other people that can because they've learned the tools, they've learned the machine, they've learned to dial the knobs and things like that. Is it really that different? like, or because there's less knobs?

Or is it just, again, it's learning an instrument and getting music out of it that other people can't? I think that's right. No, absolutely. I mean, it's also one of those issues around like sunk cost, where if you've spent your life learning a brushstroke or, you know, learning how to, you know, make pixel art and you've perfected all the ways in which you can manipulate, you know, visuals with Photoshop, Ironically, of course, you probably pissed off the previous generation that was all about making photos in the dark room and using dodging and burning and those techniques that were manual techniques. Now you have an AI that just does those things automatically for you.

And so what's crazy is actually as an artist or creator, you can get much closer. I shouldn't say much closer. You can start to put more of your almost like creative intentions into like manifesting the thought and the expression and then working with the machine in a collaborative way. way as opposed to using it purely as a tool. In other words, like Photoshop, well, I suppose there are some, I was going to say, like, where do the opinions of Photoshop lie? And in some ways, some of the filters that it provides or some of the ways that it, you know, uses color or brush strokes, for example, that are brought to you, you know, for free are kind of like the defaults and the defaults matter. And you have to be really good at a tool and know all the things that you can configure and change

in order to break free of those defaults. But in this case, when you're working, with a generative AI that's trained on billions of prior art and prior examples, now suddenly it's a lot more, it's not, it's not deterministic. Like, what you're going to get out is actually variable. And so therefore, you have to be willing to be a lot more, I think, creative and flexible in the creative process. And that is, I think, ultimately going to change things, but it's very foreign, I think very threatening to a lot of people who are invested in the previous way of doing

things. Yeah, or they embrace it. I think, like, I don't know, let's AI do the AI. I think a lot of what you're talking about is like creators and publishers that all have unique styles of storytelling and creativity that they all have

input into. And that's the ultimate artwork, IP, whatever you want to define it as. That's already happening right now. Let the AI come in and like put the like stock imagery over like headlines and text and spray it out for a couple views. But like that's never going to really

work in the long run. And if AI does take over, let it happen. I mean, like, I don't know. Like, I haven't seen any, like, banger, deep fake accounts on Twitter yet. But if you see, I'm sending my way. I love to take a look at them. There are some good ones on TikTok, you know, on TikTok. And honestly, like, sometimes brands try to cheap out,

and then they'll hire the AI spokesperson they got the ad for for, like, $500 and they'll run it on TikTok. And it's like all the comments are just roasting the brand. If you want to talk about how to not do TikTok, don't hire an AI spokesperson. All right. Well, I think that's the lesson for today. Brian, want to close this out?

Yeah, okay. Here's my dumb ending. There will never be repealed by an AI. Yeah, go for it. No, well, no, I wasn't ready for I love everybody yet. But for creators, Chris, it's the best of times. It's the worst of times. That's my dumb one.

Okay, now it's time for I love everybody. I love everyone that came on stage to talk to night. I love Chris for having this conversation with me. I love everyone for listening. Chris, who do you love? Yeah, I love everyone on Twitter too, and especially those who are not making any money. I love you very much.