The Prof G Pod with Scott Galloway - Office Hours: Web3 Unlocks, Podcast Subscriptions vs Ads, and Transitioning to a Smaller Company

Episode Date: August 17, 2022

Scott takes a question on how the experience economy can benefit from web3 innovation. He then shares his thoughts on switching his podcast to a subscription model, and weighs the pros and cons of working for large and small companies.  Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. welcome to the prof g pods office hours this is the part of the show where we answer your questions about business big tech entrepreneurship and whatever else is on your mind if you'd like to submit a question please visit officehours.profgmedia.com again that's officehours.profgmedia.com. Again, that's officehours.profgmedia.com. First question. Hey, Prof G, it's Tim Mitchell here from Johannesburg, South Africa, and I have a question about Web3 in the experience economy. It's really exciting to see our world shift towards some kind of new normal as we return to sports games, concerts, conferences, and the office, with some sources stating that up to 88% of companies are beginning to plan a return to in-person events post-pandemic.

However, one of 2022's most hyped technology trends, Web3, largely seems to be stuck behind a pane of glass, enabling virtual experiences. So I'm interested to know what opportunities you believe Web3 could offer for in-person experiences. Do you think we might see a future of NFT sports tickets to avoid ticket scalpers at the Champions League final or DAO crowdsourced concert lineups to give fans and musicians they want to see the most or even DeFi to fund projects that best serve local community needs?

Thanks, and I'm interested to hear your perspective. P.S., love the podcast and get in touch when you're ready to go on a non-virtual safari in South Africa. Tim from Johannesburg, thanks so much for the thoughtful question. So, you're late. I went on safari two years ago in South Africa, spent several days on safari. I thought Cape Town was arguably the most beautiful city I'd ever seen. South Africa is, I mean, I think we'd all live there if it wasn't so goddamn far. Anyways, congratulations on living in such an incredible place. So earlier this year, back to your question, in partnership with Ticketmaster, the NFL gave Super Bowl attendees customized NFT tickets with their unique section, row, and seat number. These tickets were commemorative rather than practical, but apparently the NFL is exploring the possibility of using NFTs for future ticketing purposes.

I would say that the greatest opportunity for Web3 disruption are probably the experiences that are generally an inconvenience, such as going through the airport or visiting the doctor. I'm a big fan of Clear. I just don't understand why the TSA should exist. It seems to me that the TSA should be a combination of smart contracts, the blockchain, and biometrics, so to speak. If our passports and boarding passes were stored on the blockchain and biometrics became the standard for security, our airport experience would be much less of a pain in the ass. And if all our medical records were on the blockchain, switching physicians or providing proof of vaccinations could be painless. In San Marino last year, COVID vaccine passports were tokenized on the blockchain and accessible via QR codes. I think it's the dumb, boring shit that moves the needle. So it strikes me that the

real opportunity for the blockchain is just to create a more secure ledger around certain information around who you are, your identity, your passport. I'm on the board of Ledger, the cold storage hardware wallet. And one of the things that we're really excited about is that at some point, your identity and your health records are going to need safe cold storage. Why on earth? I've been to the doctor a lot recently between colonoscopy and checkups and physicals to get insurance and all this shit, and also to get my asshole bleached, which I think is important in my age. Anyways, don't know where that came on. That just popped into my mind. That's who you're dealing with here at the Prof G Show. Anyway, anyway, I don't understand why every

time I walk into a fucking doctor's office, I get to fill out the same shitty paperwork on the same shitty clipboard that I've filled out literally a million times. No, I have not had a heart attack. No, I do not have epilepsy. scan my retina and say, okay, and it's served to them in an absorbable, digestible way that automatically disappears or cannot be transferred out of that office without my permission. It just blockchain that shit up. Oh my gosh. Fantastic. South Africa. Tim, thanks for the question. Next question. Hey, Scott. My name's Ben and I'm a startup founder from Fort Collins, Colorado. Thanks for your great content and honest and self-aware approach. Your book, The Algebra of Happiness, was recommended to me by a family member and I loved it so much that I've recommended it

and even bought it as a gift. My question relates to your podcast's revenue model. Have you considered becoming a subscription service or at least providing that option? Thanks a lot. Ben from Fort Collins, Colorado. Thanks. I'm in Colorado. I'm in Aspen. Thanks a lot. Ben from Fort Collins, Colorado. Thanks. I'm in Colorado.

I'm in Aspen. I love Colorado. I have this impression of Colorado being America. It strikes me as fairly purple, which I like. I like your elected leaders here, specifically your governor and your senior senator, Michael Bennett. And I think Aspen is the most wonderful place or one of the most wonderful places in the world. You used to just come here to ski. Now I come here in the summer and don't come here in the winter anymore. Come here in the summers. Anyways, let me go on and on about my privilege.

So to your question, it's sort of opportune. I had a meeting with the CEO of Vox, Jim Bancroft, who's this very thoughtful, nice, and he's probably the most generous boss I've ever had. And even though he's my boss, I actually saw him a few days ago and he said something really interesting to me. He was studying media moguls when he was at Wharton Business School because he clearly decided he wanted to be a

media mogul. And he has become a media mogul and said that they all had one thing in common, and that is they were all really good with talent and they all recognize the importance of developing those relationships. Anyways, we talked about a subscription model. They want me to launch, I'm going to launch something called Prof G Markets where we just talk to investors and academics around the markets, about the markets, unpack a specific stock,

share some personal learnings about my adventures and misadventures in the market and bring on experts and basically try and have a more thoughtful, slow moving version of CNBC instead of the eyelashes, hair dye, sleeveless dresses, and trade like Chuck, opioid-induced constipation commercials. Was that a little much? Was that a little much? Anyways, I'm really excited about this. And he suggested, let's do subscription instead of advertising. And supposedly, you can convert about 5% to 10% of your audience to subscription.

I love the idea of not having ads, although I enjoy actually host read-over ads. But I like the idea of uninterrupted storytelling. Subscription revenue is a better model than advertising revenue. It's more enduring. People are less likely to give up their subscriptions and advertisers are to stop advertising and economic downturns. And Vox becomes worth more with every incremental dollar they get from subscription as opposed to advertising. So obviously, Jim's a fan of launching property markets as a subscription. Now, a couple of my concerns. One, I think the subscription model has been overinvested. The memo is out that it creates

more shareholder value. So everyone has poured so much money into subscription-based offerings, specifically Netflix and Amazon Prime, that the bar is really high to get someone to take their credit card out and enter into what I would describe as a monogamous relationship. It's been so overinvested that I would argue in the last six months, there's been a bit of a, I don't want to call it regression of the mean, where advertisers are actually desperate to find media properties that reach attractive audiences. So if you're one of those properties, and PropG is, we get great ad rates. We get CPMs of $50 or $60, which are great ad rates because the people who listen to our program don't

spend a lot of time watching ad-supported media. So we can deliver an attractive audience to advertisers who are increasingly desperate, i.e. will pay more. So the ad model right now works pretty well for content providers because the subscription platforms have become so over-invested. Now, will that last long-term? Probably not. But my concern around moving to subscription is what happens in two and a half years when my contract with Vox ends and I want to take Prop G potentially somewhere else, or at least have the negotiating leverage when I'm negotiating my next deal with Vox, I want to be able to take those subscribers with me. And there's some question over who would own those subscribers. Whereas if I have an ad supported model, I just poured over to another platform.

So I'm thinking selfishly around my own business model. The folks at Vox have done the analysis and they say it would be about a wash in year one revenue between subscription and advertising. So in sum, whenever you find someone like me saying, well, maybe I'd rather do advertising, you got to look to, well, where are their incentives lined up? And as you would have guessed, my incentives might be that it's better for me if I stick with an ad model. Also, you've had a tough time or a tougher time moving to subscription with podcasts. I think Wondery was the one that tried to do it, and I don't know if that's worked out well. So I don't know if my stuff plays well to subscription. Maybe it does, maybe it doesn't. I think you'd have to test it. A thoughtful question and something I am thinking a lot about right now. Sorry for the long-winded answer, Ben from Fort Collins, Colorado. We have one quick break before our final question. Stay with us. What software do you use at work? The answer to that question is probably more complicated than you want it to be.

The average U.S. company deploys more than 100 apps, and ideas about the work we do can be radically changed by the tools we use to do it. So what is enterprise software anyway? What is productivity software? How will AI affect both? And how are these tools changing the way we use our computers to make stuff, communicate, and plan for the future? In this three-part special series, Decoder is surveying the IT landscape presented by AWS.

Check it out wherever you get your podcasts. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you? And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So, tune into AI Basics, How and When to Use AI. Welcome back. Question number three. all. I am recording this from Dubai, where I am on a work trip currently. I was born in Poland,

officially work in Paris, France, and I live in the UK. So unpack that. Now, my question is, I've spent 20 years working in retail and wealth banking at two of the largest banks that you can find globally. I am making a transition to work at a smaller, more niche player and very reflective over how someone can make that transition effectively from working on what I would say is an oil tanker of sorts and moving to being on more of a speedboat, smaller, slicker, faster type environment. Very, very keen to hear your thoughts and insights on how you have seen people make that change effectively and impactfully to land well. Super fan of all your

work. Love hearing your voice on a run, on a plane, in a taxi. And thank you for everything you do. Paul, that's a really nice message. Thank you. And congratulations on leading what sounds like a really interesting life. That doesn't, what you've done, Poland to Paris and the UK, that doesn't happen by accident.

Clearly you are risk aggressive and have decided you want to experience a bunch of different things. So good for you. I'm not sure if I have a ton of insight in terms of going big to small and small to big. A few off-the-cuff observations. The wonderful thing about a big company is its scale and the platform. When you call from wealth management at Goldman Sachs or JP Morgan, you usually get your call returned. That's not necessarily true at a small firm.

That's the bad news. These platforms have incredible stature. And I think a lot of times people leave these big platforms, especially in media, people, it's very easy for media personalities to think, you know, I'm the reason this thing is successful. And what they find out when they leave the Wall Street Journal or the New York Times or they no longer have carriage on MSNBC or whatever it is, that no, it was really the platform. So these platforms are really powerful. Now, here's the downside of the platforms and the upside for you. A smaller company is more nimble.

They don't have as much bullshit, as much politics, as much compliance, as much mandatory off-site training days on, you know, name your most recent issue we all need training on. It's easier to communicate up and down the food chain. You know, some decisions, when my firm, L2, was acquired by Gardner, decisions would come down. They turned off our website, I think, one weekend and ported it over to the Gardner website. And I couldn't even find out who made the decision. I spent the better part of a Saturday trying to just find out who made the decision. At a small company, you can grab the

key principles around any project, client, or decision. And the highs are higher and the lows are lower in a small company because there's no one really to blame but yourself. It's much harder to hide. At a big company, the business may be going poorly. You just take your vacation and you worry about it, but you don't worry about it too much. At a small company, the business may be going poorly. You just take your vacation and you worry about it, but you don't worry about it too much. At a small company, everybody needs to be feeling the pain and feeling the upside because if you're not doing your job or your division isn't doing well, it's going to hurt the whole small company. And a small company can go out of business. JP Morgan probably isn't going out of business for a long time. So act like an owner, spend a lot of time investing in those key relationships, and

hopefully you're able to port some of your clients from a bigger company and take advantage of how nimble you can be. That wasn't a great answer. The bottom line is I don't have a lot of insight here, Paul, from Poland, Paris, and the UK. But thank you for the kind words. That's all for this episode. Again, if you'd like to submit a question, please submit a voice recording by visiting officehours.propgmedia.com. Our producers are Caroline Chagrin and Drew Burrows.

Claire Miller is our associate producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you on Thursday. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you. Deliver that feeling to your customers every time. Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond.

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