Episode 126

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Published on:

21st Mar 2025

The Abundance Agenda

The media industry, like politics, has been stuck in a scarcity mindset—managing decline instead of building for the future. In this episode, we dig into The Abundance Agenda, the new book by Ezra Klein and Derek Thompson, and explore what a pro-growth strategy could look like for media. Plus, TheSkimm exits to Ziff Davis, the rise of AI-driven advertising, and Anonymous Banker joins to explain why second-tier comedians might be the next big media arbitrage opportunity.

Transcript
Brian:

By the way, how's Canada?

Brian:

Ha How are your relatives handling this?

Troy:

pissed, man.

Troy:

They're

Brian:

I know they really are.

Brian:

Like, this is like,

Brian:

it's kind of crazy.

Troy:

Don't poke the beaver.

Brian:

Okay,

Brian:

on that note, let's get started.

Brian:

I always forget to say welcome to people versus algorithms show about

Brian:

media, technology, culture.

Brian:

I'm coming to you with AirPods joined by Troy Young and Alex Schleifer.

Brian:

I wanted to start this week by talking a little bit about abundance.

Brian:

Have you guys, I, I got my copy.

Brian:

I haven't started reading it yet.

Brian:

It's a new book by Ezra Klein and Derek Thompson.

Brian:

The DC dork set have been waiting for this, like with bated breath, like, and it's landing at a great time.

Brian:

Right?

Brian:

Because the whole book is about how progressives in, in particular need a, a more positive agenda to put forward

Brian:

to counter obviously what they're losing right now, which is supportive people.

Brian:

One poll that came out recently had the approval rating of the Democratic Party at 27%.

Brian:

That's low.

Brian:

That's not good.

Brian:

So they're advocating for a pro-growth, progressive agenda that shifts away a little bit from redistribution and,

Brian:

and focuses on building more, more housing, more infrastructure, more energy, more innovation, et cetera.

Brian:

And.

Brian:

I think this is an interesting marketing challenge and I wanna sort of then weave

Brian:

it into the media industry, which I think needs its own abundance agenda.

Troy:

I thought I had an abundance agenda already.

Brian:

Well, I think it needs a different abundance agenda.

Brian:

There's, there's an abundance of like SEO content.

Brian:

That's true.

Brian:

But

Troy:

that Alex, were you in the 27% in support of the Democrats?

Troy:

You found that they're doing a good job?

Alex:

Yeah.

Alex:

No, I, I was, I wasn't, I don't think that I'm, I'm not surprised.

Alex:

I think everybody, even people that will 100% vote Democrat don't seem to be happy with them.

Alex:

I'm surprised that they're, I'm surprised anybody can say that they're doing a good job.

Alex:

Like whether, you know, I mean, whether it was like Schumer agreeing with Schumer or not, it was just all a mess.

Alex:

They don't look aligned on anything.

Alex:

They're not reaching out to people.

Alex:

They seem confused.

Alex:

The Gavin Newsom podcast, like they seem entirely split on, on that as a strategy as well.

Alex:

It, it, you know, meanwhile, I think the Republicans look like for whatever it's worth, are totally behind the sky.

Alex:

So it, it, you know, it looks weak.

Troy:

Hey, do you think the book I mean the timing is extraordinary.

Troy:

What a, what a what a dream for the publisher and for,

Brian:

And a great duo, you know,

Troy:

it, for those guys, but maybe it should be called The Naive Agenda.

Troy:

Yeah.

Troy:

It's like, well, these are big ideas, right?

Troy:

To, to shift, you know, our thinking to a build mindset, to outcomes, to

Troy:

making you know, this, to, to, to making government effective, right.

Troy:

Making the bureaucracy effective, but like, has it ever been effective?

Troy:

I mean, isn't like, it's great if, if the government can, can, can make more

Troy:

things for more people and make more people happy and we can do all the things.

Troy:

I mean, there's complete alignment on many levels with what I, what what Ezra would say is that the, there's, there's a

Troy:

kind of a build priority or kind of build agenda, and then there's the mo moral kind

Troy:

of decision making that informs, you know, what is the right thing to build and do.

Troy:

And that the liberals are, are better equipped to make good, good kind of moral decisions.

Troy:

But like it that it feels like.

Troy:

Ni it's just like shockingly naive to me.

Troy:

It's just like, I, I, I, I want, so we're gonna make, I mean, I guess if you look at it in a broad historical

Troy:

context, faced with urgency in, you know, fighting a war, coming out of a war,

Troy:

you know, putting a person on the moon, we've seen the government activated.

Troy:

But, and maybe, maybe there's, we just have to admit there's way too much plaque in government right now.

Troy:

And so we've, we've set kind of rule set upon rule set, which has prevented us from, from, from doing anything.

Troy:

But I, I get it well timed in all of that, but does it, does it feel just naive to you?

Brian:

I mean, I don't know if it feels naive, like I understand saying, well, it's impossible to do.

Brian:

I mean, the government has, you know, created an interstate highway system.

Brian:

It did.

Brian:

The Man on the Moon thing, it, it's done a bunch of stuff, won some wars and what and whatnot.

Troy:

No.

Troy:

Wars are good.

Troy:

Wars are good for mobilization

Brian:

Yeah, it's good marketing.

Alex:

Look at what's happening to Canada.

Brian:

yeah,

Brian:

people are coming

Alex:

Yo Europe.

Alex:

Oh, Europe.

Alex:

I mean Europe.

Alex:

Europe's never felt as United.

Brian:

to me it's more about putting, putting

Troy:

but if Donald Trump hadn't have come along and I'm not like supporting Donald Trump, I'm just saying that if he

Troy:

hadn't been this free radical disrupting the way we think about all of this, would, would this moment have arrived?

Brian:

No, I don't think so.

Brian:

I mean, because this is like, you know, usually political parties need

Brian:

to be cast out into the wilderness in order to reform themselves.

Brian:

This is just a Right.

Brian:

No.

Brian:

Otherwise they're like any bureaucracy, they're not gonna change unless forced to change.

Brian:

And so that's an interesting time and that's why this is like setting off what's kind of been a delayed

Brian:

civil war to me within the Democratic Party about what it really wants to

Troy:

dude, I think this is problematic.

Troy:

Basically what he's saying is outsourcing right to contractors, creating this gigantic, you know, outsource bureaucracy

Troy:

where government is used as flow through contracting requirements that have made it impossible to get anything done.

Troy:

And the ability to sue people has created this stasis in government.

Troy:

And what Ezra would say, the best place to listen to him, I think

Troy:

is prob Did you guys listen to, he was on Tyler Cohen's podcast.

Troy:

He's been all over the podcast world.

Troy:

Ezra has doing the rounds.

Troy:

but he's like, I love Doge.

Troy:

It's just, I think that they don't have to do it that way.

Troy:

It, you know, like, it becomes a question of how not what they're doing, the work that they're doing is important,

Troy:

essential, but like, they're making, you know, they're bad people making,

Troy:

you know, some questionable decisions, but like, that thing is needed.

Troy:

I don't know.

Troy:

I, I think it's, it, it's, it's, it only feeds into the, kind of, GOP agenda.

Alex:

You think the book does?

Troy:

I think that it's hard for people to say, well, yeah, you gotta radically

Troy:

downsize and disrupt you know, government and bureaucracies, but do it nicely.

Troy:

I, I just don't, I don't know that it's ever done nicely.

Troy:

I.

Troy:

I don't think you can.

Alex:

Yeah.

Alex:

Yeah, I know.

Alex:

But there's, there's I mean there's doing it not nicely and there's doing it with just like a, a bludgeon the

Alex:

way it does now, and with glee and with, you know, holding chainsaws.

Alex:

I think people are getting

Alex:

might get a little tired of that.

Brian:

There's the reality show aspect to it, right?

Brian:

I mean, I think that's part of the marketing, you know?

Brian:

Right.

Brian:

Like, so I think to me what was interesting is less almost the substance of it and more as a branding.

Brian:

Exercise, right?

Brian:

Like you have to brand a party.

Brian:

And like in America, you're basically, this is a product you're selling to do all of America.

Brian:

And generally this consumer market needs some kind of coherent vision right around,

Brian:

and you can't just be for a bunch of collection of niche special interest.

Brian:

Issues and you need to come up with some kind of underlying philosophy that you can then package up and sell.

Brian:

And like Trump has been really good at spectacle, he's been very good

Brian:

at very simple messaging that breaks through to low information voters.

Brian:

And, you know, we talk on this podcast all the time about the information

Brian:

space and the decentralization of media and all of the implications of that.

Brian:

And I think there's a lot of sort of similarities between what the

Brian:

institutional media world faces when, with what the Democratic party faces.

Brian:

I know there's sort of thought of, at least on the right as intertwined,

Troy:

That's a

Brian:

really they, they do need to come up with some kind of positive agenda.

Brian:

And I'm often thought struck by this.

Brian:

I wrote about it a little bit today about how so many publishers are so mired in

Brian:

cost cutting and in rationalizing their businesses that they're depressing.

Brian:

They're depressing to talk to, they're depressing to hear from, and, and it's just like, I, people say that, they're

Brian:

like, I sometimes people are like, oh, wow, you're so, I'm like, you.

Brian:

Like I'm not even negative.

Brian:

This is a thing.

Brian:

Like, this is, and it, when you don't have that sort of positive viewpoint, people don't really, aren't attracted to you.

Brian:

I mean, like

Troy:

You know what?

Troy:

Having you Brian Morrissey be a cheerleader for the publishing industry is really bizarre.

Troy:

I mean, given,

Brian:

mean cheerleader?

Troy:

I mean, how, given my history with you, I used to have this

Troy:

argument with you about being a cynical bastard all the time.

Troy:

I would march on over to the Digiday offices and

Brian:

I was just being clairvoyant.

Brian:

I was just being clairvoyant.

Troy:

But, but you know, it, it, it should no longer come a surprise to anyone that Donald Trump rolls outta

Troy:

bed in the morning and thinks of the most outrageous thing that he can

Troy:

say within the kind of boundaries of a broader platform and philosophy.

Troy:

And even this week, like I'm Canadian, obviously, I tune into some of these things, but, you know, repeatedly calling

Troy:

it, you know, you know, governor Trudeau, the 51st state, they would be better off if they just like gave it all up.

Troy:

We're protecting them anyway.

Troy:

We don't need anything from Canada.

Troy:

And just like completely doubling down on something that clearly, you know, I would say in lots of ways is

Troy:

I, I is, is not being well received other than it's an incendiary message

Troy:

that, you know, people can, that will win the media battle that day.

Troy:

It's insane.

Alex:

if, if, if you look at Ezra client's book, by the way, great beard, huh?

Alex:

Like the, whoever told whoever, like,

Troy:

He's handsome now.

Troy:

He's

Alex:

oh, he, oh yeah, he's hot.

Troy:

jacked up too.

Troy:

He is all ripped up.

Alex:

yeah, he got, he got ready for this press tour.

Alex:

Uh, I, I, I think, I mean, you read that book and it's like a good strategy,

Troy:

Wait, you read the book?

Alex:

no, but let's say, I mean, you, I'm saying you,

Alex:

but, but, but essentially, right?

Alex:

Isn't it like.

Alex:

You know, spend more on infrastructure, just like reduce, like, any

Alex:

kind of like, what is it, like regulatory stuff that slows it down.

Alex:

Infrastructure, infrastructure.

Alex:

Stop fighting between each other and let's get this done.

Alex:

I mean, that, that sounds like a great plan.

Alex:

It, it is just, I, it feels like the way people are reviewing it is that in today's world of messaging and the

Alex:

way Trump messages things and the way everything's just like, fucking trash fire every day, that's not going to reach out.

Alex:

And I don't think the, the plan doesn't seem to be read on its merits and people don't think the Democrats can

Alex:

win with it because it is not a media strategy in for today's world, right?

Alex:

should, should the, you know, V 3.0 or whatever we wanna call

Alex:

it of the Democratic Party, be something that's more of like a.

Alex:

A beast that's more capable of fighting Trump in his arena?

Alex:

Or is it or, or, or should it be about like, Hey, people are going to get tired of this shit, you know?

Alex:

And, and, you know, maybe just like a reasonable plan is what we'll want in three years.

Brian:

I think the case for that is that, you know, I think Tesla is down on like 30%, like, on the year.

Alex:

I track it every day in the morning.

Alex:

I, I watch it when I

Brian:

you wake, that's what you first do.

Brian:

You

Alex:

That's

Alex:

my, I, I, it's wonderful.

Brian:

obviously

Troy:

you're gonna be attracting the lucid stock,

Brian:

this

Brian:

is very tied to

Troy:

a, it's a, penny stock.

Brian:

Elon Musk's role in Doge.

Brian:

And, and the fact that the spectacle, right?

Brian:

Like there's only, there's only there's only so much I think people can take with, with the spectacle of this.

Brian:

I, I suspect as always that they're overplaying their hand here.

Brian:

I don't know.

Brian:

Time will tell, I

Troy:

Listen, if someone told me that you could align a more reasonable moral agenda, a more

Troy:

reasonable liberal agenda with a high functioning government, I'm all in.

Troy:

I'm in.

Troy:

You got me.

Troy:

I'll, I'll, I'll walk with Alex to the, to the voting booth.

Troy:

but in the

Alex:

can't, I can't vote.

Alex:

So, you know.

Alex:

We'll, I'll just watch you do it.

Troy:

okay, you can drive me in.

Troy:

You're lucid.

Troy:

but in the meantime, I, I just, I, I, I can't see it, but good on 'em.

Troy:

I mean, they're desperate.

Alex:

But what is it?

Alex:

What, what, what, what is it that they do?

Alex:

I mean, I, I think for me,

Troy:

is it that they do?

Troy:

Is, is a, is a really good question.

Alex:

I, I mean, you know, the, the, the only thing, the only kind of messaging that I've seen breakthrough

Alex:

is like, you know, cyber trucks and fires and, and free Luigi.

Alex:

You know, it's like the,

Alex:

the rebellion.

Alex:

The rebellion seems to be

Troy:

you know where it's gotta go, Alex.

Troy:

And, and, and I think this is just inevitable and it has to go to a pro technology message.

Troy:

It invariably you know, AI is going to massively change how services are delivered through the bureaucracy and

Troy:

the party that is best able to convince voters that that's in their interest, then

Troy:

they can actually affect that is gonna have an advantage, but it has to come.

Troy:

AI is the substrate on on, on which the new

Alex:

but people don't see that as a win.

Alex:

Like people

Troy:

I mean it's early on that message, I miss saying it will go there.

Troy:

Part of the conversation between Tyler Cohen and Ezra Klein was that like.

Troy:

Tyler was just saying like, you gotta admit that, you know, you're, if you, if you were to fund something like the new

Troy:

USAID or whatever government department you wanna talk about, you're gonna be able to do it with a couple hundred people.

Troy:

And they kept saying a GI.

Troy:

It's interesting to me that a GI has become part of the lexicon as being not speculative, but real.

Alex:

But it is, it is, to be clear, it is entirely speculative.

Alex:

We don't know if we're

Troy:

Right.

Troy:

But I'm, I'm just saying that, that the Tyler throws it around.

Troy:

Like it's not if that's, it's just when,

Alex:

Yeah.

Alex:

That, that, that, that type of talk is crazy though.

Alex:

It's, it's absolutely crazy.

Alex:

The, the jump from a GI from what we have today to a GI It is, it is so massive and I, I know that I'm like the

Alex:

a usually the, the, the AI pusher here, but that, that type of language is really not useful Because we have yet to see

Alex:

like large scale you know, use of, of the current generative AI models in ways

Alex:

that are reliable enough to get anything done that's, that's particularly useful.

Alex:

And so I don't, I don't know if that's a great messaging.

Alex:

I think, I think we see it when we see it.

Alex:

I think if anything, this type of talk, it needs to kind of be underplayed and, and maybe brought into a

Alex:

conversation about the modernization of document of, of government for efficiency using technology.

Alex:

I wouldn't use AI at all.

Troy:

That's what I'm saying.

Troy:

I, yeah, practical.

Troy:

You're right.

Troy:

But thank you for clarifying.

Troy:

Okay.

Troy:

' Wow.

Troy:

That's about as political as I'd like to get Brian, you know,

Brian:

but like, no, I want to tie that because like, I think that the, the sort of counter to that is the look backwards.

Brian:

And I see a lot of that in the media industry.

Brian:

A lot of nostalgia.

Brian:

And I like, I like some of nostalgia.

Brian:

I did not get to enjoy the 19, 1990s magazine industry.

Brian:

But there's a lot of

Alex:

That, that's, oh, that's the chip.

Alex:

That's where, that's where the chip on the shoulder comes from.

Alex:

You see, Troy did, that's why he has, that's

Brian:

Troy, I, I don't know, do gray, I, what was Montreal Magazine?

Brian:

I don't know if there was that much.

Brian:

There was no

Troy:

Oh, nineties magazines.

Troy:

I, no, I, I got there to refactor them.

Troy:

Alex, I made a lot of money in the magazine business, but I, I was there to break it, not, not to fit, not to

Alex:

You were the original, like you were the Dojo print media.

Alex:

Um,

Brian:

much.

Alex:

but,

Brian:

But Grayden Carter has a new book out about the, the, the sort of heyday of magazines.

Brian:

Michael Greenbaum New York Times Media editor, I believe is he has a Conde Nast history coming out.

Brian:

I, Troy, I think you shared that guy's tweet about making $500,000 for three, for three magazine story

Troy:

And this was in, this was in the nineties.

Troy:

That's a lot more than $500,000 today.

Brian:

wrote today, I was like, I, I'm every single freelance.

Brian:

Magazine writer today probably read that with the same face that

Brian:

the Rick character had during that monologue on White Lotus as stupefied.

Brian:

Because that's the, that's the alternative, right?

Brian:

And, and that's why there needs to be some kind of positive and dynamic agenda, not just managing decline.

Brian:

But Troy, what, so you, you wrote in the, in the PVA newsletter, and we talked about it a little bit

Brian:

last week about, about this idea of franchise value and and how most, not most, I'd say a lot of particularly

Brian:

publishing brands are sort of moving more towards the right, they're moving into survivor category or arbitrage.

Brian:

And that's just, it's not, that's, that's the point I'm trying to get at is like, that's not very inspiring.

Brian:

You know, you're not going to track the best people to an industry that's managing decline.

Brian:

At the end of the day, I know media always attracts it, but I like that to me is, is like a fundamental challenge

Brian:

is how you get out of triage mode and start to paint some kind of picture of

Brian:

growth at the end of the day and not just financializing these assets in quotes.

Troy:

Right.

Troy:

What's your question?

Brian:

Well, how do you do that?

Troy:

Uh,

Troy:

what, What, a great question.

Troy:

Good question.

Troy:

Brian.

Troy:

Um.

Brian:

That was always when

Troy:

Well, I find it just for a moment.

Troy:

Can we pause on this?

Troy:

Like that you're making a couple hundred grand a story and that the,

Troy:

the, the, the Vanity Fair as a whole was, was nicely profitable at the time.

Troy:

And, and that in order to get there, in, in, and, and by the way, paying

Troy:

lots of people, including like, I mean, just amazing cost structure.

Troy:

You know, Annie Leitz shoots crazy, crazy, you know, expense lines, all that.

Troy:

And you have the premium, the perception of premium and the massive benefit of, of complete access.

Troy:

The best writers, the best photographers, such that your, your ad rates, are so high and advertisers are willing to pay a

Troy:

premium that you can still run a run a, a profitable business, one that's leveraged.

Troy:

Magazines were beautifully leveraged because you made one

Troy:

thing and sold it over and over and over and over again, right?

Troy:

Like it was a really nice, that's why media when it works is so beautiful because it's, it's a

Alex:

And that's why, and that's why software is even better.

Troy:

Yeah, it, well, it's the same idea, right?

Troy:

And it's all about mar marginal, marginal revenue and marginal profit, not unit costs.

Troy:

So, yeah, no, I, I long for those days and I, and I, I, I sort of, came

Troy:

into the business with the attitudes and cost structures of those days.

Troy:

So, you know, I, we had, I think in the US 22 or 24 after the Rodale acquisition, something like that.

Troy:

You know, magazine brands and, you know, more than a dozen publishers

Troy:

and, you know, 20 plus editors, all that made really good money.

Troy:

And you know, facing a market where I would say that the talent was way more highly leveraged in digital media.

Troy:

That even the senior people in digital me, media companies that, that magazine

Troy:

people looked down their nose at, made you know, far, far less money.

Troy:

And now we're, we're completely on the other side of that where, you know, the, the businesses just aren't

Troy:

sustainable anymore and are really being harvested for, you know, what is really great IP value in many cases

Troy:

where these, you know, brands have built up, you know, that, that kind of brand equity over years and years and years.

Troy:

So, I don't know, I don't know where you see this kind of leverage.

Troy:

I think Brian, in something like a podcast like, you know, your friend,

Troy:

kara Swisher you know, came out and said she's making $20 million a year.

Troy:

You know, we know that the p and l is, you know, decent over at Vox Media on their, you know,

Alex:

How are they making $20 million a year?

Troy:

How is she, you know, I, I, I don't know what that particular podcast makes.

Troy:

I know it's really popular and I don't know what else she does to make money

Troy:

you know, speaking gigs and, you know, she has a couple podcasts, all that.

Troy:

My point is, is that something that has the cost structure of Pivot makes a lot of money because it's 10 people,

Troy:

you know, and so, so you do see that media leverage in, in those kinds of business.

Troy:

You see it with creators.

Troy:

You just don't see, you know, it at an industrial scale.

Brian:

Yeah.

Brian:

I think what I, I was listening to Sarah person at the PCEO and she was talking about revenue per head.

Brian:

Like I think that is like an interesting metric for a lot of these businesses

Brian:

and how you get that to fine, you're not gonna get it to Nvidia levels, but.

Brian:

You know, e during the last year, it's like, it would be like

Brian:

$200,000, you know, revenue per employee at some of these companies.

Brian:

And when you look at,

Brian:

you know,

Alex:

to be clear, that's very, that's very low.

Brian:

Yeah.

Brian:

Punch bowl is like a million.

Brian:

Right.

Brian:

And that's sort of where I think a lot of these businesses go, where the numbers of

Troy:

Until they get judged.

Troy:

But yeah,

Brian:

well that's what I mean, like, I mean, you, you have to get that

Brian:

efficient in these, and you can, in some of these businesses, they're just

Troy:

my point is, is that they tap the rich veins of government to drive

Troy:

high subscription prices, which is why they have a million dollars per head.

Brian:

you think that the punch bowl, well maybe, I mean, I don't know

Troy:

Yeah, I think they probably run a good business hats off

Troy:

to them, but I think they have a nice subscription business

Brian:

there's leverage in a lot of these different like businesses.

Brian:

I did, I have a podcast coming out with the dude.

Brian:

Perfect.

Brian:

CEO

Troy:

making, you have leverage in your business.

Brian:

I mean, per employee, it's, it's a very, it's very high.

Troy:

It starts to smell

Troy:

A little like a million dollars probably.

Brian:

there's, there's, there's a lot of, I gotta smear myself in many

Brian:

directions, however but no, but I, I, I did it with like the, do you know dude?

Brian:

Perfect.

Alex:

yeah.

Brian:

The, they, you know, trick shots.

Brian:

They started Texas a and m students, I guess in 2009, they uploaded some, you know, video

Alex:

Yeah.

Alex:

Try try to bounce a ping pong ball into a red cup

Brian:

So, early early mover advantage.

Brian:

I mean, they had like 73% margins.

Brian:

Like

Troy:

Well, sure.

Alex:

ping pong balls are cheap.

Brian:

Yeah.

Brian:

So it's not like media is a terrible business, but then you look at like, some of these old sectors,

Brian:

you know, the New York Times now represents 7% of all US newspaper jobs, like just the New York Times

Alex:

And it's interesting how much of, how much of that, if, if

Alex:

you took out like games and stuff like that on top of it, right?

Alex:

Like it would probably be higher.

Brian:

You know, and even, but I mean, some of, and particularly really strong, like some something

Brian:

like The Economist that's not that big of a company really, you

Troy:

300 people.

Troy:

300 in the newsroom.

Brian:

yeah.

Brian:

I mean, to to cover the whole world with that, that's pretty effective.

Brian:

I thought.

Brian:

I was like, that's pretty impressive

Brian:

considering the

Alex:

is the Economist a good business?

Troy:

It's a profitable business.

Troy:

It's probably 10%.

Troy:

Alex?

Alex:

Okay.

Troy:

mean, it's, it's, it's a, it's a one of one.

Troy:

It's, it's definitely back to Brian's original, original question, it definitely has on the continuum from

Troy:

franchise value in the middle survivor on the far right, arbitra ar arbitrage.

Troy:

It's a franchise business.

Troy:

It's a business that can't, that has, I think pricing power, market power, emote a global brand prestige

Troy:

and through all of that just has a kind of associated economic benefits.

Troy:

You know, I I, I think that they, they have a rare luxury of being able to employ 300 people's, a big newsroom these days,

Troy:

it is among the handful of media businesses that still have franchise value.

Brian:

And then, I don't know if you saw this week, but the skim.

Brian:

It got traded.

Brian:

Now, this would've been big, this would've been big news about like 10 years ago, or less than 10 years ago.

Brian:

But it was just kind of like a footnote.

Brian:

Ziff Davis acquired it, which is firmly, I believe we can say, on the right side of, of your continuum.

Brian:

Correct.

Brian:

Troy?

Brian:

Am I, am I being

Troy:

I mean, we, we would put them between Survivor and arbitrage.

Troy:

Yeah.

Troy:

But

Brian:

okay.

Brian:

That's,

Troy:

them in the bucket of Vivec is kind of a genius

Brian:

Yeah.

Brian:

No disrespect

Brian:

to the

Troy:

that business, I think enviable from a profit perspective,

Troy:

if they're stock prices lagging, the market doesn't like it.

Troy:

It's a really complicated business.

Troy:

It has a lot of weird platform dependent shit in there.

Troy:

But he's like, you know, the garbage man of the industry.

Troy:

That's unfair.

Troy:

He's the

Troy:

uh,

Brian:

Uh Oh.

Brian:

You know what they say in Washington, a gaff is when you tell the truth.

Troy:

No

Troy:

he is like the Fred, you know, he, he's of the Fred Sanford of media.

Brian:

It keeps getting better.

Brian:

We should have it back on.

Brian:

No.

Brian:

Look, a lot of brands have, have, have gone that have maybe I would say lost their luster a bit.

Brian:

You know, Mashable, quartz, et cetera.

Brian:

You know, it's part of the life cycle.

Brian:

Um, Cnet went over to

Troy:

PC Meg is what started it.

Troy:

Yeah,

Brian:

yeah, they operate these businesses really well.

Brian:

And but yeah, I mean, that to me is like, it's gonna end up becoming the skim is another sort of cautionary tale.

Brian:

Do you know the skim

Alex:

Well, I was gonna to say, I'm, I'm, I'm embarrassed to like, not know the skin.

Alex:

What is the

Brian:

No, that's okay.

Brian:

It

Brian:

was,

Troy:

they're, they're really tight, you know, kind of sultry pants made by Kim Kardashian.

Troy:

Exercise, wear athleisure.

Alex:

I'm wearing some now.

Brian:

No, it is a, it is, it was one of the original sort of email companies, it was an email newsletter

Brian:

for young women that would summarize the news in a very relatable way

Troy:

It inherited the legacy of Daily Candy.

Brian:

if Daily Candy was the original that would've been like a talk about a business that

Alex:

So it was a, it was a, it

Brian:

at a

Brian:

different time.

Troy:

it was one of the original newsletters built a big list.

Troy:

They monetized, they kept going, and then

Alex:

but like

Brian:

They raised $30 million.

Brian:

30 million for a newsletter.

Brian:

That was

Alex:

I mean, I mean, you know what, but honestly, if I heard that today, I wouldn't be surprised because we're

Alex:

hearing of some newsletters like Lenny's and stuff like that, reaching, you know, a million subscribers.

Alex:

I mean, I wouldn't be surprised if, if you told me today one of these

Alex:

Substack newsletter raised 30 million, I wouldn't be surprised, you know?

Alex:

Kara Swish, Kara Swisher is making 20.

Alex:

And I know most of that is, is podcasts are much more viable than newsletters.

Alex:

But how doesn't like selling to, so explain it to me because I, I, I hope there are people in the audience that

Alex:

are as up to speed as me about this, but isn't selling to Z Davis kind of like, you know, going to a farm upstate,

Troy:

I, sorry.

Alex:

like, I don't know.

Alex:

You know, when you tell kids the dog went, went to a farm upstate, like isn't it like

Alex:

you, you kind of, it sounds nice, but it really isn't.

Brian:

it, it's def it's definitely on, on SEO Glue factory highway.

Alex:

maybe it's not, he's not a trash

Alex:

car.

Alex:

maybe he's just com composting.

Alex:

You know, it's a, it's a recycling factory, but, so, so, but it doesn't sound like a great exit.

Alex:

Right.

Brian:

Look, they have a playbook.

Brian:

They have a, right.

Brian:

I mean, is that fair?

Brian:

You know the business better than I do.

Brian:

Troy, they have a playbook, then they're gonna run the playbook.

Troy:

they're gonna do what they do, which is central infrastructure, very business-minded GMs.

Troy:

Manage the business extremely, you know, tightly.

Troy:

And, you know, I, I, I think that these days you're better to be on the side of, you know, buying stuff cheap than

Troy:

buying stuff expensively and hoping that you're gonna maintain or create premium value or franchise value.

Troy:

So it's smart.

Troy:

It's, you know what, it's, what is it?

Troy:

It's a 3 million email addresses and decent readership.

Troy:

Why not?

Alex:

Oh.

Alex:

They raised 30 million on 3 million email addresses.

Troy:

No, they

Troy:

raised

Brian:

no, they've been shrinking.

Brian:

So I mean, you know, this

Troy:

Used to be five,

Troy:

I think.

Troy:

anyway, it's not that it's, I hate to be a dick here, but it's not that interesting.

Brian:

that says it all,

Troy:

we should, we should, we should just fucking move on,

Alex:

Yeah, I think we're all

Brian:

all right, let's move on.

Brian:

that's that's fine.

Brian:

That's fine.

Brian:

This was something that was brought up by by ab he talked about this acquisition that, that just happened.

Brian:

But to me, what was interesting is this idea of, you know, we're really past the era of, of keyword targeting.

Brian:

I mean, keywords were like.

Brian:

Sort of, they built the search advertising ecosystem.

Brian:

It's the one sort of home run of digital advertising really.

Brian:

And now we're moving to a world where you just described your

Brian:

perfect customer and then, you know, it's, it's the outcomes era.

Brian:

And, and that's, and that is the, you know, describe your

Brian:

perfect customer and then let the machine go find that customer.

Brian:

I, I think that's gonna be, I mean, I don't, I, I wanna have a positive agenda for publishers, but like,

Brian:

that's, that's a very attractive proposition for just about any for just about any marketer, I would think.

Brian:

And that's gonna have major impacts, you know, as that happens throughout the entire media ecosystem.

Brian:

Your thoughts, Troy?

Troy:

Sorry, I was texting ab, what was the question?

Brian:

Basically about like, you know.

Brian:

Moving beyond keyword, keyword targeting and, and moving into just describing your perfect customer and

Brian:

then letting the machines do, do, do the work and how that's gonna have a massive impact on the entire ecosystem.

Brian:

I mean, this is sort of where we've been going with P

Troy:

um,

Troy:

yeah, I, I think that, that it will happen.

Troy:

But marketing as, you know, like everything that's scarce in the world is a zero sum game.

Troy:

So e eventually, if that's an effective acquisition method, it just gets priced into your cost of goods sold and prices

Troy:

go up and it benefits the people that own the algorithm and the distribution.

Troy:

And, you know, then people get forced out because their roas or their return on ad spend gets to a place where

Troy:

it's not economically sensible to, to keep spending more on a customer.

Troy:

But we're already there.

Troy:

We're already there with like automating acquisition in, in

Troy:

effect, turning marketing into distribution as, as a, as a COGS item.

Troy:

So I, and I don't, I don't really think that changes anything.

Troy:

You know, what's it called?

Troy:

It's Google Max or whatever, or, or, you know,

Troy:

meta, meta has their own version of it.

Troy:

And to me that's at the scale level, that's gonna be a cost of entry.

Troy:

And you're gonna see people, like, I know that Neil was, is really encouraged by his, what is this thing

Brian:

Decipher now.

Brian:

Decipher Plus, that is, that was actually very interesting and that I just

Troy:

Well, is it in, is it interesting?

Troy:

I mean, it, it, it, it is interesting in that good for Neil.

Troy:

He's realized it, it, you know what it is?

Troy:

Well, I will describe it.

Troy:

It's, it's an ad network owned by a publisher that attempts to use non

Troy:

cookie data and give you something that rivals or builds on contextual ad

Troy:

placement

Brian:

it's intent data.

Brian:

Neil would, Neil would, would brand it intent data,

Troy:

Great.

Troy:

So where it starts is publishers like Neil have a lot of clicks on Buy Now buttons

Troy:

and, and pages in his portfolio that show where consumer's interested in a product.

Troy:

Right?

Troy:

Alex, you land on a page that says Best Air Fryers, you know, for someone in Northern California or

Troy:

whatever.

Troy:

And so you know, that is a light signal or a strong signal depending on how

Troy:

far down the funnel you go to say that you're interested in air funnels.

Troy:

You start to, or air funnels, air funnels, air fryers, and then you put that into your DMP and you start building a profile

Troy:

around the consumer that says that they're interested in X, Y, and Z. And

Troy:

you do that over enough pages and you can get a good, good profile of someone.

Troy:

That's what he's building.

Troy:

And now, like everybody in a publishing business of that scale would wanna do is

Troy:

say, it's not only useful to us, we can target customers on your pages as well.

Troy:

Right, so you can become part of our ad network.

Troy:

Not dissimilar by the way, to what Vox does with their ad network, which is called it's called

Brian:

I need to be able to

Troy:

So it's logical that he's doing this because back to the franchise value to arbitrage, you know, big picture

Troy:

is, you know, Tash Meredith isn't gonna sit pretty on that continuum, right?

Troy:

All recipes.

Brian:

I, I mean, I will say this, I've been very impressed that by, you know, because they're publicly

Brian:

traded, you know, they report their grids and they have defied a lot of these headwinds in many ways.

Brian:

Now they sort of divide out their core properties from, I mean, God forbid if you work on one of the

Brian:

non-core properties and they're just telling the world like that, you know,

Troy:

he's good.

Troy:

He's good.

Troy:

He is smart.

Troy:

He's good leader.

Troy:

You know, there's good assets in there, but big pictures, there's lots of pressure on the business.

Troy:

You wanna have him back on?

Brian:

So you're not that bullish on Decipher Plus.

Brian:

I just think it's good that a publisher's even coming out with stuff

Brian:

like this, I mean, my bar is fairly low at this point because like all,

Troy:

I

Brian:

mean, I joke with Mark Stenberg all the time about, I'm like, my God.

Brian:

Like another layoff story.

Brian:

Like

Troy:

I love it.

Troy:

Brian, I love your optimism.

Troy:

I'm very optimistic.

Brian:

in Miami for the LA for two days.

Troy:

No, it's just the turnaround is astounding.

Troy:

It's astounding.

Troy:

'cause I would've walk, walked into your office talking about decipher and you would've crapped all over me.

Troy:

But you would, you would've said something like, but isn't it just an ad network, isn't it?

Brian:

It's a managed service provider.

Brian:

That's what you would tell me

Brian:

And I would say, right, an ad network.

Brian:

On Happier Note, did you see that one in four programming Jo Jobs has, has, has vanished.

Brian:

Apparently that's the new, that's the new metric.

Brian:

Is this gonna be like the sort of metric for all of the, for,

Brian:

for so many of these different fields, like one in four go away?

Alex:

I mean, programming is pretty

Brian:

happens.

Alex:

only

Alex:

job that can be pretty efficiently replaced in parts

Alex:

by AI today.

Alex:

You know, I'm, I'm not a believer that like maybe as many jobs will be replaced by as, as are being touted now.

Alex:

Like, programming is so specific when you think about it.

Alex:

It's really like people who talk to machines and we've invented this new language that supports that tasks really,

Alex:

really well because, you know, programming is, is a contained number of, of things

Alex:

that you just put together and you can run it in a computer and see how it works.

Alex:

So yeah, I mean, I see it, I see it, I see it coming from for, for programming or engineering pretty rapidly.

Alex:

I think there will be all sorts of job built around computers.

Alex:

You know, it used to be like the job used to be to be able to like, think through math problems and put them

Alex:

into punch cards and then, you know, people invented languages that became closer and closer to human language.

Alex:

And now it's just, it's human language.

Alex:

But you still need a very technical mindset and, and to, to make anything worth of value.

Alex:

It's just you need less people,

Troy:

It is just that, you know, when your mom would say, oh, what does your son do?

Troy:

And your mom would say, my son works in computers.

Troy:

You can't, you can't say that anymore.

Troy:

' cause everybody works in computers now.

Troy:

We're all just computers.

Brian:

Yeah, I had an Uber driver the other, the other week who was,

Brian:

he was a student, and my wife was like, oh, what are you studying?

Brian:

And he was like, he said, oh, programming.

Brian:

And I was like, oh, well then you'll have like lots of job opportunities.

Brian:

And I was like, gonna speak up.

Brian:

And I was like, no, I'm not gonna do it.

Troy:

Yeah, I mean, I, I, I guess the answer that, that you're looking for is we're all gonna be more technol,

Troy:

technologically leveraged, I would say, Alex, and yeah, you can't, you can't build a system just by like typing an engli,

Troy:

like an English language request into an LLM and getting some software back.

Troy:

You can't, you still have to understand interconnectivity between different components.

Troy:

You have to understand system design.

Troy:

You have to understand databases.

Troy:

You have to understand relationships between you know, different parts of the system.

Troy:

Like these.

Troy:

Jo, this isn't going away tomorrow.

Troy:

This

Alex:

The jobs are the jobs that I think, I think, I think working in

Alex:

computers, like our moms used to say you know, those jobs are changing though.

Alex:

I think there was a massive jobs, which was pretty low level engineering at the top line, right?

Alex:

So a lot of people building interface stuff, front end stuff,

Alex:

stuff that is pretty basic, but was being rebuilt over and over.

Alex:

I think some of these jobs are going away.

Alex:

But I think with the demand scaling up there's still, you know, there's still people like putting those servers

Alex:

together and configuring everything and making all that stuff happen and

Troy:

take five people to make a website.

Troy:

Alex,

Alex:

yeah.

Alex:

Yeah.

Alex:

No, and, and, so I think the demand's just gonna become higher, but it's just that we're becoming.

Alex:

It, you, a few decades ago, you needed to be somebody who knew how to use a computer to use a computer, right?

Alex:

Like, today, we all have a phone in our pocket.

Alex:

That's fine.

Alex:

And then it's, I think it's a pretty natural progression.

Alex:

what I don't like is that people conflate that with replacement of jobs across many other industries.

Alex:

I think, I think there is definitely some risk in the creative arts.

Alex:

And it's very strange because like bo, like the way generative AI

Alex:

works it, it can create art which is very non-deterministic, right?

Alex:

Very yeah.

Alex:

And then it can, it can also replace people code, which is very deterministic because it's, it's easy to test code.

Alex:

But then everything in between, all the other jobs.

Alex:

I think it's, it's, it's a lot, it's a lot harder to see just a direct path of like,

Brian:

Okay, so you're saying this is not like.

Brian:

This is not like a harbinger of things that come to other professions,

Brian:

but this is, it's fairly unique to programming because it's so

Alex:

I, I think it's very subtle.

Alex:

I think we have, I think there are a few minor technology miracles that need to happen to even, you know, I, I, the way I

Alex:

see a GI is like speed of light, you know, like we can get close to it potentially, but, but I don't think we can, we can

Alex:

you know, I don't think it's certain right now that we can ever reach it.

Alex:

And the systems will become smarter.

Alex:

The systems will become more specialized but it is not a, a direct line and it won't impact everything.

Alex:

Similarly, meanwhile, like we're still not seeing enough happening around making these systems more reliable.

Alex:

And I think unless they become very, very reliable, a lot of stuff that,

Alex:

people talk about is kind of, is, is is a flight, you know, it's like, is vaporware.

Alex:

The, the challenges right now, and what I find very frustrating is that all the AI companies to, to keep their kind of their

Alex:

value up and to raise the insane amount of monies that they need to burn to compete

Alex:

including open ai, have to be parabolic in the way they talk about stuff.

Alex:

Because you can't raise, you know, if you open ai, you can't raise $40 million that you're just essentially

Alex:

going to put in an incinerator if it's just going to be like, yeah.

Alex:

And it'll, you know, it'll generate emojis faster or it'll be able to write a book better because there's no money in that.

Alex:

So they have to talk about kind of these incredible age agentic

Alex:

systems that will do all these tasks for you and stuff like that.

Alex:

And, and we're not we're nowhere near, like, we're nowhere near in that, in that area.

Alex:

So I. You know, I, I'm not saying it won't happen.

Alex:

I think, I think there just needs to be a little bit more of an intelligent conversation around it.

Alex:

And engineering programming is, is is exceptionally kind of geared towards

Alex:

being able to be replaced by AI or, or fundamentally changed by ai.

Alex:

but maybe just that changes a lot of stuff because it means, you

Alex:

know, software keeps eating the world, but at a much faster pace.

Alex:

And other jobs get replaced by stuff that isn't ai but was facilitated because all of a sudden, you know, a bunch of

Alex:

people starting creating a bunch more software and that software replaces jobs.

Alex:

You know, if I'm making any sense here, I think the conversation needs to be a little bit more nuanced than it is today.

Alex:

Does it make

Brian:

You know what I've been using AI for lately.

Brian:

I, I started a

Brian:

project for, yeah, companionship.

Brian:

But actually it's partially that because I started a project with.

Brian:

I think I've mentioned it here, like I write this, this, I've been writing this

Brian:

journal for the last two and a half years where I just write every day about like

Brian:

business, what's on my mind and stuff, and it was just useless data.

Brian:

Little did I know, I upload all of it to a project with like my p and ls from the last few years and it's

Brian:

like this financial analyst that is this business analyst that I'm, it, it gave me all kinds of different things.

Brian:

I mean, I think the problem is, it's like, what I realize with this when I ask it to like analyze things is

Brian:

it's spitting back at me, just my view of the bi, like I'm not getting

Brian:

a different view, but it's sort of packaged as if it's like a consultant.

Brian:

Who knows, you know, like in consulting deals, it's like, well, just tell me what the result you want

Brian:

because like, that's why I'm here to, you can use it like internally.

Alex:

Yeah.

Alex:

to

Alex:

to

Brian:

basically.

Brian:

Yeah, yeah, yeah.

Brian:

It does.

Brian:

It validates your own, like my own thoughts.

Brian:

I don't, it's not very, it's not unbiased.

Brian:

But it is, I, I, I find it useful for sure.

Troy:

I had two items that I wanted to bring up and one was really an extension of what you guys are talking about.

Troy:

By the way, Alex, one thing to watch out for on the LLM progress side, or I think there's a lot of conversation

Troy:

this week around model context protocol, MCP, which there's a client and a server, and essentially standardizes

Troy:

like HTTP connections between LLMs and databases and other services, which

Troy:

makes it easier to plug in different LLMs to an end up like a service stack.

Troy:

And we'll, we'll kind of start to facilitate more.

Troy:

Practical agent behavior from, from, from LLMs in, in a way that I think is, is a, and, and, and all it is is, I'm not

Troy:

trying to sort of nerd out here other than just saying that like the layers are gonna slowly emerge where basically

Troy:

LLMs and related reasoning technologies has become the kind of baseline technology that everything's based built

Alex:

yeah.

Alex:

But I, I, I agree and I think we we're gonna see a lot of rapid growth.

Alex:

All, all, all I'm saying is like.

Alex:

The, the, these types of technology can, I don't know, but can and often show the fact that like, you make

Alex:

a ton of progress in the beginning, you know, as humans we got faster and

Alex:

we started riding horses and we made faster cars and then we built rockets.

Alex:

And if you, if you, if you looked at that trajectory, we would

Alex:

say, well, in a hundred years we'll be going faster than light.

Alex:

That doesn't happen.

Troy:

Well, I think the lighting, the, the, the approaching light, which is sort of insight abstraction, reasoning,

Troy:

asking right questions, not being prompted, those kinds of human-like

Troy:

connections that are born of us being, you know, long standing sensory creatures.

Troy:

Right?

Troy:

Like that is not coming immediately.

Troy:

I totally agree with you.

Troy:

I think it's a great example.

Troy:

I think it's a, or analogy rather.

Troy:

So I had two items, Brian, and one was a, a, a sort of just slight reflection on the newsletter and the other one was trying,

Troy:

I, Alex sort of shows up in my dreams sometimes and it, it was really trying to envision, I think it's really interesting.

Troy:

Let's start here.

Troy:

It's really interesting right now to try to envision what the new normal is or the new model or the new system that replaces.

Troy:

What we know as of, of the system of the open web.

Troy:

Okay.

Troy:

Which is, you know, Google is center, you know, referrals via links, web pages, affiliate revenue banners,

Troy:

YouTube, you know, the pressure of social media, challenging kind of, you know, old, old legacy media conventions.

Troy:

All of those things are what we understand to be the web happening for a long time.

Troy:

Right?

Troy:

And now we've got this new thing and where knowledge is abstracted in real time from, you know, all of human

Troy:

knowledge where everything starting with, you know, evergreen content

Troy:

and service content can be sort of infinitely personalized for you.

Troy:

And it's super cool and everybody I talk to from like.

Troy:

You know, the people in my circle, my wife, my wife's friends, stuff like are shifting quicker than

Troy:

I would've thought to using, you know, chat GPT as as an effective or related tools as effective tools.

Troy:

And so like what it's, it's interesting for me to think about what that new model looks like and how it sustains itself.

Troy:

And I think we get really caught up in the fact that, well, we'll have the snake eating its tail problem where, you

Troy:

know, there will be no content 'cause there's no banners to run on webpages

Troy:

and people can't, aren't incented to make content and get traffic from Google.

Troy:

And, and I actually don't think, I think that there is a new ecosystem

Troy:

and it won't, and, and we will find ways obviously to, to make it pay.

Troy:

and, and that, that like slowly, kind of like Alex's analogy.

Troy:

First we're gonna see the quick, you know, slurping of the most fundamental tier of knowledge.

Troy:

And then we're gonna move into news and more real time stuff.

Troy:

And there'll be new pressures on, you know, whose content is that?

Troy:

How am I getting paid in all of that.

Troy:

And other stuff will become more conversational, as you've pointed out, Brian.

Troy:

So we're gonna see more media move to, you know, audio, video.

Troy:

And yeah, there'll still be newsletters and there'll still be the odd

Troy:

website and people will still like to read humans and all of that.

Troy:

But the shape of the web, I, I'm really interested in, in how we start to think about the new shape.

Troy:

Does that make sense?

Troy:

Like what it actually, what is the new normal that we all sort of see as this ecosystem that's replaced the open web?

Troy:

And while we can, you know, and it's top of mind right now because.

Troy:

Like open AI is going out, the government's doing this, this,

Troy:

this, this process led by, what's his dingle from all in

Troy:

David

Troy:

Sachs.

Brian:

Jason isn't in

Troy:

they're asking for comments around the new AI

Alex:

Yeah.

Alex:

Jason's the dingle

Troy:

Right?

Troy:

Okay.

Troy:

So, so they're asking for comments.

Troy:

What OpenAI is saying is you can't restrict us from sucking up knowledge

Troy:

that should be considered, you know, open and available to us.

Troy:

Right?

Troy:

And what Meta is saying is you gotta encourage the growth of open of, of open source models.

Troy:

And what Anthropic is saying is, oh, please make sure that we're safe.

Troy:

Create a mechanism so government can review and shut down, you know, models

Troy:

that become too powerful and everybody's sort of talking in their book, right?

Troy:

and, and oh yeah, Google's saying, don't sue us if someone uses our model to make a bomb.

Troy:

Like that's their line.

Troy:

So all of these are things are coming from the big lobbying efforts of these big, you know, organizations.

Troy:

And we're, we're, we're just in the middle of working through kind of what this new world's gonna look like and who gets what,

Troy:

like who becomes the subsistence farmer and who's gonna have all the power much

Troy:

like we, you know, have today, and what the rest of the ecosystem looks like.

Troy:

And I think that, like, what I'd like to get to between us or in

Troy:

my mind is a, a very simple way of describing this new world.

Troy:

What it looks like, and it's, and it all starts with y your kind of like view, Alex, that started, I would say a year or

Troy:

two ago, or a year and a half ago on the podcast, is like, everything's changing.

Troy:

the spaceship's over the White House, and you know, media as you know, it is dead and it's all good.

Troy:

It's all gonna be okay because I

Alex:

I don't know if I, I don't know if I said that.

Troy:

uh, Because I can

Brian:

Is that where step two is a question mark?

Brian:

It's all good as step three.

Troy:

What does it look like?

Troy:

Is that a, I mean, that's me

Troy:

doing this.

Troy:

I'm sorry.

Troy:

I'm sorry I laid a lot out there, but what does that new world look like to you, Brian?

Brian:

isn't that what this podcast is about?

Troy:

Right.

Troy:

Answer the que You just asked me a question.

Brian:

Well, you don't wanna answer the question about what the podcast is about.

Brian:

I don't know what that world is like.

Brian:

I think we're just still, we're trying to figure it out.

Brian:

And does anyone know what it,

Brian:

it,

Alex:

yeah,

Alex:

I mean, no, I mean, I don't,

Troy:

You can you feel me at least?

Alex:

Yeah, I can feel you.

Alex:

I mean, it's, feels like a trailer for this podcast, what you just said, because that's essentially all we talk about.

Alex:

But

Brian:

thought that was what it about.

Brian:

I mean, other than the midlife crises, I thought that was what this is

Alex:

Yeah.

Alex:

Part of that.

Alex:

no, I, I think, I think you're right, though.

Alex:

the thing is like, it feels like in some ways that you can kind of look at the consumer proposition pretty clearly,

Alex:

which is, you know, I'm gonna talk to my computer and my computer's gonna give me stuff, and that, that stuff is going to

Alex:

either be regurgitated you know, in any format that I want audio, video, text, or, you know, it might be able to surface

Alex:

a specific piece of content from YouTube, et cetera, that I can consume like that.

Alex:

But, you know, e everybody, the, the most valuable space in, in technology,

Alex:

what everybody realized is, is that it's, it's, you want to be the interface, right?

Alex:

Google started showing flights.

Alex:

Google started showing weather Google, you know, like, because they don't technically

Troy:

The Europeans don't want Google doing that

Alex:

Right, but I mean, good for them.

Alex:

Right?

Alex:

I, I agree.

Alex:

But like everybody wants to own the interface.

Alex:

Apple wants you to stay on their Apple News product.

Alex:

Every, nobody wants you to go to the web.

Alex:

Nobody wants you to go to the web.

Alex:

So that, that, the tension there now is that these systems require people on the web, you know, which is this kind of great

Alex:

distribution mechanism to make things so that they can feed it to their consumers.

Alex:

Right?

Alex:

And if, and, and, and the trade used to be like, you know, we'll put ads on that and, and you'll get a sense on, on the click.

Alex:

I don't think that any mechanism right now has been figured out to, to generate that transaction.

Alex:

And in part because they've just stolen all that stuff.

Alex:

Like, I mean, let's be fair, they, they, you know, they're, they're using fair use, but they've just gobbled it all up.

Alex:

And, and that's fine for now, but a lot of these sites are gonna be running on fumes.

Alex:

And when they shut down.

Alex:

They're just gonna run out of data or they're gonna be ingesting data that that

Troy:

Or, or they make you a subsistence farmer, which is really what will happen.

Alex:

I mean, yes, but I think like the sub, you know, it, it feels a little bit like in the Mediterranean

Alex:

at some point they were kind of scraping the ocean with those nets to just capture all the food there.

Alex:

And, and they decimated escaping, escaping the sea bottom, and they decimated parts of that, that ocean floor.

Alex:

And there's nothing there anymore.

Alex:

I, I, I think that that's the risk

Troy:

It's still a, still a great place to visit.

Brian:

well, yeah, I was on Corsica and there's no fish like fresh fish from

Brian:

Corsica.

Alex:

The subsist I think the subsistence farming era was Google.

Alex:

Right now.

Alex:

Now it's the kind of like scorched earth era, because I don't see how anybody makes money.

Alex:

I see all the value for the consumer a hundred percent.

Alex:

I, I, I keep saying that this is the interface that people want.

Alex:

But there is, there is very little brand building in that

Troy:

Hey, I would just ask you, dude, when the robots are making

Troy:

everything, which is gonna happen, and it's not gonna take that long, right?

Troy:

When they're doing the assembly lines and they're fixing my you know, my sink and all that stuff we need something to do.

Troy:

We make media.

Troy:

That's all we got to do.

Troy:

We make and we consume media.

Alex:

it's true.

Alex:

They'll just be, I mean, are you say so, so your hypothesis is, I think

Alex:

I, we had talked about that before, but like, eventually, like people

Alex:

will always, yeah, people will always create media, right?

Alex:

People create media.

Alex:

They won't be peeling carrots or cleaning toilets for fun.

Alex:

But, but, but they will always

Alex:

create media for fun.

Alex:

And,

Alex:

and, and with the right amount of

Troy:

And the rest of them will be paid a little bit and then they'll be the craftspeople, the pucks, the people like

Alex:

yeah, look at us.

Alex:

Look at, look, look at the amount of value we generate for free.

Alex:

Sorry, somebody's

Alex:

at the door.

Alex:

I,

Alex:

I'm gonna have to, it's my heart Stop.

Alex:

It's my

Alex:

heart.

Alex:

Stop.

Brian:

Yeah.

Brian:

I know this is, Alex has a hard stop.

Troy:

Alex, I

Troy:

love you.

Troy:

Thank you

Alex:

Love you too.

Alex:

Bye.

Troy:

Okay,

Brian:

Um,

Troy:

before we bring on a ab anonymous banker I also had a thought about emotion and how sometimes I feel

Troy:

like our newsletter has like too much substance and not enough emotion.

Troy:

Like we should just be kinda lighter or we should talk about things that make people feel things like productivity.

Troy:

I. People like that productivity newsletter was shared and read by

Troy:

more people than any of the other stuff that seemed smarter to me.

Brian:

What, Troy, why do you think everyone who creates content on the internet becomes a life coach?

Brian:

It's the inevitable arc. You can start wherever you want, but if you create internet, if you create

Brian:

content on the internet long enough, you become a life coach.

Brian:

That's my theory.

Brian:

Why?

Brian:

Like Scott Galloway is now like, he's like trying to save young men.

Brian:

He was like a marketing professor at NYU.

Brian:

Wasn't he like with, with, I mean, I, I admire it.

Brian:

It's

Troy:

Will you do me a favor?

Troy:

Will you write a little bit about that notion in my question

Brian:

this

Brian:

Yeah, no, I mean if like this ad tech thing doesn't work out, I mean, I'm

Brian:

happy to go into, if anyone wants any life advice, I'm open for business.

Brian:

no, I think people do like that.

Brian:

I agree.

Troy:

I was inspired with that thought by listening to God Help me, a Semaphore podcast where they were interviewing

Troy:

this guy Frank Cooper, who's now the CMO of Visa, who used to work at Def Jam

Brian:

Yeah.

Brian:

He wasn't he at Pepsi.

Troy:

yeah, he was at Pepsi.

Troy:

And, and he, his point was like, what makes good hip hop?

Troy:

And his answer was, it's like, it's not about the best guys or the best rappers or the best lines.

Troy:

It's like, finding something that's within people, making them feel something

Brian:

All right.

Brian:

AB is here.

AB:

Hey, how's it going?

Brian:

Good.

Brian:

Can we go back to talk about the, the skim?

Troy:

No.

Troy:

the, the ab thesis for this week was that, you know, there's the cleanup acts in media that are going on right now.

Troy:

I

Brian:

Yeah, that's, that's the skim.

Brian:

That

Brian:

is the skim thing.

Brian:

The

AB:

And

AB:

taste Taste made.

AB:

to, you know, that's another, yeah.

Brian:

So these are just like.

Brian:

Capitulation deals.

Brian:

I mean, this is like going to the, the scrapyard.

AB:

I think people make a decision that, you know, the growth ahead is, there's a big question mark, and so

AB:

there's a point in time now where you can potentially get out, there's a ton of these names, media names, that people

AB:

would recognize that are either for sale by bankers or informally you can acquire.

AB:

So.

Troy:

you do They say for sale by owner in the, in the capital markets.

AB:

I think it's just discu.

AB:

I mean, people just know where, where the for sale signs are.

AB:

I mean, one interesting thing someone asked me earlier this week is like, where's the wiz in media?

AB:

I, I don't think it can ever exist.

Brian:

What you mean?

Brian:

Nobody beats the wiz.

Troy:

No, no, no.

Troy:

The, the, the cyber, the, the cybersecurity company that sold

Troy:

for $32

Brian:

I, I see my, see, no, I, my, my mind was

Brian:

in a totally different place.

Brian:

I'm like,

AB:

You're watching YouTube Too much.

AB:

Yeah.

Brian:

Well, no discounts, discounting.

Brian:

I mean, nobody beats The Wiz.

Brian:

The Wiz.

Brian:

This whole thing was that like, you know, he's got, he gets, you know, he is the lowest prices.

Brian:

So I was just

Troy:

four.

Troy:

Israeli dudes just sold their company for $32 billion to Google.

AB:

Yeah.

AB:

And under five years, right?

AB:

They created in, in 2020.

AB:

And it, it's, it's funny because in the press release, it's, it's an all cash, there's no earnout and it says subject

AB:

to adjustments, but the adjustments are pretty dim, minimis, probably.

AB:

So

Troy:

Like for coffee and like other sundry

AB:

working capital.

AB:

Yeah.

AB:

But I, yeah.

AB:

I, it is an, it's a, it's an interesting thought exercise of where some value can be created at that speed and scale.

AB:

I think a more easy thing to replicate is like the poppy example, Right.

AB:

I don't know if.

AB:

If you guys have, it's really interesting to watch their Shark Tank episode.

AB:

'cause it was a completely different idea back then.

AB:

And then they turned it, you know, they got a 25% investor.

AB:

One of the guests on Shark Tank invested in it.

AB:

He changed the branding.

AB:

He basically figured out that they had a great product.

AB:

They just needed to fix the branding and their go-to market strategy and created something that

Troy:

But, but you, you can just look for those characteristics in different markets ab and those are the ability

Troy:

to leverage business against a bigger distribution system and particularly something that's high margin, right?

Troy:

So in the case of this the wiz.

Troy:

Basically the hope would be that their product supercharges, Google's cloud

Troy:

offering, which is very high margin and very important competitively.

Troy:

In the case of Poppy, they go to Pepsi.

Troy:

Pepsi has distributions in every distribution into every corner store on the planet, and they could, you

Troy:

know, take you into, you know, any facility basically that they're in.

Troy:

Right?

Troy:

So the leverage on that brand is great.

Troy:

It's the same thing when you see the eye rolling multiples at a revenue level with like someone who sells a tequila company

Troy:

to one of the big, the two or three big, you know, hard liquor companies where they get the distribution advantage.

Troy:

It happens in packaged goods too.

Troy:

So,

AB:

Well, they actually pick up a a ton.

AB:

'cause right now Poppy is distributed through the Anheuser-Busch network.

AB:

So you automatically actually pick up 20 to 30% of margin just by changing to the Pepsi distribution network.

Troy:

Mm-hmm.

Brian:

So what does that look like in media?

Troy:

Well, the only place it looks like that in media, I think is where you have super valuable IP that's not

Troy:

whose monetization's not being realized because of either some, you know,

Troy:

subscription ad selling or distribution mechanism that's underutilized.

Troy:

So if you owned before it was a big thing like Pixar going to Disney, right?

Troy:

Like Disney could make a lot out of that asset.

Troy:

So that would be the example that I would give.

Troy:

Or on the small side I don't know who's got great IP that sells it, you know, in a limited way.

Troy:

Bars still selling to Penn.

AB:

Yeah, you see some of this, it's, it's an interesting way to gauge ip, but I bumped into a company last week

AB:

that is gonna do, it's like an agency with college creators and they're, they did a couple million of revenue

AB:

last year and they're on track to do 50 million of revenue this year.

AB:

Basically because there's so much brand dollars flowing into the creator space and there's not amazing places suspend it.

AB:

So this operating team.

AB:

Has basically become a beacon of a lot of brand money.

AB:

And it's profitable, it's growing the other place.

AB:

I see.

AB:

'cause I think there's like a, a, a deal news that the Boston Celtics just sold for what six or 7 billion is

AB:

in this need around sports rights to continue to monetize the media side.

AB:

Because as the linear deals go down in value, they're gonna have to figure out ways to monetize the YouTube and

AB:

other digital rights, because that's the only thing underpinning a lot of the.

AB:

Value of the sports teams.

AB:

So I, I think there will be continued new company creation and values growing in companies around sports

AB:

teams and athletes and creators to better monetize that content.

Brian:

Yeah, I did you see like Unilever wants to spend like 50%

Brian:

of like their marketing on like creators, something like that.

Brian:

And I just wonder where is that gonna go?

AB:

I think what there's the, the consum, what it is like the consumers, I think we wrote about this, like

AB:

30 to 50% of their time is on, are on these different social platforms.

AB:

So it's more about chasing the eyeballs, but it's tough, right?

AB:

It's like it's gonna go either to the platforms directly or some of these different.

AB:

You know, there's a, a business that's about to be sold that layers on top of

AB:

YouTube that helps to better organize the inventory for brands to spend.

AB:

It's, it's a big business.

AB:

It's 30 million of ebitda illustrated a really good multiple, and it's just like a layer layered on top of the YouTube

AB:

advertising ecosystem, and it helps brands better target their consumers.

Troy:

And on the ad side, I wonder if we don't see those multiples in, what's the

Troy:

name of that ad network that's trading at bonkers multiples the mobile game app.

Troy:

Love.

Troy:

And I wonder if that one isn't driven, partly because it would be very useful to someone like Apple,

Brian:

It's like an alternative to Apple, isn't it?

Troy:

right?

Troy:

But someone sees an opportunity.

Troy:

I mean, it's, it's, it's beyond multiple comprehension, isn't it,

AB:

I mean, it's trading.

AB:

yeah.

AB:

And then, I mean, the whole thing is like they've cornered the market in terms of driving app installs, and there's a

AB:

couple ecosystems that they play into for example, like casual gaming, it, it.

AB:

It exists because it's basically farming a user for three to six months in terms of showing 'em ads,

AB:

and then as soon as they get tired of that game, moving into the next.

AB:

So you need these ad networks that can do app installs and other things to drive consumers to the next app.

Brian:

It's basically most of mobile gaming is arbitrage.

Brian:

Yeah.

Brian:

It's great.

Brian:

Arbitrage is everything.

AB:

It's like plugging people into this matrix of just go, taking their attention for an hour or two a day, getting them

AB:

highly addicted to a game for three to six months, and then moving them to the next.

Troy:

You know what's amazing ab is that the contrast between market reception to something like app loving, which is,

Troy:

you know, an ad network that focuses on a certain, you know, inventory type and, and, and consumer behavior

Troy:

to Tabula that focuses on a different inventory type that has incredibly broad distribution penetration, but

Troy:

can't seem to get out of the, like doldrums from a valuation perspective.

AB:

Yeah, I mean, I think the ad product, I mean, tabula continues to try to innovate its different ad products and

AB:

they mentioned they're getting into performance with Microsoft and MSN.

AB:

I think that the app love and ad product actually works at a pretty high.

AB:

Like fidelity, and they're getting paid significantly for those

AB:

app installs, whereas everyone's encountered the tabula ads.

AB:

You land on pages that you're like, what is this?

AB:

Right?

AB:

It's like very weird.

Troy:

Before and after.

Troy:

It's before and after, man.

AB:

It's, tricking a, it is tricking a subset of consumers

AB:

to buy stuff, but the majority of people literally exit out in two.

AB:

They're like, where, how did I accidentally land on this page?

Troy:

toning skin, toning, dental

Brian:

Yeah, just to put like numbers.

Brian:

So App Loving stock is up 333% in the last year and Tablos is down 31%.

Brian:

Hey, do you know what, what is going on with the Trade Desk?

Brian:

It's funny 'cause they were the, the sort of standout of the Ad Tech publicly traded stocks and, and now

Brian:

they're going through this this period where everyone's down on Trade Desk.

Brian:

Do you follow that at all?

Brian:

AB.

AB:

I mean, I just Googled it so they didn't meet the revenue expectations,

Troy:

For

Troy:

one outta the last 20 quarters.

Troy:

Yeah.

AB:

yeah.

Brian:

they're down 52% year to date.

AB:

Yeah, I don't, I don't follow close enough to have a good perspective.

Troy:

my take.

Troy:

They're, the market is seeing that they're too reliant on, they have a lot of revenue in the page-based ecosystem.

Troy:

They

Troy:

didn't defy gravity, And that they're not penetrating you know, video is, or, or what do you call it?

Troy:

CTV as well as people maybe hoped.

Brian:

Yeah,

AB:

If you look at like the, the Critio stock, you know, so much of, of when it was, it's, it's back to a, a relatively

AB:

good price, but so much of what was priced into it is their expectations of retail media and the growth.

AB:

And so a lot of these.

AB:

Stocks.

AB:

The reason why they're they trade up or down is because they come up with a thesis.

AB:

They say, we're gonna be able to grow to this much revenue in three years

AB:

because we believe the ad market is going to shift in this direction.

AB:

We know that agents, there's a lot of blockers for change in the ad world.

AB:

And so when that doesn't come to fruition as fast as people think, that's

AB:

what happened to Criteo is like they basically this was two Decembers ago.

AB:

They turned off their, they said, we're not gonna be able to hit our projections.

AB:

You know, this isn't coming to fruition as quickly as we thought.

AB:

And then the stock dropped 50% overnight and it was literally the last question on an earnings call.

AB:

Someone pushed in and, and figure this out.

AB:

And so I think that's what a lot of these companies are based on is.

AB:

Market forces, they, they don't, they're not completely in control of themselves.

AB:

They're hoping the buyers shift in a certain direction.

AB:

They can command more of the ad dollars and then take a higher margin.

Brian:

Should we

Troy:

other questions

Troy:

I can give you a little, a little good product taste

Troy:

if you want.

Troy:

I'll get back to, to, you know, grocery items soon.

Troy:

And then maybe electronic products.

Troy:

Like, nobody wants to know that Dyson is a, you know, good cordless vacuum.

Troy:

Right.

Troy:

Uh, you know, clearly comedy's having a moment, and now comedy and politics are seemingly inseparable.

Troy:

But there's a show I tuned on Lasette.

Troy:

I'm not gonna put it up as good product, but it's maybe at a little bit of a lead in.

Troy:

And it's called, last one, laughing.

Troy:

Do you know the show?

Troy:

It's being franchised into every, there's one in Germany, one in Canada,

Troy:

and basically they put 10, 10 comedians in a room, and if you laugh, you lose.

Troy:

And so then they set up a bunch of pranks to that.

Troy:

They can all do, like, they put one of them on stage and he or she tries to get the room to laugh or they have, I don't

Troy:

know, like just different kind of gags that, that are like, there's one thing where you put the person on a stool and

Troy:

then all the other comedians get to come up and whisper something in their ear and to see if they can make them laugh.

Troy:

And it's like not great.

Troy:

Six hours of entertainment.

Troy:

But it's a really interesting new format and it's on Amazon Prime, the UK one.

Troy:

'cause the British are the funniest people.

Troy:

I mean, if you loaded it up with really funny people in America, you might be able to make it work in the, you know,

Troy:

people in the UK are, I mean, generally speaking, the British are funny.

Troy:

I don't know about the German one.

Troy:

That may be just ironically funny.

Troy:

But anyway, last one.

Troy:

Laughing.

Troy:

Not quite a good product, but interesting experiment.

Troy:

There's a good new Mo Black bag is a good movie, by the way.

Troy:

It's a se Soderberg movie starring Kate Blanche and Fastbender Marissa Ella from Industry Tom Burke.

Troy:

And it's perfect.

Troy:

90 Minutes of Entertainment.

Troy:

It's like.

Troy:

A stylish spy thriller.

Troy:

Everybody needs those.

Troy:

And so I, I re But that's a good product for sure.

Troy:

And the last one I would say is your friend Alex Kitz interviews Juan Koon on YouTube, where they talk about this

Troy:

sort of existential question that we were talking about with Alex, which is when will AI make its own discoveries?

Troy:

When will it show insight?

Troy:

When will it ask?

Troy:

Not answer questions, but maybe ask them, and

Brian:

Koon is like a, he's a dor, isn't he?

Troy:

I don't know.

Troy:

I don't, I don't, no, I don't, I don't think so.

Troy:

I think he's more of a kind of realist.

Troy:

he's great.

Troy:

We'll put the link in the notes.

Troy:

I think Alex is a really informed, good interviewer.

Troy:

I, I like watching

Troy:

his stuff.

Brian:

Good.

Brian:

I like Alex.

Brian:

All right.

Brian:

You have a good product ab.

AB:

Well, I have two, two comments.

AB:

One interesting thing in this world of content creation, comedians seem to be brought up more and more around like,

AB:

there's a business called Donut Media that sold to recurrent a few years ago, all in the auto space, and they

AB:

were basically able to arb the, the va, the cost of content creators by going

AB:

to these like second tier comedians and getting them to do YouTube shows.

AB:

So.

AB:

It's, it's an interesting thesis that people are using to basically find cheap content creators that are good,

AB:

that can do shows, be funny on the fly and they're not worried about them necessarily taking over a YouTube

AB:

channel or a brand where they become like the, the focus of attention.

AB:

So, I, I feel like being a, there's never been a better time to be a second tier comedian.

Troy:

in other words, there's good multiples on second tier comedians right now.

Brian:

you can ar,

Brian:

you can arb.

Brian:

Second tier comedians

AB:

Most of them, you know, can't make, they're just happy to pay their rent and get health insurance.

AB:

And their desire is to be a comedian, not to be, not to be a media.

AB:

The other thing is

AB:

I ask people,

Brian:

things don't change.

Brian:

This is how media got built.

Brian:

I mean, right.

AB:

Yeah.

AB:

The other thing is it feels like I. So I ask people all the time, like, are you using ai?

AB:

And it feel, it, it finally feels like it's turning more into a tool versus a toy.

AB:

And even across age ranges, everyone seems to be using it now.

AB:

Like every call, even people that are older that I would never

AB:

think would use AI are like, oh yeah, I'm using it every day now.

AB:

So I think that's, this happened in the last few weeks and I've just

AB:

been surprised the the broad group of people that say they're using it.

AB:

On a daily basis, and actually big investors, other bankers people in corporate development.

Troy:

Yeah, it's it.

Troy:

It's the moment like when grandpa got on

AB:

a hundred percent.

Brian:

How is it used in like in your field, like how do you use it?

AB:

I mean, so the, the simple example is you're going to a meeting with someone you didn't have time to prep.

AB:

You put in their name, you put in their company, and you tell deep research to tell you the things that have happened

AB:

in the last year, like what you should talk about, like simple things like that.

AB:

Say if we're taking a company to market in space.

Troy:

That model you sent me the other day, did it do that?

AB:

No, no.

AB:

There's a, there's a couple companies that we're testing out right now that are supposed to do this stuff, but I think

AB:

what's interesting is the, the underlying foundational models are actually getting better than the wrappers, right?

AB:

So there's a company called Rogo that's at a bunch of the banks helping people do presentations, but.

AB:

Chat.

AB:

BT has actually gotten better than that, so than that, that?

AB:

program at, at doing the, the work.

AB:

So it, there's nothing good in Excel modeling right now for buyer lists.

AB:

I mean, it's all the basics of, of a first or or second year analyst.

AB:

The models can do now.

AB:

And I think, I think where the junior level staff is gonna move as

AB:

more of a manager of these AI tools to just produce a lot more work.

Troy:

will it buy me lunch this afternoon?

Troy:

Will it send me a bottle of good tequila?

AB:

Exactly.

AB:

Yeah.

AB:

I mean, that's, that's the pa, that's the future, and that's what I push A couple of these folks on is like the kinetic,

AB:

basically, where it's sitting on top of your CRM and saying, Hey, you should reach out to this person, da da, da.

AB:

Like that hasn't happened

Troy:

That's it for this episode of people versus algorithms where each

Troy:

week we uncover patterns shaping media culture and technology.

Troy:

Big thanks as always to our producer, Vanja Arsenov.

Troy:

She always makes us a little clearer and more understandable and we appreciate her very, very much.

Troy:

If you're enjoying these conversations, we'd love for you to leave us a review.

Troy:

It helps us get the word out and keeps our community growing.

Troy:

Remember, you can find People vs.

Troy:

Algorithms on Apple Podcasts, on Spotify, and now on YouTube.

Troy:

Thanks for listening and we'll see you again next week.

Brian:

All right.

Brian:

This is a little bit of an uneven episode.

Troy:

Alright.

Brian:

be honest with you.

Brian:

I gotta do my next

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About the Podcast

People vs Algorithms
A podcast for curious media minds.
Uncovering patterns of change in media, culture, and technology, each week media veterans Brian Morrissey, Alex Schleifer and Troy Young break down stuff that matters.
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