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The fact that they have a million different subscriptions that are paying for this content is remarkable, right? I mean, we never would have thought this five years ago that what is basically a blog It's wild.

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But one of the interesting things is that I think a lot of newsrooms in the beginning of the Substack boom saw Substack as this great threat, and it turns out it really was never a threat to most newsrooms.

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It was a threat to this idea that you have to get quality content from a news organization.

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[upbeat music] Welcome to the Rebooting show.

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I'm Brian Morrissey. This is the first show of the year. We're now, I think, eight episodes in, so, uh, hopefully I'm getting a little less rusty.

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Appreciate everyone who has, um, shared this podcast or left a rating or a review on Apple. It helps people find this podcast. One note, I'm, I'm gonna get the podcast on Google Play. I'm just dragging my feet on that.

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So to kick off the year, this is gonna be a mini season all month in which, uh, we look at some big picture trends of what's to come in 2022.

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[upbeat music] This week's episode of the Rebooting show is brought to you by Audigent. The key to sustainable media business models is having a tight relationship with your audience. That means understanding them.

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Audigent helps leading publishers like PMC and Fandom to unlock the power of their first-party data with an industry-leading data activation, curation, and identity platform that's supported with best-in-class tools and teams that boost business outcomes.

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Audigent was founded on the belief that first-party audience data is the critical asset of media businesses today and into the cookieless future.

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The Audigent platform is a flexible, turnkey solution built to deliver value for publishers of all sizes, regardless of existing internal resources. To find out more, visit audigent.com. That's A-U-D-I-G-E-N-T dot com.

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[upbeat music] So to kick things off, my guest this week is Sarah Fisher. Sarah is a media reporter at Axios, who covers the ins and outs, the media business. Her Media Trends newsletter is a must-read, I have to say.

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Uh, highly recommend it. Sarah, thank you so much for joining us from rural Idaho. Hey, thanks for having me.

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I'm glad you're not in the big city of Boise, so if there's any ambient noise, that's because, uh, Sarah is not disturbing her family and is, and is so dedicated, she's outside of...

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I'm just imagining a cabin or something- [laughs]... because it's Idaho, but maybe not. It's probably just, like, suburban subdivision. [laughs] Yes. So let me kick things off.

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I wanna get into these five sort of big trends, I think, to, to discuss. But from your standpoint, in covering this industry, what do you think the toughest part is? It's tough to be a media reporter at a media company,

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so you wanna make sure you're being completely objective at all times. But I'm a shareholder in my own company, so- Yeah... that's an interesting challenge.

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My company is also a part of conversations about deals and, you know, investments, and so making sure you're separating any and all of that from your reporting is really important.

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And then I think the other big challenge is that the industry is going through sort of a reckoning around measuring success, and it's hard to quantify progress in the industry, whether it's television or digital, social, you name it, when we just don't seem to have a ubiquitous understanding of how to measure success.

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So those are sort of the two biggest things I face challenge-wise day to day. Yeah. I...

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The second one definitely, it definitely speaks to me, just because digital media in theory should be completely measurable and transparent, but it completely is not. Like, we saw that with- Right...

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Ozzy and how, you know, bullshit can be baked in because there's always different metrics that can be bandied about, and a lot of stuff is really difficult... It's really difficult to check.

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It just is, because a lot of it is not based on third-party services, and even the third-party services have their problems.

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So to kick it off, I wanna talk about a consolidation, because I think that was one of the big themes of 2021, and I, I expect it to continue to 2022.

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Because it's actually been three years really since Jonah Peretti first floated this idea in The New York Times, that this needed to happen, and it has been happening since then.

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I mean, BuzzFeed itself bought HuffPost, Group Nine, Complex. There's definitely gonna be more deals coming. W-what do you expect to see on the consolidation front in 2022? I agree. I think there's going to be more.

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I think one of the differences between 2022 and 2021 is I think there's gonna be less talk about consolidation happening through SPACs at the IPO process.

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I think it's going to be more traditional, and that's just because, one, I think we've seen with BuzzFeed being the example that there are some unique challenges to doing it that way. Two, the SPAC market is cold.

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And then three, I think it's hard for people to come to agreements about who to merge with in those types of deals.

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So I think what you're gonna see is more consolidation, but it's going to be private, so similar to what you saw with Vox Media merging with Group Nine.

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And you're also going to see more low-hanging fruit continue to get scooped up. We saw a few big deals.

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I noticed in your newsletter, and I agree, the deal that you called out was Dotdash buying Meredith for $2.7 billion.But I think we're gonna see a lot more of the sort of some spider studios getting acquired by Bustle type of acquisitions where the folks that eventually want to IPO or eventually wanna have a big liquidation event, they buy up smaller entities to build up scale, and I think that will be what we see a lot of in twenty twenty-two.

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Yeah. And just I... Correction, I misspoke. I- my, my roll-up, I got, like, Group Nine went to, to Vox. I gotta all these... I, I need a handy chart, um. [laughs] All the same these days.

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[laughs] It's just why don't you just have one company? I actually... Brian Goldberg joked w- with me about that he was going to buy every single digital media company, and I...

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we would have to rename Digiday to Brian Day. [laughs] Which is very on brand for Brian. So who do you expect to be the major players, though?

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'Cause I think it's, like, sort of separating a little bit, and it's pretty clear.

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'Cause look, when y- we talk about consolidation, like you said, like, everyone sort of agrees that it needs to happen, but everyone wants to be the consolidator, not the consolidated generally. [laughs] Yeah.

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But who do you expect to be leading this? I think you're gonna have different companies lead it from different angles.

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So what's interesting about Dotdash and Meredith is Dotdash is really one of the most powerful digital media companies when it comes to search and selling ads and commerce against peop- sort of intended interest to solve a question or solve a problem, answer a question, or buy something.

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Whereas if you look at what BuzzFeed is building, a lot of that is really based off of sort of, like, social engagement, uh, a little bit of commerce as well.

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And then if you look at what someone like Minute Media is building, which is a really interesting company, they're not focused on either of those things.

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They're focused really on the tech stack in acquiring brands that they can put into it, but also acquiring technology partners that can help build their tech stack.

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So you're gonna have a few big players, and they each own a different chunk of this. Who do I think will be the big ones?

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I think there are two companies, and again, one you mentioned in your newsletter this morning that I've been following closely.

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There are two companies that stand out to me for aggregating magazine brands to do digital and commerce and lifestyle, solving problems, answering questions, content. One would be the Dotdash-Meredith conglomerate.

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Mm-hmm. Another would be Future, a UK-based company that's aggregated a bunch of magazines.

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And then there are a few others out there, like Outside is doing some interesting stuff with magazines, so I think they'll be big.

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I think in the pure play sort of like digital-social space, the two big ones are gonna be the Vox-Group Nine conglomerate and then whatever BuzzFeed is building.

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They will join some of the bigger entities who are more low-key about their dominance, which is like J2 and Red Ven- although those two are very utility-based. Yeah.

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And then I think, like, the tech stack conglomerates are super interesting to me. Um, again, I think Minute Media is interesting there. I think actually The Washington Post is kind of interesting.

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They've told me that they think Zeus, which is their ad tech arm, will hit a hundred million or nine figures in the next year or so.

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They think Arc, their publishing CMS business, will hit a hundred million in the next three to five years. And then, like, selfish plug, I actually think what Axios is building with Axios HQ is super compelling.

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It's gotten some coverage, but I think that will be a pretty formidable tech stack if we can get it, um, to where we want it to be. Yeah.

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A- it's interesting what you mention with the different types of publishers, 'cause I was always reminding, like, our team back at Digiday about this, 'cause there's so many different types of publishing models in, in digital media.

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And I think what's interesting is, and, and we're gonna talk later about the Web3 stuff, but really the Web 1.0 has probably produced more sustainable and scalable models than Web 2.0. Yeah.

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If you think about search versus social, BuzzFeed i- is the sort of poster child of the Web2 social world, and then you look at the search-driven world, the SEO world. That's the old school.

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And you have Dotdash, which came out of About.com. You have Red Ventures. We didn't talk about them, but they're incredibly successful with Bankrate and Points Guy and a lot of these- Mm-hmm... unglamorous business.

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And then Ziff Davis, like, the, the former J2, or maybe they're still J2, I don't even know. Yeah. But they've built a really powerful model. No one really talks about...

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They, they talk about Dotdash, but, like, Ziff and Red are massive and incredibly- Yes... profitable companies. Yes. And they're intentionally quiet. If you talk to them- Yeah...

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about their strategy, part of being quiet is so that they can go in and scoop up assets that they think are going easy to turn into their profit machines.

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Uh, Red Ventures recently acquired, uh, quietly acquired, like, a new health website to add to their growing sort of healthcare vertical. And again, that's really important utility content.

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You know, you're not going on social media, although there's a lot of healthcare stuff on social media, to figure out what to do if my child, you know, swallows a bottle of nail polish.

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You're going to one of these sort of health expert sites that's been aggregated by Red Ventures or, you know, very well with Dotdash. A lot of search engine traffic to be monetized from that. Yeah.

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And that's why I think Future is interesting. Again, you know, they don't have the, the sexiest brands for the most part. I mean, they have some magazine brands, but really the drivers there are SEO-friendly brands.

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And I think that the growth of commerce has actually made this SEO model even more valuable- Totally... which is gonna be interesting.

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So let's talk about subscriptions, because the shift to reader revenue has been going on for a few years now, and I think overall, despite a lot of the doom and gloom, a lot of publishing businesses are a lot more stable now because they're less dependent on advertising.

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Doesn't mean subscriptions are the be all and end all, but The New York Times is nearing eight million subscribers, and that's a remarkable achievement. And they'll probably get to ten million.

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But we've also seen some struggles, right? Particularly after... I know you've been writing a lot about the Trump slump, which was kinda obvious that it was gonna happen.

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There was a recently an article about The Washington Post that they've actually been losing subscribers. Yeah. I saw that article from Ben Wootten at The Wall Street Journal. It was really smart. Yeah.

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I think my take on that isGiven the absence of a very volatile news cycle, publishers are needing to figure out, how can I provide some sort of a lifestyle service or a professional service in order to get people interested in paying for content?

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And so you see companies going one of two ways. On the lifestyle services front, I mean, that's where the New York Times has really shined, cooking and games and crosswords.

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And, you know, if they acquire The Athletic, then it will be sports and Wirecutter.

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And then on the professional services side, you have some efforts, you know, I think about TechCrunch is now has, like, their, you know, paywalled site, which is more for venture enthusiasts.

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Axios is launching a pro vertical, which is really geared towards high-end professionals. The Wall Street Journal's sort of pro subscription model is geared for people who are practitioners.

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So there's sort of one of two ways to go about it. I think where you're gonna see some struggle is just, okay, our subscription is paywalling the site, and our site is sort of general news.

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I think The Atlantic has been a good example of how this can be a challenge.

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If you're not giving somebody something that they have to pay for to make their lifestyle better or to do better at their job, it can be tough to get them to open up their wallets when they're paying for so much other stuff, whether it's Spotify or Netflix, et cetera.

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Yeah. The middle always gets crunched in these markets. Yeah.

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And I think even with the subscriptions, everyone goes to the top end of the market, The New York Times, even the Post, and, you know, in the UK, The Guardian and whatnot.

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But the reality is you've got a, you know, B2B professional market, which is, is always good because there's a reason that business class airline tickets cost a lot of money, because people tend to be okay spending money that's not theirs.

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And then you've got the top end, but, like, you can't...

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You can only have so many subscriptions, and I think that's, that's the big question is whether these lifestyle, particularly lifestyle categories, whether subscriptions can truly be a meaningful part of those models.

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Yeah.

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I think that there, to your point, there's just a threshold, and we're starting to try to figure out where that threshold lies, and not everyone can rush to a subscription and expect to see the same kind of success that the first movers saw, like The Times when they started to aggressively pivot to subscribers.

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And if you even look at their competitors, you know, The Post with two point seven million and The Journal with two point something million, maybe three million, they're far behind.

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You know, there's not going to be- Yeah... a ton of winners in that space. But also how old their subscribers are.

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I mean, I- it's just a reality, like The Wall Street Journal subscriber base is really old, and I was surprised with that Journal article with just how many of The, The Post's subscribers are over fifty-five.

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And so I think that's why The New York Times was really smart with diversifying into categories like cooking and games because you- you're gonna exhaust the fifty-five plus category. [chuckles] Totally. Completely agree.

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So the other thing that I think has been a big story this year, and it's coming off of subscriptions, is sort of the rise... I think Substack is a...

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Obviously I, I publish on Substack, but it's an interesting sort of canary in the coal mine to me, like, uh, for what I call, like, the unbundling of publishing.

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The fact that they have a million different subscriptions that are paying for this content is remarkable, right? I mean, we never would have thought this five years ago that what is basically a blog- It's wild.

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But one of the interesting things is that I think a lot of newsrooms in the beginning of the Substack boom saw Substack as this great threat, and it turns out it really was never a threat to most newsrooms.

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It was a threat to this idea that you have to get quality content from a news organization. You could still get quality content elsewhere, but it doesn't threaten newsrooms themselves.

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I mean, if there's a person who wants to have their own autonomy, their own voice, don't you want that person to go off and be independent rather than, you know, necess- I mean, there are some happy mediums, but rather than try to squeeze that person into your culture and your mission.

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And so I actually think that the Substack model is doing a lot of good [chuckles] for traditional outlets.

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It's forcing them to figure out, okay, where do I need to adjust to potentially give writers more money, more autonomy as the creator economy gives them a little bit more power?

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But also, like, maybe certain personalities, people, verticals are best going independent, and that's okay for us. So that's my take. Yeah. A- and it seems like a lot of media companies are trying to co-opt this.

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I've been meaning to write this with the different, like, newsletter models because newsletters are... I think what, what a lot of publishers are finding is that they're a great way to mitigate churn. Yes.

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And also, they're very easy to count. Like, one of the challenges, again, going back to what we were saying in the beginning, is that it's hard to convince stakeholders how to measure your success.

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Subscribers has become this metric that we know moves the needle on Wall Street, and in order to be-- to get someone's email, the term we use is that you're a subscriber, and there's been a lot of conflating of that term.

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Okay, well, are you a subscriber if you're paying for it or if you're getting it for free or whatever?

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But I think the concept of being an email subscriber is very easy for investors and stakeholders to understand that as monetizable progress as opposed to being a unique monthly visitor.

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That's something that's become a less... a more diluted metric, I think, as we're moving away from s- you know, total ad-based scale. And so that's why I think a lot of media companies are leaning into this.

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It's like a way to show measurable progress. Yeah. Mm-hmm. And but again, it's like also, like, impossible to, like, check, right? I mean, like, people will say, it's, "I've got two hundred and fifty," not I don't.

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Well, I could say it. "I have two hundred and fifty thousand subscribers," and there's no Comscore. Not that Comscore was totally accurate, but there's no Comscore to check that out.

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That's why I, I actuallyThink a good business model is- Oh, that's smart... some kind of auditing bureau for email- Yeah... newsletter list size. That's really smart.

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Because you have to take people's words for it, right? Like, I have a 52% open rate. It's funny you say that. I like, I try really hard not to cover open rates for that exact reason.

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It's just something that's really hard for me to vet.

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And so when people say they have really high open rates, like, that's the one thing I feel kind of uncomfortable publishing 'cause I just have no way other than just trusting you. That's the reality. Yeah.

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And it's a bad feeling. Anyone who's like... Uh, anyone who wonders why, like, reporters are a little wary of... Because people are always, if they're not, if not lying to you, they're like sort of, I don't know.

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I mean, sometimes it, it... And everyone has had the, the experience as a reporter of, of being too trusting of, of what people are saying because they're finessing things. And even, like, with email subscribers, like,

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there's a lot of things being done in order to rack up big numbers of email subscribers and paying subscribers.

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So email subscribers, a lot of people rely on contests and referral pro- and various things that incentivize subscriptions, right? And on the paid side,

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so many people are, are piling up big numbers with these dollar deals that then get jacked up to the full rate, and you get the angry customer service emails because when someone's paying a dollar for a, a month, and it goes up- Yeah, this consumer trust issue is massive, and it's going to become a bigger topic of discussion in my opinion.

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The FTC now is cracking down on some of these newspapers that would force you to call to cancel your subscription. Yeah. One of the things I find so interesting,

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if you ask any of my friends, "Do you subscribe to this news outlet?" And they'll say no, because they don't feel as though the news industry respects their dollars.

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Because even just one or two big players pulling that kind of thing, it creates a system of distrust for the entire paid news category. So hopefully, I don't know what that expression is, high tides rise all ships.

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Hopefully, when everyone starts to be a little bit more transparent with their readers and their- Yeah... customers, then the public will have [laughs] more of a trusting relationship in paying for news.

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But I actually think that's been a massive barrier in getting people to subscribe. Yeah.

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And I think that a lot of the stuff around subscriptions, paid subscriptions, you know, it almost gets, like, religious to some degree.

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It's subscriptions are virtuous and ads are evil, but that's not necessarily the case. You can have a more transparent, open, and frankly audience-friendly ad model

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versus a subscription model because a lot of subscription models- Mm-hmm... are really bait and switch, right? And this is not just a news problem. Like, I'll use Masterclass. So I got a subscription.

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I've never once used it. They have emailed me, like, five times a week that this latest celebrity is blah, blah, blah, blah, blah, blah, blah. Guess what they did not email me? Oh, yeah. When- Oh, yeah...

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it was coming up for renewal, and they were about to whack my credit card with $250. They did... That was just a little bit of an oversight.

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I'm like, "I hear from you, like, three or four times a week, but now I'm not hearing from you. You, [laughs] you go quiet."

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[laughs] I got a gift card for a $50, like, box or something, and I had to input my email to verify the gift. [laughs] And that put me on a paid subscriber list. And they started charging me or asking me for my...

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They didn't have my credit card. So, like, those types of examples- Oh, boy... totally, it's, it really screws with consumer trust.

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And to your point on the ad model being more transparent, now that we've kind of weeded out some of the craziness, not all of it, but so many interstitials and so many of the pop-ups, you know, Google has said that they're not gonna get send traffic- Yeah...

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to publishers that have some of these crazy ad units. I actually think the ad experience is a little bit more manageable, and people are more willing to tolerate it now than they were maybe five years ago.

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Mileage may vary depending on the newspaper site that you go to. [laughs] I would check out the local site there in Idaho. I don't know exactly, but, like, usually local...

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When local newspaper sites are broadly usable, I'll believe that we're making true progress on that front. But on that, let's take a little detour into the, the third-party cookie. So let's rewind, like, a year ago.

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Like, I- the sky was gonna fall. They were- Right... gonna take away the third-party cookies. There was privacy sandbox, all this stuff. The entire publishing industry apparently was going to collapse. Yeah.

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[laughs] And, and democracy itself was at risk. And guess what? None of that happened. No. None of it happened. [laughs] None of it happened. The ad market did really well in 2020.

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You know, for all the talk about how, like, ad tech was doomed and- No... capitulation deals consolidation. Yeah. I love covering ad tech, and I'm so happy it's doing well 'cause there's a lot for me to cover.

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Did you say you love covering ad tech? You're right.

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There was this doom and gloom about ad tech, and part of that goes back to since our business is successful [laughs] and, you know, I think Wall Street has really turned because both the ad market is really hot and doing well, but also because privacy can change.

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Like, we don't... We're not, uh, threatened by a national privacy law anymore. You know, we were for so long, and it was just completely stalled for the next few years.

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We've got, uh, some state bills, but I think the whole ad industry has kind of coalesced around the lowest common denominator, which is the privacy deal out in California, CCPA.

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And so now that we know what we're working with from a regulatory perspective- Mm-hmm... the digital ad market is booming. I think there's a lot of optimism, so that's one piece of it.

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And then the other piece of it which is super interesting is you're having these little cottage industries that are popping up around the uncertainty of digital advertising.

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So you're seeing these companies like DoubleVerify and Integral Ad Science go public, raise a lot of money because they're just verifying that your ads were spent the right way and that they weren't being shown to bots.

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Like, that is new compared to what we were seeing a few years ago. There wasn't an industry around ad verification. There wasn't an industry around ad tech specifically for smart TVs.

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These new cottage ad tech industries are massive and exploding, and when there was a doom and gloom era of ad tech, we just didn't have them. Yeah.

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I always go back to the idea that digital advertising is going to use less dataThan it does now is just... It's kinda ludicrous.

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Like a- and I d- I think it'll just be different types of data, and like the wanton collection of data is going to be constrained whether it's by tech platforms or by governments or some combination.

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It's going to be, and it, it should be. It needed to be cleaned up anyway. Yes. But you know what it is? There's a shift from collection of individual data- Yeah...

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to cohort data, to, you know, how can we leverage data from- Mm-hmm... large, uh, amounts of people to make inferences about what someone is likely to buy or act on.

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And in a sense, that [laughs] actually requires more data to make those cohorts usable and effective.

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But what is different about them is they protect individuals, and I think that's a huge shift in how we're thinking about ad tech and privacy.

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The challenge though, to your point, is there's no solution as to how we go about this sort of cohorted process.

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Google tried to put out this, a proposal called the Privacy Sandbox that's gotten a lot of, uh, [smacks lips] blow back, but also has caused a lot of confusion. They keep delaying the sort of new standard.

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They call it FLOC because the industry can't, you know, sort of coalesce around it. You have other people who are trying to create new ways to identify people with, you know, email addresses and all this.

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Like, there's just no sense of how we're going to tackle this. I think we'll get there eventually. We have to. Yeah. But right now it's still a little of a cluster. Yeah. So like, uh, I...

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But I think broadly, don't you think that... I mean, broadly, the pendulum has swung and will continue to swing a little bit- Totally... away from audience-based one-to-one marketing. Totally.

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Like, this is something that like, you know- Yes... the nerds love and stuff like this, but regular people often find creepy towards content and like broad categories, 'cause it, it can be almost as effective. Totally.

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It's, it's okay. You got 85% of the way there, and you didn't creep people out. Contextual marketing is really becoming more powerful as we lean away from individual one-to-one marketing.

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And what's also interesting about contextual marketing is if done right, to your point about being less creepy, the experience can be more valuable.

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If I'm getting an ad for sports gear a- alongside an article about fishing, that's because, and that creates an experience that I'm, I'm willing to look at that ad.

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You know, I'm already in an environment that feels endemic to it as opposed to you spamming me with the things that you know that I want, like a new toothbrush while I'm- Yeah... visiting a fishing site.

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It doesn't make much sense. Right. And, and guess what? That's how advertising had worked before. It reminds me of kinda like the Tour de France.

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You know, EPO came on the scene, and everyone was using these, these different types of drugs in order to get- Mm-hmm... their hematocrit levels high, and then they just went back to blood doping- [laughs]...

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like what they'd been using forever because you know what? It works. It's fine. It's a little gross, but it works. I'm kinda reminded of that because contextual has always been powerful.

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It's what advertising has been based on. Doesn't mean that one-to-one marketing has a no role. Totally.

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The direct mail industry is one-to-one marketing to a large degree, and there'll always be a direct marketing industry. And guess what? The direct marketing industry- Mm-hmm...

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has always been viewed as like the underbelly, right? Very lucrative and very effective, but it's always been viewed as the underbelly. Yeah. People call direct, uh, mail junk mail for a reason. Yeah.

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Direct marketing or direct mail rather, I always think about it like this.

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The one type of marketing where you need to have a re- measurable return on investment in a short period of time is political, and I cover that a lot 'cause I'm based in DC, and direct mail is like the underbelly of political.

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Uh, it has been for a long time. Yeah. And people wouldn't be doing it if they didn't think it was, you know- Oh my God... pushing those votes.

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I find it hilarious that any of the politicians talk at all about like how companies need to be, uh, more respectful of users' privacy and stuff like this. They sell your data to anyone and everyone.

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[laughs] Anyone who has ever made the mistake of giving, like, $20 to a, a political candidate, your life is going to change. I bought some Beto O'Rourke T-shirt. I don't know why. My life has not been the same.

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Beto has, has sold my information to, like, everyone under the sun. [laughs] So let's talk about Web3 for a minute. What I think was, is interesting is the conversation when it comes to, to Web3 and media

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actually coalesces with this idea that advertising in some ways has led- Mm-hmm... to a terrible misaligned incentives in, in the internet economy. Yeah. Do, do you see that? Yeah, I see that 100%.

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And it's interesting when I think about Web3, I think about... Tell me if you agree. The core underpinning- Mm-hmm... of it is the blockchain.

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It's having full transparency in every kind of value transaction, whether that is trading data for content, [laughs] whether that's advertising or et cetera.

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And I think one of the issues with misaligned incentives is a lack of transparency. And so I think there's a lot of opportunity for Web3 to help the publishing industry become more aligned with core values.

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The challenge though is it's still so nascent [laughs] and still feels like such a buzzword that it's really hard- Yeah... to tell what are the actual viable solutions. Like, we know that there is promise there.

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We just don't know what it's go- how it's going to take shape, when it's gonna happen, and who's gonna be the leader.

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One of the investment firms that you mentioned in your newsletter, The Turning Group, they hired Jared Dicker from The Post to kind of champion investments in the Web3 space and for media, but not just media.

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And so I think there are investment firms and there are smart individuals who are taking a look at this and they're saying something's there, but, uh, I'm still waiting to see exactly what it is. [laughs] Yeah.

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There's not a lot of meat on the bones.

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I have to say, like, having lived through Web1-Web2 and now we- uh, in the beginning of Web3, I don't remember then to, like, go into these inscrutable riddles in order to describe- Yes...

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Internet 1.0- To brand the shit... and Web 2.0. [laughs] People were like, "Look at this." Totally. Like, even...

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They might have had, like, annoying branding terms like the sharing economy when it was really just unregulated hotels and taxi services.

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[laughs] But you could actually point to things and be like, "Look," I mean, you can, like, get, like, a car that shows up and takes you somewhere. Yeah, I mean, we can point to some things, right?

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[laughs] Like NFTs, we can point to some things. You know, Kyle Chayka, a New Yorker writer, he- Yeah, yeah... based his entire newsletter based off of NFTs. [laughs] Like, he- Yeah...

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there is, there are some examples to point to. I just don't know how they're gonna scale, and so that's the question I'm looking for. But to your point about the branding thing, it's so funny.

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When you are branding a movement from the outset, [laughs] kind of like Facebook calling itself Meta before it actually has any Metaverse, like, real business, um, other than a few Oculus sales, you're kind of signaling to everyone to, "Hey, look this way, look towards me."

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Yeah. But if, if it was actually happening, they didn't need to be branding it so aggressively at the outset. Um, so I don't know. I, I, I am a big proponent of Web3. Yeah. I think there's promise.

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I just think we need more time and evidence. Yeah. I think the details are gonna be the, the messy part.

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But I think, like, it's, to me, it's, you know, the basic themes of moving, of, of decentralization, and I understand that a lot of times people like centralization.

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That's why bundles work, and that's why Apple is the most valuable company in the world.

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But I do think that centralization has come at a cost, and I think that it stands to reason that there will be a decentralized movement. Doesn't mean that everything is gonna be- Totally... decentralized.

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Like, people can get to choose. They can have centralized experiences and decentralized experiences, and that's okay.

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But I think it's, again, I keep going back to this aligning incentives because I think when you look at the ad model, and that's why it's interesting- Mm-hmm...

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there's clearly misaligned incentives with if you're not paying, you are the product, and that's broadly true. BuzzFeed is an advertising company, right? And that leads to misaligned incentives.

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I, I always compare it to the restaurant. If you show up at a restaurant, they make food, and then you pay them for the food. It, it is totally different when you arrive at a website.

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They're scooping up data on you in order to target ads. They're seeing, like, how much you will put up with because they're gonna monetize the hell out of your attention.

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On the misaligned piece, I just was writing about local news today.

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The, um, things that proponents of government assistance is, is that there's a lot of outlets who are incentivized to put out content that's gonna help them scale so that they can make that ad revenue 'cause ads is dependent on eyeballs, and the problem with local especially is, like, local's not meant to scale.

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Local is meant for a very small community. And so I think one of the misalignments is that advertising effectiveness and quality has for so long been, uh, lined with scale and the number of uniques, right?

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The number of people. Um, how it can deliver, like, your overall return on investment even if it's not hitting a thousand bagillion people.

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And, uh, I think the hope with Web3 is you can help align the best ads and, and the new wave of ad tech too, the best ads to the right people at the right time in the right context, and then we don't have to misalign ourselves with this false premise of scale.

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We can create quality content for the right audiences, and the ads are still worth it. Circle back to Substack. This 1,000 true fans thesis is compelling, right?

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And I think there are different ways to support quality content, and there will be new ways that will arise. It doesn't have to just be ads. It doesn't have to just be subscriptions.

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Going back 10 years ago, it was all ads. The assumption was your business model had to be ads. Then there was subscription. There was a lot of different types of subscription. There was membership. There were meters.

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There was all kinds of monetization possibilities. So to me, it should lead to more resilient models, more options that, that fit your e- editorial mission- Totally... of a product.

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And, and, and to that point, like, I think just the diversification of these business models, we talk about it in terms of how they benefit the publishers, but to your point, we don't talk about it enough about how it benefits the consumer.

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Like, it gives them a totally different experience in how they're going to access content and interact with it, and that's a good thing. Yeah.

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I mean, I always think, like, the very short-lived panic over ad blocking a few years back, that was a sign. Like, the cust- like, people were signaling how disgusted they were with the misaligned incentives. Totally.

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And I think that was, like, a tell in some ways because there's a theory about it's like money laundering cr- Like, y- y- it is a way for people to actually signal their unhappiness with how they're being governed.

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So there, that actually plays a role in organizing societies. [laughs] And I think in some ways, you know, people downloading ad blockers and doing everything they can to avoi- avoid ads was a tell- Yeah... in some ways.

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Okay. So I wanna leave it there, but before I let you get back to your Idahoaning, we gotta do some kind of predictions or bold calls for the year. So give me one or two right now. Oh, wow. Um- I know.

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I didn't prepare you. No, no, that's okay. That makes it more fun.

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I think, remember we were talking about at the beginning about how there are publishers that are gonna excel in bundling search, in bundling social, in bundling, you know, tech. I'm curious as to the bundling of audio.

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Obviously, you have Spotify and the big music. There's a market for better, higher quality audio being bundled in a not massive platform like that.

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I think what The New York Times is doing with their audio app is really interesting. So one prediction is there's gonna be more of the rise of bundling audio content in a way that isn't just within the walled garden.

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This, I just think people want, like, a more niche and custom experience there.

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So that's one prediction.Another prediction is I think you're gonna see a lot more consolidation in the entertainment media side of things as the streaming wars continue on.

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You're just gonna have more competition for programming, so we'll see more of that.

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Uh, and the last prediction is that I've seen this huge rise of athletes turned celebrities who are getting involved in their own media companies, whether it's LeBron or Michael Jordan, et cetera.

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I think you're just gonna continue to see that across all verticals. So not just stars from an athletic perspective- Mm-hmm...

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but maybe stars who are really focused on food and cooking and leisure, or maybe stars that are really focused on other lifestyle services like home. You know, look at Chip and Joanna Gaines. Like, people...

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The Substack unbundling is actually happening to the unbundling of all media content, and so I think that's just gonna continue to explode in 2022.

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I think that's totally right 'cause I always go back to this shift from institutions to individuals, and I think we're still in this cycle, and I think my prediction is 2022- Mm-hmm...

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we'll see that start to morph from individuals into collectives. Like, I think collectives- Oh, yeah... that are- I agree... around individuals but are not exclusively individuals are incredibly powerful.

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And look, Axios in some ways is pulling this off on a sort of regular media company level because there's a big brand of Axios, but your brand... Sorry, I have to say it, Sarah.

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Dan Primack's a brand and so on and so forth, and I think that is an interesting model.

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Not everything's gonna be Barstool, but we're gonna see people who are gonna use their individual clout and join with like-minded people. That's a version of scale, to me.

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It is, and you know what's so interesting about it? When we built that model, it wasn't to scale brands. It was because we thought it was how we could create the best quality product.

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Like, if you combine Dan's sources with my gallon sources, with Jonathan Swan's sources, with Ben Geman's sources, you're gonna come up with an incredible scoop. And- Yeah...

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that was our goal and what we, and why we did it, was it would create the most formidable journalism product.

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And then what we found is the brand amplification thing was awesome for our business, but it actually wasn't the way... I mean, I don't want to speak on behalf of our founders. It wasn't- Sure...

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like our incentive, and I think that's why it worked. Like, if you're just collecting people, but there's no sense of how they work together and build on each other's products and make them stronger, it doesn't work.

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Like, it needs to be a collective that empowers all of the individual brands to be better, and I think you'll see more of that in 2022. Yeah.

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That's the, the sort of hopeful part of, of Web3, whether it's DAOs or whatever- [laughs]... whether DAOs are just a fancy word for an ungovernable LLC or not, I don't know. But I, I look at, like, what Puck is doing.

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To some degree, it's not a DAO, it's like a regular company, but I think that they're onto something. Full disclosure, I'm doing a little syndication with them.

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But I, I do think that they're onto something with straddling that line between an institutional brand and still having the advantages of individual brands in, in a way that improves the product. Yeah. I agree.

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Yeah, the product and the monetization sort of work together, and a lot of times that's not the case, to be honest with you. [laughs] Okay. Sarah, I'm gonna let you get back to the moose and various other fly fishing.

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You're fly fishing today, right? No. Today we're gonna... There's, I mean, there are crazy people who do fish in this weather. It was, like, zero degrees last night, but I'm not doing that, no.

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We're snowboarding and skiing and doing all that stuff. All right. Very cool. Well, enjoy your break. Thank you so much for, uh, taking a break from your break to do this podcast. Thank you for having me.

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It's always so great to speak with you, and I love your newsletter, so thanks for putting it out. Ah, same. Thank you so much. Thank you. And thank you all for, for listening this week.

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Again, if you have an opportunity and you use Apple, leave a rating and a review. I'm assured this helps people find the podcast, and it's always good for me to read. Be back next week.

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