Media used to be hard to make. Now it's only limited by imagination. And that makes things complicated.
Welcome to People vs Algorithms 26.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses, most recently as global President of Hearst Magazines, one of the largest publishers in the world.
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Among the many things we learned last week was Elon does much of his best tweeting from the can. Which does prove the point I am about to make about our state of near “full composability,” a term I've just made up, in which the line between thinking about something and making media from that idea is steadily disappearing, across all media types. Or in the case of Twitter and Elon at Ted, “I’m tweeting more or less stream of consciousness.” The composability thing has been in the back of my mind all week. But let’s get to it in a minute.
One can speculate about Musk’s plans to refactor moderation, make the algorithm public and cut staff. But amid all of the speculation about his intentions, the one I have not see much time spent on is the potential partnership between Musk’s company Neuralink and Twitter, which would of course enable a instantaneous and direct link between one’s thoughts and Tweets, eliminating the need to spend an unnatural amount of time in the bathroom. Full composability.
While the prospect of owning your own social network is no doubt exhilarating, the business logic is anything but. $43B is still a ton of money and any PE fund that lines up behind this will only do it from a privileged place in the cap table. A media platform that attracts a daily audience of 200M, including the most influential people on the planet, and does so with virtually no content costs, ought to be wildly profitable. Twitter’s problem is the ad model and the problem is existential.
Twitter is neither a successful performance ad solution, like Google and Facebook, nor an effective brand storytelling environment like Youtube or TV. The Twitter feed has contextual data signal but none of the buying intent of search. It has the scale to serve both global marketers and ROI oriented long-tail buyers but none of the must-buy inevitability of the aforementioned platforms. The truth is, advertising still sits awkwardly in its feed. Performance has lagged the category by a mile as a result.
That said, with its tech-driven cost structure, global reach and about $5B in revenue, the company has a clear path to $1B in profit. A proposed $43B valuation still implies a steep 45X EBITDA multiple. A growth multiple needs a growth plan. Where to from here?
Growing profit by evolving the ad platform is not straightforward. Twitter and a team of competent executives have been working on this for a decade. Expanding the user base is reasonable given all the attention, but efforts to enhance the onboarding and simplify the experience for regular people has mostly failed. Twitter remains a tool for a sophisticated active media user. Changing this is not trivial. Twitter ain’t gonna become TikTok.
The knee-jerk response to the revenue growth conundrum is charge users for some type of premium subscription tier. This too is not trivial for for Twitter, or any other broad reach social platform. Twitter’s core asset is its network effect. User fees that discourage usage risk undermining product reach and create openings for free competitive offerings. Platform technologies are increasingly commoditized and certainly not a moat. Even Trump can make make a Twitter. Well, almost.
Balancing reach and user revenue is a high wire act. It seems to me that opportunity may be found in creative thinking about a broad membership structure enabled by the blockchain — a solution here that offers the potential to bridge Twitter as a more civil environment for public discourse and Twitter as a better business.
My simplistic take is this. Setting aside ideas to make the feed more compelling or strategies to advance the ad offering, the social platform that does the best job of balancing free, open expression while limiting nefarious crap and spam wins. This balance is fundamental to the shift we are going through as a society. Personal accountability inside of digital spaces is not a Twitter, Facebook, TikTok or YouTube problem, it transcends everything that we do inside of a world where interactions are disconnected from the physical. One does not walk into a public place and behave with impunity for all of the obvious reasons and the fact that reputation systems and accountability are deeply ingrained into our physical lives, laws and property systems.
Everybody that participates in a digital space needs to carry the same accountability and be subject to the same laws as we hold in physical space. There’s a good chance the answer will involve a system where every authenticated user participates with some skin in the game. I believe a system akin to “staking” (a crypto term where assets are held passively for income generation) will evolve to better connect participants to the social systems in which they participate.
Imagine a scenario where authentication required connection to a digital wallet and staking of a nominal amount of a digital currency. This simple, low friction, borderless connection between a blockchain enabled and financially “staked” digital identity would serve to tighten the connection between authenticated online participant and citizen. Violations of rules and decorum would have consequences. Staking could be tied to democratic governance mechanisms, appealing in a world where algorithm mechanics are exposed to public scrutiny. Corporations and advertisers would live inside of the same system, with more at stake. I think the first platform to get this right will enjoy massive competitive advantage. Go Elon.
All of this Twitter stuff distracted me from the “full composability” thing I had originally wanted to think through with you. Here’s the bridge.
Composing is the act of assembling things into a narrative whole. It is also a term from the crypto world which describes a system in which anatomical units of code can be leveraged by the community to build new things, essentially open source thinking. Both ideas seem to work here. More broadly, “full composability” describes a world in which the act of media creation, distribution and monetization are available to all. A related concept of interactive composability suggested a world that could not only be rendered but lived in as an environment for interactive participation, like Roblox or any modern gaming environment. Sounds alot like the metaverse.
Our state of near full composability is the inevitable product of three plus decades of innovation in communication technology, in particular tools that support ubiquitous creation of sophisticated, high quality personal media. The cycle began in earnest with the popularization of personal computing and the invention of desktop publishing in the late 80’s, innovation that pulled media from its mechanical foundations. I was there, wrestling with early Apple desktops and publishing software like Aldus PageMaker.
Its astounding to consider the progression over 30 years from typesetting to digital publishing, usenet newsgroups, basic digital publishing to the emergence of a global stream of people-driven content, delivered with ever increasing immediacy and expressive fidelity — text to images, images to video, video to interactivity and next AR/VR. TikTok represents the most popular current incarnation of this progression, a platform that has as shifted personal media expression to a endless, user-created video feed of mobile self expression. While, TikTok can be seen as an algorithmic triumph, a machine that turns a vast universe of creators into a coherent consumption experience, the product’s foundation is certainly innovation in tools for accessible social video storytelling.
Look slightly further afield and image how the additional of compositional tools like AI driven Dalle-2 and gaming engines like Unreal 5 will continue to blur lines between individual and institutional media and with it, the complex social and policy implications created in a world that where personal accountability and decorum are detached from the physical foundations on which they depend today.
Dall-e 2 represents the next step in creation where words can be seamlessly translated into images. I will not focus on complex ethical questions around the technology. If you are interested in digging in here, start with this piece from the NYT. But imagine how things work when sophisticated imagery of any kind can be effortlessly rendered from words. Ask Dall-e for “a photograph of the earth being cradled by Zeus as if it were a marble,” and get this:
It’s early for sure and this seems pretty harmless. Next, think about the Dall-e capability trained on a corpus of commercial and lifestyle imagery, tied to audience metadata, optimized by machines to create fully automated, micro-segmented advertising campaigns. Pretty destabilizing for the ad industry. Imagine full AI driven visual storytelling: “Google, show me a story about how America was settled.” Think about how it might be connected to minute to minute personal communications. Or to video production. Staggering.
There are a ton of examples of democratization of creative tools, like Canva in accessible digital design, Descript in podcasting, but the most interesting and disruptive innovation is coming from the gaming world.
Just as desktop publishing (then audio and video editing) began as expensive technologies for creative professionals and have quickly become commodity offerings on every laptop and mobile phone, sophisticated gaming engines are moving from gaming studios to Hollywood to enthusiast creator storytellers. The recent release of Unreal 5, its accompanying MetaHuman engine and its connected marketplace of snap-together environmental ingredients highlight a bold new frontier of personal media creation technology.
Gaming engines are the new immersive storytelling platforms. Epic Games is working to accelerate this progression to an enthusiast market by making Unreal 5 free to creators generating less than $1M in revenue. To wit: I designed and rendered the completely fictional character above, let’s call him Dave, in less than 10 minutes. Hyper real immersive worlds, like the one pictured below can be readily assembled from asset libraries. Desktop publishing were the first to democratize the 2D document creation process. Tools like Ureal are doing the same to immersive, hyper-real, interactive 3D worlds.
Not to worry. In this world media organizations continue to exist, particularly those where coordination complexity, both in media creation and monetization still demand a structure to organize a lot of people and money against a specific goal — like a newsroom, sports broadcast or an ambitious entertainment project. Media brands will continue to offer value as a predictable lens and talent organizing construct for a long time. But the change is steady and visible in the changing media habits of the next generation.
The LA times, citing statistics from a recent Vevo/Publicis survey, suggests Gen Z spends half of their waking hours in front of screens, 7.3 vs 6.3 hours per day for Gen X. More interestingly almost half (48%) of video watched by Gen Z was made by content creators outside of the world of traditional entertainment professionals. Meanwhile, Gen X consumers’ viewing was 72% professionally produced. In short, a new generation is spending more time in front of screens watching content created by people, not institutions.
CNBC is playing in my office. Earlier this week it was wall to wall Elon. Yesterday it was Netflix. Just now Ackerman cashed out of the stock, taking a $400m loss on his position. Has CNN+, a 3 week old streaming news service run out of time? Will Apple take NFL Sunday Ticket? Why does Friday night baseball look like the interface to my iPhone? The pundits and prognosticators are out in full force. There are so many pressure points in the media world right now. And the complexity seeps into all parts of our world — commerce, politics, money. Money is next and it’s big. Blockchain removes transactional friction, eviscerates borders and increases velocity of everything. Money takes the shape of media, of pure digital energy.
Twitter / Elon is the Current Thing. Above all else, Twitters precarious position has everything to do with an underperforming business and a failure in governance. The pressure is a good thing. And what it represents is much broader. It's an important chapter in our messy media present in which we grapple with the systems and governing structure that define how we behave in our digital public spaces.
A shift from controlled, top-down, institutional structures that governed how information moves, to a fully democratized creation and consumption ecosystem puts pressure on all aspects of society. This is full composability and it’s gonna make things much more complicated.
Have a great weekend…/ Troy
Some other things:
1. Cocaine decor is the new mid-century. From Vice:
The Consumer Aesthetics Research Institute (CARI), pins it as a sugar-booger-fueled incarnation of the times-of-plenty energy that thrived in the 1980s, and describes it as "a melange of Art Deco [and] Streamline Moderne revivals that emerged mainly in the mid 1970s; and peaked in the 1980s and early 1990s,” inspired by everything from new wave and punk music to the chaos of the drug trade and Reagan-era hedonism. It’s elegant, but it’s excessive. It’s oversized decor, golden palm fronds, and glass blocks; salmon-colored carpet, and doric columns meant to display nothing more than your Parliaments and an ice cold martini.
2. People are too quick to dismiss Facebook’s Metaverse foray. The Verge on efforts to create a more accessible product connecting your eyes and arms. Mark Zuckerberg’s Augmented Reality.
3. Shein bring’s full composability to fashion, eviscerating the line between media and physical fashion, out fast-fashioning the likes of Zara and closing in on a $100B valuation. From Highsnobiety:
The Business of Fashion reports that Shein's success is largely attributed to its tech-driven approach, using AI software that plugs trending styles from social media and across the internet directly into its computers on the factory floor. When you think about it, it basically feels like an episode of Black Mirror.
4. Bird’s aren’t real. Revisiting the conspiracy-within-a-conspiracy that’s becoming a creative collective. From the Guardian:
It’s the most perfect, playful distillation of where we are in relation to the media landscape we’ve built but can’t control, and which only half of us can find our way around. It’s a made-up conspiracy theory that is just realistic enough, as conspiracies go, to convince QAnon supporters that birds aren’t real, but has just enough satirical flags that generation Z recognises immediately what is going on. It’s a conspiracy-within-a-conspiracy, a little aneurysm of reality and mockery in the bloodstream of the mad pizzagate-style theories that animate the “alt-right”.
5. Wapo shows how TikTok account inflames the right. “Meet the woman behind Libs of TikTok, secretly fueling the right’s outrage machine” :
Libs of TikTok reposts a steady stream of TikTok videos and social media posts, primarily from LGBTQ+ people, often including incendiary framing designed to generate outrage. Videos shared from the account quickly find their way to the most influential names in right-wing media. The account has emerged as a powerful force on the Internet, shaping right-wing media, impacting anti-LGBTQ+ legislation and influencing millions by posting viral videos aimed at inciting outrage among the right.
6. Owli.. A nifty tool for Reddit research.
7. Persepolis Reimagined: A really cool interactive experience accompanying the new exhibition at Getty Villa: Persa, Ancient Iran and the Classic World.
8. Love Wordle? Waffle is a fun variation:
And…a fun one from Caetano Veloso: