The Information Space in 2025
Can legacy media find a lane? What's next for alternative media? Is chat a hack? Culture wars become class wars. The value of labor. Bonus... Anonymous Banker on retail media.
Hello rested people… Happy New Year. Here’s to healthy, prosperous and fascinating 2025.
Below are this week’s timely topics, all discussed in fascinating detail on your fav People vs Algorithm’s podcast (out this morning).
Bonus: Anonymous Banker on who buys media assets in 2025.
More goodness than a supermarket rotisserie chicken… Enjoy!/ Troy, Alex, Brian
1. Chat becomes feeds.
TROY: Think about modern media distribution as three circles 1) Search, 2) Feeds and now, 3) Chat.
Search is navigation for the open web. Search is all powerful because it directs us to all things and many of these things have commercial outcomes. Today this is the most valuable information vortex in the world.
Then you have Feeds. Feeds are curated lists of content. Curated by humans and algorithms or both. Lucky people (NYT, Netflix) own their feeds / content and offer subscription access to them. The owned-feed subscription flywheel is the preferred and most stable of media models.
Others organize feeds from many providers. Owning feed distribution is also very valuable because it amounts to owning an access point, a daily habit and the commensurate self perpetuating data position. History shows us that the feed distribution pole position only usually sustains in a digital world if the feed utility is combined with a more magnetic form of utility like communication.
Facebook became an important feed aggregator because it was also a daily communication utility. Google News/Discover is important because it is attached to the firehose of search. Prime Video is attached to Prime Shopping. Instagram and TikTok are killer feeds because they have social network scale.
We have a new growing vortex and that is chat. Today, you ask the chatbot, it does not feed you. But it could easily feed you. Quickly you have something new whose utility transcends either chat or media consumption alone. Peanut butter + chocolate.
Enterprising chat providers like Perplexity want it to feed you. In other words, they feed the AI machine questions, and the AI makes a news feed for you. The output can easily take many forms, including a surprisingly utilitarian AI podcast.
ChatGPT could easily become a feed too. And when it does it becomes increasingly important as a media distribution channel. Rest assured that novel interface variations will come for chat to make it a more accessible media starting point. This is a key trend to watch in 2025.
Closely related and probably more important… when chat edges its way into the “intent” or commercial space it takes over as the most important vortex in the world. This happens in a couple of ways. People start looking for commercial outcomes in chat (best products, travel, services, etc). Chat providers offer better connections between the query and a transaction with up-to-date information, links, paid inclusion and agents. This is a natural progression and it will start in 2025.
BRIAN: Chat still feels like a hack. The goal is to give people what they want with minimum effort. Chatting with a bot is still frustrating. It makes the human do a lot of the work because the bots aren’t yet agents. I suspect chat will become one of several interaction methods and the real magic will be in agents taking actions, not how they get their orders.
ALEX: We're seeing a new behavior emerging from chat, and it's here to stay. This is why some people call this an "interface shift" similar to that of going from desktops to phones. Chat, or the idea of a conversational interface, is very compelling once it works. You only need to try out having a conversation with OpenAI's excellent voice chat to understand the appeal. Conversations are the most intuitive way for us to interface with things and will replace a lot of the activities we do today on our phone.
Right now, the chat interface is really only able to surface information, and while that's really impressive, the next step is adding access to utility. That's what people call agents. They don't have to be able to perform magic tricks like booking an entire trip for your family; they just need to login to your NYT account and get the news, or check your email, or see if anything exciting happened on your social feeds. Just simple actions on your behalf will make the chatbots infinitely more useful. The responses won't be all text; they could themselves surface dynamic interfaces, show a map, generate a video, whatever. All these features are more or less individually available today or in the pipeline. I think that talking to your computer to get many of the things done that today require opening an app, searching, scrolling through a feed, will start becoming the norm quicker than we think.
As I said in this episode, Google is so well positioned here because of Chrome (for now), an operating system, and the underlying technology. Having an agent use the web to access content behind a paywall, or add something to your Netflix queue, etc., is going to be a really profound change, and I expect people will love it.
2. The other side of the algo.
TROY: Yes, I’ve gone into a bit of a Bob Dylan rabbit hole over the past couple of weeks. My journey has got me thinking about the vectors shaping media in 2025.
Timothee Chalamet pierced a noisy algorithmic attention barrier with an unconventional press tour to promote the new Dylan biopic “A Complete Unknown.” Perfectly matching unconventional appearances (Nardwuar, Theo Von, ESPN’s College GameDay, The Broski Report, yes.. the TC look-alike appearance) with a relatable cool-boy-next door demeanor, Chalamet became ubiquitous in my feeds. The film ends with Dylan “going electric” to the surprise and dismay of folkies in attendance at the 1965 Newport Folk Festival. Chalamet did the same with his media strategy. Takeaways:
I don’t know if there is a term for this, but there needs to be… create enough content momentum to get to the right side of the algorithm. I think Alex calls this piercing the “Meta Algorithm.” Anyway, the Information Space is deafening. Finding your way through it is a new art. When it works this is an immensely powerful new form of earned media. Chalamet’s press tour shows us what that looks like.
AI creates a new kind of active media. While driving I had a long discussion with ChatGPT (voiced by a relaxed, natural British female Dylan expert) deconstructing the lyrics of a few Dylan songs. We explored them line by line, discussed potential meanings, Dylan’s intention, critical reception, social context. Try this sometime. It’s really cool and surprisingly natural and effortless. Voice interaction will be one of the most important early AI use cases. AI is creating interesting new media modes.
Podcasting is more than podcasting. It’s become a broad new type of conversational media, both audio and video, challenging vast parts of the media spectrum beyond radio — including the traditional magazine interview, morning news shows, late night talk. Podcasting is the new default in passive consumption.
ALEX: the way to think about it is an algo ecosystem. Where everything feeds off something else. You are rewarded for generating activity in the ecosystem. It’s no longer about the one big performance or even broad media coverage, it’s about creating your own (memetic?) network.
BRIAN: The Information Space operates more like a bazaar. You need to do whatever you can to get attention. This requires a different skill set because “content creators” need to be personalities who are responsive to the algos.
Sometimes I think we go overboard that this will become the only form of media. It will not. Many people will gravitate to well-packaged media because who has time to wade into the raw information stream? New packagers will rise that act as refiners of raw information.
3. Is X the new Fox News?
BRIAN: The H1B debate gestated and played out nearly entirely on X. Mainstream news was irrelevant. Breaking news events like the terrorist attack in New Orleans chaotically play out on X. The idea of a talking head like Aaron Brown (RIP) cautioning that it’s a fluid situation is quaint. The narrative is shaped and reshaped by a new array of influencer types favored by the algorithm, until they’re not as happened to several who were penalized for their strident views.
TROY: Brian, I need you to help me understand this as our resident X crack head. Does X remain influential after Elon chased all the journalists away? Are journalists still obliged to lurk on X to source raw stuff they can’t get elsewhere? Are you suggesting we spend more time on X and to what end?
BRIAN: The journalists have been replaced with a host of strange and interesting characters who are closer to information marketers. I recommend time on X to understand the raw information feed that many will use as a complement and substitution product for packaged information products.
ALEX: I don't know if that comparison makes sense today. Vivek could have posted this on a Geocities site, and the social networks would have picked it up and run with it. Source is no longer important, and if X disappeared tomorrow, there would be plenty of ways to put a message out into the feeds in 2025.
I continue to see this all as a much more distributed system of algorithms that feed off each other. I watch plenty of TikToks on Threads, I see screenshots of Tweets on Instagram, people analyze the latest social drama on news. Being off X does not make me miss anything. I still believe that media and political types tend to validate its importance because they're addicted to it. Truth is that for the people that haven't captured a large following, the experience kind of sucks.
4. From ads to spectacle.
Troy: The world of content abundance is coming fast for filmmaking of all types. If there was any doubt, Google’s new Veo 2 AI video creation tool is quickly erasing them. The quality is nuts, physics and object permanence issues are being fixed. Acting will be hard for a long time, but many types of narrative expression will work around constraints as models and tools mature.
Example: Some guy named Jason Zada created a new studio (Secret Level) to make this stuff. Over the last couple of weeks they have given us a taste of what is coming. Check out Fade Out and The Heist.
Advertising is short and disposable. Change has been afoot in adland for a long time. 2025 will accelerate this driven by a radically new production cost structure and the structural and mindshift changes that come along with it. The 2025 Super Bowl will be the beginning of a new era.
Related… it feels like Spectacle is the new 30 second spot. Paying agencies to make and refactor AT&T spots is coming to an end. But your agency still needs to find a way for you to pierce the information space. See the Pop-Tart Bowl.
BRIAN: Put some respect on Jason. He created Elf Yourself at EVB when people made microsites.
We will hear a lot this year about AI agents. I expect the early attempts to be clunky, but the idea of having AI act as a personal assistant won’t go away. Perplexity CEO Aravind Srinivas thinks advertising will become about influencing agents and people themselves won’t be explored to it. I’m skeptical this kind of thing comes to pass. Srinivas is the latest in a long line of tech people to predict the end of advertising. A more plausible outcome is not less advertising but more as AI optimization becomes the new dark arts SEO.
ALEX: AlI think this is aligned to my theory that everything just has to break through into the algorithm ecosystem that runs our media consumption. There's going to be fierce competition for your dispersed and ever-dwindling attention.
This feels like species evolving to attract mates in competitive environments and we’re going to see brands taking more swings. Every brand is going to have to figure out how to peacock and be noticed, whether it's dancing Pop Tarts or Chalamet turning himself into a meme every time he's in front of a camera or mic. Everything is entertainment that needs to own its place in the collective algorithm.
Ironically, this is hard to predict and turn into a programmatic system. Lots of this stuff requires creativity and instinct for what works. Or maybe I'm just being optimistic and everything will get turned into a spreadsheet again in the end.
5. The 80-hour workweek and American competitiveness.
Brian: The H1B debate has kicked off another round of hand wringing Americans are falling behind. This happened with the Russians, the Japanese, the Chinese, etc. Underlying this is how precarious the path to “success” has become. The safe approaches pushed on young people are not very safe, not when middle management keeps getting whacked and young people lose confidence in the entire system.
TROY: I am confused about the economic state of a new generation and the perspective that things are really bad for many. Last week the WSJ ran a piece, “What Happens when a While Generation Never Grows Up?” Turns out things are not that bad even if it feels like they are:
“Median wages for full-time workers ages 35 to 44 are up 16% between 2000 and 2024, from $58,522 to $67,652 adjusted for inflation, according to the Labor Department. The overall wealth of 30-somethings, too, rose 66% between 1989 and 2022, according to the St. Louis Federal Reserve, from $62,000 to $103,000.”
“In many ways, this age group is in a better place financially, on average, than their parents were at this age. The problem is that they don’t seem to know it. Only 21% of adults in their 30s rated the overall economy as good or excellent last year, per the Federal Reserve, and economists say young adults are significantly more pessimistic about the future than prior generations were.”
Seems to be that coastal migration and crazy house prices are the real culprits. I grew up in a small city. We had a decent four bedroom house that was affordable by today’s standards. That house is still affordable now. We didn’t indulge in $100 brunches or $35 cocktails. There might be an answer to the problem or perceived problem. People may not want to hear it.
ALEX: The problem with statistics telling people that they technically are doing way better than their parents is that they don't matter. Doing 19% better means nothing when you look around and you're 34, sharing an apartment with three roommates, while your parents already owned a house and had three kids on a salesman's salary. There are a ton of factors at play — it's easier to compare our lives to others, social norms change, falling church attendance, etc. — not all these things are bad, but they have changed the expectations and realities of young people.
Meanwhile, the wealth gap is ever expanding and on display everywhere, there's anxiety around things like climate change and political tension, and we have a media ecosystem that thrives on scaring the crap out of people. Oh, also AI is coming to replace your jobs. And getting an education will probably ruin you unless some illness does it first. But what are you whining about? Look at this chart, things are better!
ANONYMOUS BANKER
Will Retail Media Help Fuel Media M&A This Year?
With many traditional media assets and brands either on the market or poised to hit it, the big question for the year is: Who’s buying?
There are fewer good buyers now than in the previous M&A cycle. Strategic acquirers have limited appetite or capacity to add new brands, and private equity remains hesitant due to perceived risks ranging from AI-driven disruptions and the fragmentation of consumer attention to ongoing uncertainties in advertising spend.
A deal announced in mid-December signals a potential avenue to underwrite future deals and bring with it new buyers: David’s Bridal acquiring Love Stories TV. It’s not entirely novel for an advertiser (retailer or brand) to buy or invest in a media company, but what’s different now is the underlying thesis for value creation. In this new vintage, it’s all about retail media: leveraging first-party consumer data combined with the right advertisers to increase the audience's value and resulting advertising dollars. While the price isn’t mentioned in the deal’s press release, the audience size and retail media component are the material details… Love Stories TV distributes content through both traditional and digital channels, featuring 30,000 wedding videos and shows across OTT services (reaching 20 million viewers), 8 million social subscribers, plus a podcast network.
The focus on retail media could draw certain retailers—The Home Depot, GameStop, and Dick’s Sporting Goods—to bankers’ prospective buyer’s lists. Strong retailers and adjacent operators may look to acquire media brands to drive additional engagement that can be sold via a retail media network. However, most will be price-conscious since they trade on a lower multiple themselves, and the upside of offsite retail media is still unproven (just consider the volatility of Criteo’s share price).
In addition to retailers/brands - the two best-positioned operators to take advantage of the retail media trend are Authentic Brands and Marquee Brands. They buy consumer brands and license the IP to operators to generate long-term guaranteed revenue streams. Each already owns media: Authentic has Sports Illustrated, Marquee has America’s Test Kitchen, Martha Stewart, and Emeril Lagasse. Their licensing model reduces the downside risk of owning media while allowing them the ability to stipulate specific requirements to licensees where they could carve out a % of impressions to be allocated to a retail media network.
While retail media can’t be the monetization solution for all media brands (it won’t help Graydon Carter’s process) - look for it to play a role in certain processes and expect a few unlikely retail-type buyers for 2025 to complete transactions.
Have a great week…