Data Transparency Is a Double-Edged Sword

Welcome back to the Bulwark goes to Hollywood. My name is Sunny culture editor at the Bulwark. And I’m very pleased to be joined today by Ben Dreyfus. Now, Ben, used to work at Mother Jones, who is, head of audience hack there for a long time. He’s very smart about internet economics, as it relates to journalism, at least.

I don’t know about, other parts of the internet and the economics therein. He is the author of the Calm Down Substack. I I subscribe. I quite enjoy it. And we we we have a lot to talk about today about the world of advertising online.

Ben, thank you for being on the show.

Thanks for having me, Sonny.

So the reason I wanted to get you on, was very specifically to talk about, what happened to the world of journalism and and the advertising that kind of sustained it for for a while and then not at all. Because I I I feel like we are headed into, a very weird era of TV and streaming where all of of the streamers realize that they cannot make enough money just by selling subscriptions. So they all wanna sell advertisements, which is going to lead to a variety of issues. And we’ve seen this play out in other industries before, again, mostly journalism and how that, that kind of impacted what happened to the world of magazines and newspapers and websites. So I I feel like it’s useful to get some background information here.

Yep.

Ben. Tell me about your life, as an audience acquisition a person who also, then turned the eyeballs into dollars or tried to turn eyeballs into dollars.

Right. So I got into journalism the way people normally do, which is I failed, to become a movie star. And then ended up running a Twitter account for cnet dot com. And when that is your job and you are not allowed to do anything else because you’re in your early twenties, All you can do is work on those tweets, and you can play with the language to see how you can get the links to go up and the engagement to go And if you do that long enough, you sort of learn about these things about how people read and how they engage. And then what happens once you’ve gotten very good at that is you start doing it larger on on other parts of the the organizations.

And eventually after I had tricked enough people to read, you know, reviews of Nokia phones they would never buy. I went to Mother Jones to do the exact same thing about politics. And what allows all of this to happen? Is, an incredible revolution in data about twelve years ago, where you started to just have way more, ability to track reader behavior than ever before. And that coincides with this moment where there’s also these vast increases in, you know, the number of people from social media clicking on news stories, and this total thing revolutionizes journalism.

And makes it so that you’re basically optimizing for, an audience far bigger than has ever existed for as of news consumers. But also one that is less intentional about it. And so every little key is sort of a, you know, cognitive bias trick. And, basically, I was really good at it. And then I got burned out on it, and now I write a sub stack.

Well, let’s let’s talk about how we got to that point in the first place. Because you you you you you got into this a little bit in your, in your, the the newsletter that you wrote that made me wanna talk to you about this. But what happened to the world of internet advertising that kind of, knocked the main financial pillar out of the the legs holding up journalism.

Right. So, I mean, if you twenty years ago or so, there was the original, like, Craig’s List Revolution. Craig’s List takes all these classifieds that had basically been subsidizing journalism for a hundred years. I mean, his journalism has never made money by itself. It’s always been, you know, ads for hookers in the back of the magazine, and things like that.

And then Craigslist takes all that away, and it takes out one of the legs of the stool. And then they have, you know, a huge panic attack about how the ad market is bad. The digital ad market appears, and it pays less, but it is there. And then at the same time as social media grows up, I mean, you know, makes landfall, those digital dollars all go to Facebook and Google. And so the value of every impression for those ads starts to go down.

And at the same time, what that means is you just need more of them. And so it becomes more important that you optimize right. And more important that you get as absolutely many followers as, I mean, readers as possible because each is worth increasingly less. And that just has profound changes to, like, how important it is to actually be data driven. And that, you know, justifies a whole bunch of changes to that happened to digital media.

When you were when you’re looking at, audience acquisition and getting clicks and all that sort of thing. What are the most important things for you, the data guy? Like, what do you look what’s what’s your ideal visitor to, a website that is generating revenue based on advertising.

I mean, the ideal visitor. So at the top of the funnel is what you’re getting from, you know, social media And the ideal ones are a wealthy person, which means they use an iPhone, that also has money to spend. So, I mean, lives in the United States that has, you know, clicked around a lot of other sites and and is is likely to fall for ads, which they can all track on Facebook. And then likes your, brand or your story enough to read further down into it to you know, trigger as many impressions as possible, but also the further they read into a story, the more likely they are to take a more intentional act like actually following you on social media or subscribing to your magazine or donating just like that. And so the most important, you know, reader behavior that you want, the most valuable one is someone who is a repeat viewer who reads Almost to the end.

No one reads to the end, but almost to the end.

I like that. I like that because it’s, it’s it’s absolutely true from everything know. And I know very little about audience acquisition and audience behavior. But I do know that nobody reached to the end of a anything. And this was, but this was also true In print, right?

Every time the the general rule in print, I used to work at the weekly standard, which was an actual print magazine, you know, forty two to forty eight. Pages, per per issue. And if you looked at, if you looked at audience behavior, what you found was every time you ask somebody to moved to the next page, you lost twenty percent of readers, twenty five percent of readers, something like that. That that transfers over to the world of slate, etcetera, where, like, every time you click next page, you lose forty percent of readers or or something like that. The the number of people who read to the end It has always been very small.

Right.

And I mean, you’re talking about also, like, in print where, you know, Let’s say you ran the New York Times in nineteen seventy three or something like that. There’s a couple of ways to tell how your paper is being consumed, you know, there’s your subscriber number, which is sort of not direct to any one single editorial choice, you know. It has to do with affinity built up over time. But there’s also newsstand sales. And you can look at your newsstand sales and say, like, alright, it spiked on Tuesday, and it went down on Thursday.

And that is almost entirely a function of the a one headline. You know? War breaks out in Israel, people buy that one. But one on Thursday that says, like, rain coming or some crime done in the Bronx, no one’s buying that. Because of that, it goes up and down, and you can decide you can make a lot of decisions about, like, what we should have on the front page.

This tells you absolutely nothing about eight two b one, b twelve, c twelve, d fifteen. All of those things, you can only really interpret through Some tiny focus groups or reader feedback, but mainly editorial sort of gut, you know, the feeling I sure think they’re doing it. And what the internet did with all of these tools is reveal actually, like, how much people are reading c two. The answer is, in most cases, it’s never. You know, it’s just it it it sort of takes away the illusions that you were able to project onto the readers because there was no real way of tracking it.

You know, efficiently.

Yeah. I mean, I, like, this is something I’ve always kind of wondered, and and don’t really know the answer to, but do we do we assume that the, the online readership numbers, more or less core respond to the, you know, physical hard copy numbers with with something like a newspaper. So I think in your newsletter, you you talked specifically about, like, the dance right, at the at the New York Times or the LA Times or whatever. Like, it turns out nobody’s actually reading the dance critics reviews of the new ballet or whatever on, on the web, do we then assume that also, you know, nobody’s reading it on in the in the hard copy?

I think in the beginning of all of this, no. You wouldn’t wanna make that assumption because the internet demographic was actually different than Maybe the general masses, you know, that there was a more online, younger, maybe gen x, whatever blah blah blah blah. But that’s not true anymore. You know, everyone is online now. You know, someone been logged in was probably online before he died.

Like, every everyone is online making sure. I mean, I guess he probably wasn’t. There was no but, like, You know, everybody in the world is on the internet. And so that demographic now has matched up. And I think, like, what What happens in all of these decisions?

Everyone whenever somebody succeed on one platform, that’s always one person basically at a company who owns platform, you know, and they’ll go into the meeting and sort of brag about their spike, you know, on whatever it is. And the people who own the other platforms will get a little resentful and say like, oh, well, you know. That only happened because on Facebook, they’re all idiots or on snapchat, they’re all children or whatever it is. Or they’ll say like direct mail is is, you know, different than print and new stand sales different than subscribers. What you basically have found out over the last twelve years as we’ve just gotten so much data about user behavior is that basically there are changes on the margins.

In reality, like, we’re talking about the way people read, and they actually don’t change that much. People sort of are the same wherever they go. Yeah. Like, in general, marginally, there are changes, but there’s just very little reason to actually believe that, like, if you never read anything, a ser subject on the web that you actually are interested in reading it, you know, in print. Because, like, essentially, the other key differences that in print, like you described, basically those stories, those eighteen stories, each of the stories, those are just the next you’re just flipping it over.

They’re not individually really selling themselves to you, to at least see the headline and and go that further. On the web, every story is detached from the brand. And so every story goes into your Facebook feed, and every story has to do the job of that a one headline of making you take this proactive act. And what you’re basically saying is that, you know, the intentionality is saying that people even if they were reading them before, they were reading them out of you know, laziness, and they didn’t really care. They weren’t intentionally acting on it.

Well, this is

I mean, this is really interesting to me because I am a, I I am a obsessive hard copy subscriber, of magazines. Right? I get I get the Atlantic. I get the I get New York magazine. I get I don’t actually get the New Yorker anymore.

They they charge too much for the actual print copy. So I just I have But the, but one thing I like to do when I get these is just to sit down and and I will read them back to front in in the most cursory sort of way. I will look for these stories that I actually want to read. I will read them, then I will move on to the next one. Which is not intentional but is extremely useful because it helps with discovery.

And I I I I wonder where that discovery I mean, I guess now we all kind of self curate with Twitter and our Facebook feeds or whatever. Is so the discovery comes from other people saying, hey, read this.

Yeah. And I mean, that’s exactly right. I think that, like, one of the things you lose, right, is the, you know, discovery of necessity that you have when you’re reading a print thing at a doctor’s and you have literally nothing else to do except just flip through and actually discover, wait, you know, I do I’m interested in the New York Phil harmonic, whatever it is, or like, the water crisis. On the web, you it’s curating. You’re curating.

Your friend group is curating. But also the algorithms are optimizing for your own behavior. Then so you are even subconsciously doing it. So everything that you do want, it’s giving more of that. And it’s being over time, much more shy about giving you things it thinks you want or that it considers risky.

And because if you, you know, disengage yourself, if those are negative signals that it sends the stories and all of those things. So it doesn’t wanna risk it by really giving you too much stuff that you haven’t expressed some desire in. And all of this is a vicious cycle until eventually there is nothing else, epistemic closure. Like, you’re just getting the exact same things over and over again.

Well, this is where the we’ll we’ll get to this in a second. I but I wanna I wanna just cycle back to something you just said, when you say it doesn’t wanna risk it, when you say risk it, you mean risk de engaging with Twitter or Facebook.

Yeah. Mainly, mainly all of this is Facebook. Like, to Twitter and all the other ones don’t actually drive traffic to meet news organizations. So, basically, the ninety percent of all this is the way the way the Facebook algorithm works. But, like, when you log on to Facebook, if you have done that the last twenty years, the news feed it’ll populate all of these different things, these little posts from your friends and your photos, something like that.

And I think of it like driving down a highway where each one of those is a billboard. And, you know, it’s a bill where you can click on and drive off the highway. You can pull over for necessity because you see an ad that actually says, I do need to take a piss. It it it matches up the right time with you. Then there’s billboards that you don’t care about, there are posts that you just couldn’t care less about.

But then there’s really good billboards that will make you change your plans. You know, you’re pulling off the highway to go see this amusement park because everyone has to. It’s just too beguiling. And what you don’t wanna have happen is have people pass your billboard because Facebook then will take that as A not an actual negative reaction, but they’ll take it as a sign that this is not good. That that people are looking at it and the rate goes down of click it.

And Facebook doesn’t want that to happen too much because people don’t scroll forever. Eventually, they’re gonna click off and not come back. You know, it it wants to give you things that you’re actually engaging with. And so there’s no incentive really to be risky with that because it just harms your ability to then reach those audiences again.

So the the negative the ultimate negative effect of all this, we see in I I wanna say, like, the upworthy age is kind of the the nadir of this, right, where you wind up with a bunch of engagement farming websites, that, then inspire similar behavior from essentially news outlets. Right? I mean, it’s not exactly the same. You know, the New York Times isn’t doing seventeen Disney princess characters that you remember from your childhood, but do you remember them exactly like this? Like, the but it’s but it’s similar sorts of trick and and other things.

And also, like, just the overwhelming glut of content drowns out the actual good stuff. Right?

Yeah. I mean, sometimes the good stuff does rise up, you know, that’s totally things there’s good things that go on, but, like, you’re absolutely right. That era of, upworthy in, you know, a couple of other ones like that that really were before Facebook had done anything to moderate that. You know, it’s really as pure as gullibility. You know, it’s just playing on that.

Facebook hated upworthy so much that they actually change the algorithm to hurt that that famous type of headline that they used to do. And Bulwark it was, you know, gone in eight months or whatever it was. But those other companies that you’re talking about, like, the Washington Post is a great example. When Bezos bought the Washington Post, they actually sort of really did lean into writing for web in a way that print papers really weren’t doing. The newer times especially wasn’t doing.

And, you know, the headlines got more conversational. The pieces got more you know, quick, more turnarounds, more casual, and it worked really well in terms of that. Because basically, your writing in a style that actually is more compelling to people in that medium. The New York Times has also started to do that a bit more, but they stay away. But, like, you’re absolutely right that upworthy and places like that sort of saw an insight, like people are interested in blowjobs.

And so they put out blowjobs. You know, that’s what they did. But the Washington Post, the New York Times, and all of these other places that are better than it, don’t go as far as blowjobs. That’s gonna have reputational risk. So they’re actually going to put edging out there.

You know, they’re gonna hint at the blowjob. They’re gonna somehow come identify this insight and then, like, get close to it, but not actually do it. And that’s what basically happens all of this. And it’s the thing that I think is that I think people forget the most is that, like, This has choices, has consequences for news story selection. Right?

Like, everyone knows that. You start covering things that readers want or you think they’re gonna engage with. But it also has it for the story structure and the way it’s written because the actual analytics came out about, you know, twelve years ago and really dominated this industry, show you to a very finite level, like, where people stopped reading. And what those moments look like and what you need to include so that that doesn’t happen. And editors can interpret that and hand on those notes or in some places, you know, some places show the writers themselves that data.

And you can’t see that data and not act on It’s like the arc of the covenant. If you wanna live, you have to avoid it. Like, you you you have to avert your eyes because it just informs everything that you do. And it it it it has it has just deep consequences for the way people write stories, present stories, assigned stories, all of it, because now it’s you’re so aware of what the readers want.

Yeah. And this is We’ll we’ll get to this in a minute because I I do think this is the ultimate risk for the streamers, which is and this is what you kind of wrote about in your in your newsletter that the the the Faustian bargain that comes with understanding all and knowing too much about your data and what what people want and and the risks they’re in. Before we get there though, let’s let’s, let’s talk a little more about how ads and subscriptions subscribers kind of interact with each other. Right? Because, you know, the the the the The long time assumption on print media in particular was the twenty five cents that you pay for your newspaper covers the newsprint and, the paper itself.

And that’s about it. That that that’s not how, newspapers make their money. They make their money via the advertisements, and and they that’s how they generate their revenue. But, obviously, that all changes in an online first world, which you know, emphasizes audience size rather than the number of people you can get to give you five bucks a month.

Right. So so that digital ad market was just never as strong as the print ad market. Right? Like those those things that you get to put an ad online it’s never gonna pay the what it used to pay. I mean, what it used to be for a New York Times ad.

And so it was always more important to have more eyeballs. Also, you could track I mean, to an extent, some of it is a lot of part of the data about ad impressions is fake, but there’s some data as opposed to none. And basically, those are paying certain things, but it’s not paying that much. And so all of these companies decided they needed to find other revenue streams. So you have you know, some places that do affiliate links and try to, like, get you to buy things from Amazon and stuff like, you know, CNET and Wirecutter do all that.

But then everyone’s realizing that, you know, this isn’t gonna do it. You really need to get them to subscribe to put out, you know, direct money transfers. And some places, there’s different ways of trying that, you know, paywalls and but a lot of places were terrible at that. You know, they found out that that actually people are not don’t need to subscribe to all, like, you know, the Denver post, even though they live in Philadelphia. The only places that really succeeded at that on these large scales was the times in, you know, Western Journal and all of these places that did that and Basically, it became sort of an urgent imperative to get this steady stream of income from a subscription that people are too lazy and stupid to ever cancel, like a gym membership.

And it’s like raises the floor. But it not everyone’s able to do it. That that’s the the the key part. Like, And now we’ve entered this world where the social media audiences have dropped. So the actual eyeballs have dropped.

All of this has dropped. And, you know, that’s a good thing, maybe, some people think it’s a good thing. The way it influences, like, the perverse incentives are gone, but it hasn’t been replaced with anything. You know, there’s no new way for the Idaho Statesman to really, like, become profitably in because there is no the classifieds aren’t coming back. The, like, the digital ads aren’t gonna make more sense, the audiences aren’t gonna suddenly explode.

You’re gonna need something and it hasn’t happened yet. So it’s sort of like people cheering the end of the social media revolution, but then it’s like, well, God bless.

Well, where did the audience go? Where where did the where did where did readers go? Where did the eyeballs disappear to?

I mean, journals have never made money. You know, like, it it’s never in history made any money. So the audience of news well,

that’s not that’s not entirely true. I mean, journalism actually was a fairly profitable industry Right? Back when again, the we’re talking about the before times, the — Right. — the age of, classified ads, the age when you had three broadcast Bulwark, right, or, you know, you had, local radio dominating that, that, that space. There was a time when advertising could sustain an actual viable business and hers.

These businesses made money. But the New York no. People weren’t it it was through ancillary things. You know, the audience for pure journalism for reading it, it’s just not that large. You know, like, it it’s never been enough to sustain it.

That’s why even, you know, the times and everyone else has soft news. You know, we have advice columns and, you know, all of these fun little style things. It’s because the people who actually you’re dedicated to. Reading news is just not that big. And it’s never been that big, and so you have to find other ways of sustaining it.

And so where did the audience go? It’s such an interesting question because, like, the audience to journalism that happened twelve years ago or so, ten years ago. Was just more people reading news than ever before because they were people actually trying to look at photos of their kids. But then these billboards kept getting thrown at them on Facebook, and so they ended up clicking and reading slate or ended up reading, you know, other Jones, and that was a huge conversion of, oh, my god. We’re getting people to care.

We’ve never cared. And so it’s those people, those incidental news consumers who are basically gone. And, you know, some of them stayed, but most of them left. And to the extent that those people are getting that filled. It’s just with other content on social media.

You know, all of this was flattened. They were just seeing things that were incidental to them. Now they’re seeing it you know, on TikTok and and some of that is aggregated news, so they’re still getting it. But in general, it’s just that they’re getting other types of media to fill this hole in their soul.

Yeah. I mean, that that all makes sense to me. That all makes a that all kind of sounds I I don’t I haven’t been on Facebook on a regular way in seven or eight years. I I avoid it as much as I can. But that definitely feels, right in terms of where traffic is coming from, and the idea of news just as another piece of content.

That that kind of came in front of them. Which brings me, I guess, to to you know, the the Hollywood aspect of this, of of this, which is that right now, the unions are striking, the sag and the WGA screen actors skilled, writers skilled of America. They are striking. One of the things that they want is access to more data. They want more data from Netflix so they can prove, you know, which shows are popular and who deserves to get residuals from that.

And, you, you, you argue, I think fairly persuasively that this is a terrible, terrible idea if the thing that you care about is making stuff that is good as opposed to stuff that is watched.

Yeah. I mean, The the implication, I think, of the, like, the demand to know how many people are watching your art, you know, it it it’s reasonable. It makes sense to you. Like, on an intuitive level, you’re like, yeah, of course, I wanna know how or know how I’m doing. It makes perfect sense.

But the implication I think of, like, the conspiratorial belief about why this state is being held back from them is that these numbers are huge and they would just they’re they’re trying to send, you know, less residuals. And if they showed the numbers, they would have to pay more and it would, you know, reveal all of these things. But I think that the opposite is actually true. These numbers are incredibly small. There are there are five hundred and ninety nine scripted pillows and shows made last year.

Five hundred and ninety nine. Like, I watch more television than any twelve people combined, and I could maybe name thirty, you know. Like, these other ones are so low that they can’t really be justified The budgets can’t be justified. And if they put those numbers out there, they’d be embarrassed. The executives would be embarrassed.

People would You know, investors would be mad at them for wasting all this money. The pressure for them to just do a different job would be immense, and the writers would be sad. They it would be harder to get people to do these shows, which no one’s watching, and the writers would be less enthusiastic about doing it.

Well, the other thing here is that there’s There’s kind of a an almost I I this is gonna sound dismissive. I don’t I don’t want it to, but there’s almost a lottery mentality. To a lot of the discussion that I hear, which is, you know, everyone looks at a guy like Aaron Paul, who played Jesse Pinkman on bad. And he’s on he’s on picket lane. He says, I didn’t see a penny from all of the, the, the, the reviews that breaking bad got on Netflix, you know, that that that never none of that ever showed up in my residuals.

You know, I didn’t I didn’t get I didn’t get rewarded for being in a huge massive hit on Netflix. And on the one hand, I understand the frustration there. I understand the frustration of the squid games folks who were like, you know, we had the billions of hours watched and, you know, p this is a hugely popular show all around the world, and we have made our, you know, fifteen thousand dollars or whatever, and that we’re not getting any more than that. And I underst I understand the frustration there. At the same time for every squid game or breaking bad, as you there’s a hundred shows that that are watched by virtually no one.

And my my and this is my fear that if you if you start looking at if you start breaking down, what is actually being watched and rewarding based on that, then you’re going to wind up with just much, much less stuff. You’re gonna have fewer fewer writers employed, fewer actors employed, fewer Iatsi guys employed, you know, running, you know, lighting rigs and stuff because there just there isn’t an will demand for a lot of the things that are out there.

Right. Exactly. I mean, the the thing about I think it was twenty twenty two, where the WGA actual, like, those writers took in more money than ever before, you know, it then, and they gave WJ more, what’s it called, Would would you be paying dues. Right? And it, like, that wasn’t because they were all suddenly making more money, which they obviously weren’t.

Like, some some people make a lot of money. Obviously, most of them, but there’s just more writers. You know, there’s more people making shows because there’s so many more shows than ever. And that’s not You know, doesn’t blame me much for the one person who’s looking and going like, I didn’t make any money on my streaming show. But in terms of the industry, the amount of money getting pumped into, like, writing in Hollywood.

It’s higher than ever or it was a few years ago. I guess it’s now declined a little bit. But that that’s a big deal for a lot of people And it’s also completely understandable that it’s not the key concern of any individual writer. And I I guess, like, I I I think that It makes perfect sense. When I hear those stories about breaking bad, like, that is ridiculous.

And it makes sense that, like, if the rates If they made figured out those visuals right, and they could raise the rates enough so that, you know, people are fairly compensated when they’re hits. That makes sense. It’s just that that also means the total effect, like, ninety percent of these shows, which are watched by eight people. Right.

Right. I mean, this is this is the thing is that, like, I I it’s funny. I I probably am coming across on this podcast more antagonistic to the unions that I actually am. Usually, I am very antagonistic the union as a cold blooded conservative. But I but it it this is one of the one of the few strikes where I’ve I’ve I I look at what’s happening, and I I see the studios have changed the game.

They don’t want to they don’t want to pay what, you know, they they were paying for broadcast shows or cable shows, they don’t want to get wrapped sucked into another cycle of, like, where, you know, we’re we’re gonna get we’re gonna be on the hook for payments forever for these things. And that, you know, I, like, I don’t blame the writers and the actors for being like, we need we need to be we we have created the things that have made you billions of dollars Netflix, please. Give us a small piece. Of the, you know, of the success there. I think that’s totally reasonable.

But as you say, like, there’s a lot of stuff that’s just not going to be affected by that at all. And if you really start breaking it down by what is watched, it’s gonna be I it’s gonna be a bloodbath.

Right. I mean, I I to go back to, like, the news metaphor. So when you look at a publication that is large, but also not infinitely large, So not the AP and not the New York Times. Okay. Let’s say, like, the Atlantic or a magazine, you know, of significant size but not.

When you look at the stories that that publication puts out there, You should be able to identify why that story was written. You know, the motive behind spending that resource should fall into, like, a virtuous bucket. You know, maybe they’re impact. Maybe it’s just really important journalism. Like, you’re really it’s what they talk about.

All the president’s men, this type of thing. And the other virtuous bucket is It’s not any of that. It’s not impact. It’s just a story people want. It’s I know readers want this, and so I am going to have someone make it so that it will increase the audience, perhaps, of the other virtuous bucket, you know, later on.

Then there’s other little minor ones, you know, like beat sweetening and all these things like that. But what you notice when you look at I don’t wanna name any one particular publication, but just generally online is that a lot of stories don’t fall in those buckets. A lot of stories are being produced because of muscle memory or because of, like, they sort of think they should, or because social media has created this a broadcast model where people feel a constant need to put out twelve stories a day. And no one is gonna read a bunch of those, but they just feel like they have to. And those are basically waste of time.

You know, that is a waste of an ROI for that organization to have someone spend time on a story that they know isn’t gonna push anything forward and also no one’s gonna read. Just just a waste. And what’s happened in the streaming thing is is similar. You know, there are a lot of shows that they do not actually think have a chance of breaking out. And they actually probably don’t even think they’re artistic great.

You know, they don’t think that these are just the best story in the world. And we need to put it out there so that it can win a peabody or history can you know, notice they’re just doing it because, well, other places are putting stuff out, and we need to have a steady stream of new content. And that content, they feel like there’s a ticking clock, so don’t let perfect the enemy of good. Here’s a bunch of dog shit. And that is just a huge majority of content.

And that stuff, there is no good business reason for. Like, the and that will get just absolutely leveled like, it when, you know, they’re forced to actually hand look at the data and and actually, you know, handle all of that pressure.

Yeah. Hey. This is a a thing. So I I I mentioned this to you when we were talking about doing the show. I have I one one thing that is very frustrating to me as a, as somebody who subscribes to a lot of streaming channels, and has been watching prices kind of tick up for the ad free tiers is that they are they’re the streaming companies are trying to force people into the ad subsidized bucket because they can get a higher average revenue per user if they get people to pay six bucks a month, plus the advertising revenue versus fifteen dollars a month and no advertising revenue.

Right? This is essentially why Netflix got rid of their, ten doll they got rid of their nine ninety nine tier because they they were just like, we cannot make that that’s not how we’re gonna make money. We’re gonna make money by charging a little bit less and and having ads or making people pay twenty bucks a month. But the reason they’re doing this is because the the the actual I I the way I described it to you was the dark matter. The dark matter of streaming is not, the buzzy new shows.

You know, something like succession does okay. It’s it does okay, but it is absolutely dwarfed by the big bang theory on HBO Max. Right? The the big bang theory, friends, the office, these shows are the things that are actually kind of secretly driving most of the eyeball watching, and they are not monetized properly because people don’t sign up for people don’t say I’m gonna go sign up for HBO Max because I wanna watch five hours of the Big Bang theory. Every, night.

That’s not what they do. That they they they just watch it because it happens to be there. They don’t they don’t say they very few people are like, I’m signing up for HBO Max. Or Max, whatever it’s called now, because I want to watch friends for six hours. But that’s what they do.

And the only way to actually get the to recoup the cost of the massive amounts of money that those shows cost. I mean, I think I think it Warner Brothers spent like a billion dollars on friends for two years or something like that. The only way to the only way to recoup that cost is by selling ads.

Yeah. I mean, I do think that there actually are probably a number of people who have signed up for Max just for friends. You know, like, there’s there’s some very big cases like Seinfeld maybe. You know, like, where maybe I really did do it. But you’re right that, like, a good example is suits, you know, suits.

I’ve I watched every episode of suits notes on USA because I’m an idiot. And now it suits like came on and and it’s just the most popular show on Netflix. But no one signed up for Netflix to watch suits. Okay? They didn’t even have that many people when it was actually on.

It’s just that these people go home and turn on Netflix and it was there and it was good enough. And it has a hundred and twenty episodes or something so you can watch it forever. And that is fundamentally sort of like a It’s not really what happened on cable. It’s more like a a broadcast model. Like, the famous thing about, you know, ABC, NBC, and and the broadcast channels for a long time was that they didn’t wanna make your favorite show.

They wanted to make shows that you were okay with, you know, that you would turn it on and then not change the channel and watch the next the next one and the next one because they were fine. They weren’t offensive to your sensibilities. Cable channels and particularly HBO wanted to, like, you know, make make your favorite, Joe. You had to proactively, you were gonna stay watching FX all day. So you had to, like, like, the one a lot.

And that was sort of what streaming has been for a long time that they were like, we need your favorite shows that you’ll subscribe, and then you can go off to it everyone. And what they found with these libraries with these dark content, dark matter that you’re describing, is that that might be true to an extent that people, you know, sign up for something because of house of guards or whatever it is. But then once they’re there, they actually also want the broadcast thing where they can just watch the next thing as long as it’s a good enough. And it’s hard. I think for people to sort of, like, wrap their minds around that change in intentionality that a lot of it is, it’s not they’re not seeking it out so much as they’re you know, comfortable with it.

Good enough. Mhmm.

Yeah. I mean, like, in to to bring it back to your billboard analogy, the the the billboard, once you’re done with your of succession. Right? The the billboard is watch this friends or, you know, watch this watch I mean, I I don’t know how what the overlap between succession and Big Bang theory audiences is, I would assume it’s probably not enormous. But, you know, like, yeah, maybe it’s, like, watch this episode of the Sopranos or watch Rome, you know, the I don’t know.

It’s it’s, I I I mostly just look at this and get frustrated from, my perspective a person who hates advertisements because I can just feel the inexorable push of all of us into the advertising bucket and I resent it. I really resent it.

I mean, the the problem with the advertising, like, the reason why they can even do this sort of right now is because, you know, the Hollywood ad market is is not maybe not as strong as it once was, but, like, it’s much stronger than the digital journalism ad market ever was. You know? So they’re able to Look at, like, the funnel right now for streamers is is different. It’s the ads are more valuable. Like you said, so they don’t want you to just be the paid for the most expensive version with no ads.

They want you to do this middle one that also gets ads. So it creates this other environment And, basically, as long as the ad market is really strong, that sort of makes financial sense, I get. But one thing we know for media is that you know, ad markets are in an execrable decline. You know, it’s a little it’s a little it’s it’s very dangerous to put all of your eggs in that basket.

Yeah. Well, I mean, this is, and this is the one when one area where I do kind of I disagree with you a little bit in the sense that, I do think that the advertising market for TV, for streamers, etcetera, maintains a, maintains a little more power because the The content is exclusive. Right? It’s not like the New York Times where you or the, you know, the seventeen different newspapers all publishing the same story, and you can just pick whichever one you wanna watch, there’s stuff you have to go to to watch. There is, there is something to be said for the value of video ads versus just static billboard ads.

And also, like, frankly, if you if you create a situation where they’re simply unskippable, then they are more valuable. To the advertisers. Totally.

I mean, absolutely now. I mean, eventually, they they we don’t know what the future holds, and it’s just that the a few these ads have never really been going up. But, basically, I mean, I I hundred percent agree with with all all of what you just said about and that’s sort of why Hollywood can do this right now. But one thing that this this data revolution means, like, presumably of this confidential data that let’s say peacock has. Okay?

Peacock not only knows, you know, that you watch doctor death, but not some other peacocks show that I don’t I don’t know who hit the Picachos, but if you watch, you know, a lot of other SVU or whatever it is, but they also know the exact moment that you stopped watching it. They know down to the second, and they know everything about you. They don’t know your name because it’s anonymized probably. But they know, you know, your user behavior, your length of service. You’re, a bunch of things you’ve also done on the web, and they can decide, you know, who is the most valuable user for advertisers?

Someone with money, they can blah blah blah blah blah. And they can then see when those users stopped watching. And they can optimize for those users. To the, you know, exclusion sort of of other users. And basically, you get this race to the bottom where people are actually targeting one specific type of person.

And everything begins to look alike when you are then trying to sell things for the most, you know, valuable users. And it’s just a very dangerous game where everything ends sounding like Swedish pop music. People do love Swedish pop music. Like, that is responding to a market reality. But there’s also other people who like, you know, country music and other types of things.

And those things just to get less bandwidth when the emphasis is more directly about, being able to sell the most valuable user.

Well, this and this is also I mean, this is how you end up getting a channel like discovery plus where you have fifteen different home improvement shows that are all virtually interchangeable that you can just be like, oh, well, I’m I’m done watching Flipperflop. Let’s turn on good bones, you know, it’s it’s the same sort of idea.

Yeah. A hundred percent. I mean, and and you also see it on Netflix. Right? Like, they’ll have one triple frontier will do well, and then there will be seventeen knockoffs of triple frontier.

And that’s, like, they’ve always done that. Holly was always done that. You know, there’s die hard on an oil rig — Right.

—

g or and all of that stuff, but Right. This just it’s so much more content being made, so much more money, and also so much more pressure since these companies are actually not making money right now. You know, like, the profit margins All of these studios have dropped massively as they’ve shifted to streamers. And, you know, only a few of them who didn’t make money at the moment on streaming. Yeah.

And So it just raises the, like, pressure level of all of that so that they really can’t, you know, risk more. They can’t they can’t they can’t do what artists like to do, which is, you know, try things. And the thing that I also think is sort of lost a bit is that Everyone knows that writers and actors and directors think of themselves as artists. But Hollywood executives, not all of them, but they also, like, tell themselves a nice story about how they, at least, are in the art business. You know, they’re helping artists do it.

And a lot of them are artists. You know, they they’re giving the right notes, general They aren’t selling, you know, widgets. They think of themselves in this nice way. And so that’s why they’ve still sort of avoided doing things that you would really do if you were a hundred percent trying to just like meet the audience demands. They they want to have prestige reasons.

Like Apple TV purely exists. They can go to the Academy Bulwark. Right? Like, you know, like, they’re they’re they’re they’re not making money on those shows. And when you reveal all of that data and show that people aren’t actually watching it, it just will increase the pressure for those things not to exist anymore.

It will make everything more streamlined because there needs to be more of an ROI because, actually, that’s what, like, these are companies. They need to make money. And that’s inevitable, I think. But revealing the data is just gonna hasten it.

Yeah. Yeah. I mean, I I think you’ll still end up with the know, essentially, the HBO style prestige shows because those are I mean, those are very good for audience acquisition. That is still an important angle here, but I I yeah. It’s, there’s so much stuff that’s made that it just does Bulwark.

Because also likely I think, like, you know, I subscribe to Disney Plus, but, like, which, like, I don’t have children. I I log in to Disney Plus, like, seven times a year or something. You know, and it was because of certain Marvel shows. I don’t need to watch for, like, I’m not going through the Disney catalog. Basically, I haven’t quit it because I’m lazy.

And I have a bundle with ESPN and Hulu. Yep. But if I didn’t have that bundle, I I would have done that. And I think that what a lot of these streamers have learned is that a lot of people do actually. There is churn.

You know, people will what they had to sign up for twelve of these a month. Say, oh, you know, I only watched one show on Paramount Plus and it’s not coming back for two years. I’ll turn off the the subscription And that just completely changes the entire idea of, well, we only need to have one show that you really love and you’ll just stay with us for a year because, actually, you’ll stay for six weeks and then Cancel it.

Yeah. No. The killer the killer app that’s out there that’s waiting to be made is the automatic churn app. The one that the one that, like, knows exactly what signed up for and cancels for you and brings it back when you’re when you’re ready to watch again. Like that is, that’s the thing that will end up being the most valuable

I mean, you you should copy right that one, trademark that idea. Like,

I think I I I swear I I swear I’ve seen something like it, but it really needs to be automated. It really needs to be like, alright, we’re cut me off. You’ve watched all of suits. No for Netflix for you.

I mean, yeah, Capital One should have that as like a feature on their credit card.

Alright. I always like to close these interviews by asking if there’s anything I should have asked, if there’s anything folks should know about the world of advertising and journalism, advertising, on TV, you know, audience acquisition, this is this is your this is your expertise. What what should folks know about?

I think that You’ve asked a lot of good questions. I think that, like, basically, in general, I I the Hollywood side of this, just it is going to happen no matter what. And so I don’t mean that, like, you know, there’s a reason they should really hide all these numbers forever because there’s just already increasing pressure on all of them to make money. But I think that one thing that’s sort of gets lost in the social media way a lot of this discussion goes, because the writers and the beginning type have been so good at social media. Is that, basically, it does sort of exist in a world where these companies are making money.

But these companies are actually totally fucking stupid now. Like, they have burned, like, the greatest business plan in the world in cable Bulwark. Okay? With, like, you know, affiliate fees and all of those things, and they’ve moved over to this other one that only one company has made on it yet called Netflix. And, like, these people are loot burning money and they’re fucking stupid.

And it’s just an interesting moment to have this all happen. But again, like, I I I support all the writers man’s essentially, but, like, isn’t it is true that they’re not making they’re not making a lot of money right now.

Yeah. I mean, this is this is why this is one reason why I I really liked the suggestion. I think it was sag, put out to have a third party company, somebody like, god. I forget. Parrot analytics.

Look at the look at the relative popularity of all the shows. And instead of, like, having the actual numbers of, you know, thousands, x millions, x billions of hours watched. Instead, we’re like, this show is ten times more popular than this show which itself is five times more popular than this show, and we’re gonna divide the revenue up that way. That that actually seemed like a really good compromise to me, and I don’t know why the studios didn’t jump at that. And just be like, sure.

That yeah. Third party relative ranking. Yeah. That that works for us.

Yeah. I mean, that’s an interesting idea because also, the way that they could then, I don’t know, how they would make all of this Bulwark, but, like, you know, in the NBA, there’s a set number in the collective bargaining agreement about how much revenue goes to the players. You know, like, it’s fifty one percent or forty nine percent or

whatever it

is. Obviously, the number would be much lower for Hollywood. Right. But, like, setting that number Ron DeSantis saying, like, we are going to have this pot of money from, you know, from Netflix, and it’s a percentage of it. And then that’s gonna be given up through this ranking.

That doesn’t actually say only four fucking people in Iowa watch your thing. It says, you know, four times as many people watched it. I think that like that, that sort of gets closer to an actual solution to a lot heart problems.

Yeah. No. I mean, I, like, again, I when I when I remember reading that from Sagging, like, oh, that’s actually that’s actually a very good Bulwark around for all this. You know, and and and look, obviously, there’s still stuff to negotiate there. You know, SAG’s not gonna get two percent of streaming revenue.

Because then the DGA and the WGA and I add to you’re all gonna want two percent as well, and then suddenly two percent becomes eight percent, and you’re like, well, okay. That That that doesn’t work for anyone. But, like, you know, if if the if if you’re just negotiating over a number, that should be easier to solve than if you’re negotiating over a you know, kind of existential idea of what it means to count a view.

Right. Those never get that that’s the problem with all of these things is that when when they’re arguing about philosophies. It doesn’t actually really get you close to solving, you know, the, airplane strike.

Yeah. Yeah. Alright. Ben, thanks for being on the show. I really appreciate it.

Again, the name of your sub stack is calm down.

Right. Yep. Calm down to ben dot com or just Google it.

Just Google it. That’ll that’ll get you there. Do you have any Google ads, or if you if somebody Google’s calm down, does calm down Ben come up.

No. But I I might do it right now before this goes goes live. That’s it.

Alright. Ben, thanks for being on the show. Again, my name is Sunny Bunch. I’m editor at the Bulwark, and I will be back with another episode next week of the bulwark goes to Hollywood. See you guys.