Reddit Revolts, Media Armageddon, AI Fakes In Politics — With Sara Fischer

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1:19Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional cool-headed and nuanced format. We have a great guest for you today. Sarah Fisher is here. She is a senior media reporter at Axios and a media analyst at CNN. We have so many stories to get into. The big Reddit strike, what's happening with Google, the latest on AI. And of course, one of my favorites, are we going to end junk fees in the US? I think the time has come. Sarah, it's so great to have you on. Welcome to the show. Thanks for having me. Great to see you. Okay, why don't we start with the story of Reddit?

1:56So the company has been dealing with a large strike from many of the moderators of its subreddits. People are saying, okay, you know, maybe this is the end of Reddit as we know it. I know you've been following the story closely. What's your read on what's happening and where it goes from here? Yeah, it's a good question. Reddit is so important to culture in the US. Oftentimes when I'm Googling things and I can't find an answer to something specific, I'm going to get a Reddit thread. It's coming up in my search engine. So it's a huge part of how we get and access information and how we develop communities online.

2:29If you're somebody listening to this and you're like, well, I'm not on Reddit, chances are somebody in your life is. They have 57 million people that use that site daily. They have over 1.2 billion subreddits or like communities per topic. And at any given time, you can have over 100 ,000 of them that are active. So the fact that there's a huge blackout on Reddit is a massive story for the internet and for big tech. My read on it, Alex, is that this is going to be a pretty important cultural issue for the company. Essentially, what happened is Reddit CEO Steve Huffman said that they would start charging for back-end access to its data.

3:04And while a lot of people use that back-end access for fun, silly things like creating an app for reading Reddit threads on your phone or things like that. Why he did it is because there's a lot of other big tech rival firms that use tools to scrape Reddit's data, and then they're using that to train their AI algorithms. And so he essentially said, look, we're going to get paid if you're going to do that. Unfortunately, that sparked a huge uproar in the Reddit community. We now have thousands of Reddit, subreddit communities that have made their channels private. So essentially they are in a blackout period until they can see if the Reddit CEO will change his mind.

3:43But it does not seem like he will, Alex. And I think that's where this cultural tension is going to come about. For a long time, Reddit was not seen as this big commercial player like Meta and Google. It was seen as a community that really cared about the people who used it. And so now we're seeing this company as it approaches a potential IPO, starting to really side with its business and prioritize that potentially over some concerns from its community. Now, here's the thing I don't get. It seems like both sides, and this is such a typical fight in 2023, where you have both sides, they're basically incinerating each other, right?

4:19The moderators are destroying this platform that they know and love. And the owners of the company are trying to make a profit, but driving away so many users. I just don't really see this conflict as a very productive one. Maybe I'm seeing it wrong. Maybe there is, you know, reason for, you know, the moderators in particular want to go dark. Obviously, Reddit's a site that's gone dark in the past to try to get what it wants in terms of lobbying for specific tech regulation or against it. But this one just seems to me like it's just going to end up destroying something the moderators love and also blowing up the site for Reddit.

4:53Where am I wrong there? I don't disagree with And I think that the CEO's new announcement this week that basically members of the community can vote out their moderators, you know, kind of, again, creates that cultural tension that I think could be damaging to the business. However, one of the things that Reddit has not provided is they must have done some sort of internal audit, trying to figure out what money they could make by charging big companies in particular to be accessing this data. And it must have figured that that's a pretty big number. Remember, Alex, Reddit is an ad supported platform and we are in one of the slowest growth years for digital advertising that we've seen in history.

5:33So I can understand why a platform like Reddit, especially because, again, they are looking to go public via an IPO. They filed confidentially a year and a half ago at this point, would want to increase the revenue wheels. I don't know what the calculation is. They haven't provided those details, but I think certainly that has to do something with it. You know, you have to be making some money if you're trying to file for an IPO. Of course, like, you know, the advertising slowdown is real. I've definitely experienced that in the newsletter. Like, last year, forget about it. Like, I was selling every ad this year.

6:04I'm, like, begging and pleading advertisers to come aboard with the newsletter. There has been some discussion of, like, the thing that the moderators here are most angry about is the fact that client apps like Apollo, which is one of them, have been basically forced to shut down because operating on top of Reddit is going to be too expensive. Then you have the other uses, right? The crawling for AI training. It makes sense to charge for that. Maybe not for this tool that's made your platform so valuable like an Apollo, right? Which users want to use and actually contribute to the forum. Now, it obviously seems like Reddit still wants money from the client apps and wants to force people to their app you know if they don't if the client apps can't make it but why not carve out an exception right carve out an exception for the these client apps the apps that make reddit more usable so you're going to actually be able to thrive even though you're dealing with you know trying to find a way to make money it's a great question and it again goes back to i don't think we have all the information for all we know reddit's trying to build its own you know sort of more readable apps.

7:11And that could be part of why they don't want to give access to these clients. They have, I want to note, given some carve outs, they've said folks like researchers will still be able to get API access to their data. And researchers, by the way, the reason they would want to get access to Reddit's data is to monitor things like misinformation, cultural trends, et cetera. But they have introduced this policy, which is very blunt on the commercial side, you know, basically grouping in all of these use cases together. And to your point, Alex, we don't quite understand why. If they have information about why they're doing it, I think that would be critical.

7:44In the past few days, they started to put out more info, and they're talking a lot, I know, to their community moderators about why they're making these decisions and what sort of factors go into it. But what I haven't seen yet is the raw business case. Again, they're a private company. It's not like they need to disclose it, but I think it would help folks like you and me who are analyzing the situation and people in their community understand the rationale a little bit more. Yeah, it kind of strikes me that the CEO of Reddit, Steve Huffman, I, you know, I've heard about him, but you're really starting to see how this guy runs the company and the people who are closest to it just have this visceral hate for him.

8:21And I think that's probably like not something you're going to want to foster if you're running a forum company. Yeah. And I'll just say he's a co-founder. He's been there for so many years. This has been a breaking point. I don't think the community viscerally didn't like Steve beforehand. I know as a reporter, I found him to be very compelling and honest and open executive to work with him. But I think this is just a huge milestone in Reddit's growth, again, ahead of a potential IPO that's rubbing a lot of folks the wrong way. Well, one guy that definitely does not like Steve Huffman is Ryan Broderick, who writes this great sub stack and one of my former colleagues at BuzzFeed, but his sub stack is called Garbage Day.

8:58And he wrote a piece commenting on this that I thought was really interesting. It's called platforms don't really make sense anymore and he's talking about this idea and i think there's some truth to this that like the big broad public forums the things like the reddits the things like the facebook's and twitter's have actually declined in relevance as people have gone on and started to move into group chats uh for instance so let me read you a piece of it and i'd like to have your your perspective on it so um he says over time as more platforms appeared and consolidated actual internet real estate.

9:32We came to rely on them working together in some capacity. And though they never want to acknowledge it, these platforms have also been relying on us to give them content. Now users are revolting. Ad revenue is beginning to lag. Younger users are moving away from social networking and gravitating toward Netflix-style entertainment hubs like TikTok and Dark Social. And AI are replacing the feed interface with a chat window. So platforms are panicking because they were always middlemen. They were always marketplace. And without a market, they aren't really anything. What do you make of that? I think to an extent he's right that the social marketplace has died down.

10:08And so they all need to pivot out of being just social companies. But they found other marketplaces that are very successful. So let's look at Meta, for example. I think where you're seeing Meta lean in is that they are a marketplace that connects consumers to businesses globally and at an incredible scale. And as a result, their business opportunities being this sort of closed wall marketplace for the commerce business to consumer communication, they're leaning into that. Their business opportunities are increasing there. What are they doing? They are basically displacing call centers, you know, and making it so that you can do a lot of back end messaging relatively quickly with a lot of these businesses.

10:47So I think for them, it's not that they don't have a role to play. It's that the role that they have to play is going to have to shift into marketplace businesses that are not social, but they're more commerce and selling of goods. Or to the point that you just made about Google, it needs to be the exchange of ideas and helping to better clarify inputs and outputs through AI. I think for a company like Reddit, they're interesting because they are inherently conversations. So how do you pivot out of a closed walled garden platform that's just conversations into other things? They're experimenting.

11:22You know, they bought a video platform. They bought DubSmash. They kind of folded it into their infrastructure. And I think companies like Twitter trying to figure out the same thing, right? Twitter is experimenting much more right now with video, live streaming. How can they be more of an entertainment hub akin to a TikTok? So I agree with Ryan's premise. I definitely think the social walled garden play is probably over. You need to now become the walled garden for a marketplace of, you know, entertainment content, commerce content, etc. And I do think there's still a place for it there. Right.

11:53It's just that you can't have so many platforms do that. Like this whole idea of Twitter adding more video, like is it trying to become some sort of hybrid between Twitter, YouTube and TikTok? You eventually just kind of lose focus, don't you? You can and you do. I think where Twitter has a very interesting value proposition is it's the place you go for real time events and conversations around them. So when they're leaning into video, they're leaning into announcements. They're leaning into live feeds of sports and entertainment and award shows. They're going, I think, to lean into a lot more in this election cycle of like live announcements and things that are happening there and then all the conversation around it.

12:30So for them, I you're right. You can risk becoming distracted. I see where it works for them. But a great example of becoming too distracted is Meta. Like they recognize that the social marketplace was not going to work and they leaned into way too many things. I mean, they launched a newsletter platform for journalists. They launched a podcasting and live audios app. All that's now been shut down because now they recognize that they really need to hyper focus on what is actually working, which I think for them they're hoping is going to be this, again, the connection between consumers and business as it pertains to commerce.

13:00Yep. Year of efficiency. And by the way, with the Twitter stuff, like the fact that they're going to, you know, it's a great point that you make that they're going to focus more on announcements and something live, right? Live video, if you do it right, has been something that's compelling, although you really need to be the best of it. But the fact that they have Linda Iaccarino, who's come from NBC and is used to selling TV, that might that might help bolster it. by the way so speaking of advertising downtrends and trying to be meaningful conduits of information I was going to say this for later but it's a great moment to bring it up you tweeted an astonishing stat this week looking at how many jobs have been lost in the news business this year I mean so many right so you say the media industry has announced at least 17 ,436 job cuts so far this year and that's the highest year-to-date level of cuts on record, worse than the outset of 2020.

13:58I mean, we've definitely seen the fact that there's been cuts, you know, across my old employer and BuzzFeed News, inside Vice, inside, you know, Insider, all over the place. CNN, right? Why is this year so bad? The ad market is brutal. That's what I would mostly attribute this to. And in addition to that, you had a lot of consolidation that drove debt and i think a lot of companies are kind of looking to cuts to manage some of that um obviously you don't typically cut people to manage big swaths of debt you like divest platforms and things and big businesses but i do think some of these cuts are tied to that particularly when you look at some of the big newspaper mergers we've had a lot of cuts coming out of gannett and coming out of uh that company was merged with gatehouse same thing with lee enterprises i've been uh writing a lot about their cuts those were uh mostly, I think, earlier this year.

14:51So that's a big part of it, the ad market sort of consolidation and paying down debt related to it. I also think there's a little bit of subscription fatigue. In the Trump era, a lot of these news companies made a lot of money on subscriptions. And now you see companies and subscription revenue is down. The Washington Post had$3 million in the Trump era. Source tells me that's now down to$2.5 million. The publisher is out this week. Yeah, exactly. The publisher and CEO will be stepping down in August. So there's a lot of turbulence that's leading to cuts. But what is astonishing is what you just mentioned at the top.

15:26This is more than what we had at the outset of the pandemic. And we put so much time and attention towards how do we provide relief for the news industry? I mean, we put up PPP loans. We made news companies eligible for them and they took them. I mean, it was extraordinary how much we paid attention. And the reason I wrote that story this week is like, I don't think we've collectively been paying attention to how much the fourth estate has been crushed. If this was I saw a few people tweeting, like if this was the mining industry or if this was some sort of, you know, industrial industry, we would be panicked.

15:55But right now with the news industry, you don't see that kind of same level of moral panic at the regulatory and sort of lawmakers side, at least. Yeah, it's pretty wild. I mean, one of the things I wrote in my notes is like maybe it's design. Now, I know that's kind of facetious, but like, you know, you go to these websites, you take off your ad blocker, then they like reward you by papering over all the content with like just so many ads. It makes it impossible to read. And maybe that's an old man curmudgeon-y take on this thing. But it is interesting how the experience has degraded. You know, they've given more real estate to advertising, even as they're making less money from advertising.

16:37But we're because we both come from the business side, like you were on business side of a publisher. I was buying ads and ad tech. So we know how this thing works. But yeah, go ahead. I would just say economically, just so to be clear, the rate of growth in advertising is slowing, but it's still growing. It's decelerating, not decline. And so I think one of the challenges is not necessarily that publishers are like rapidly losing all their revenue. it's that it's not growing at the clip that they expected it to grow and as a result they have to manage their expenses so that's why i think you're seeing a lot of these cuts um to your point about a lot of publishers just jamming ads on the page we did have a big turnaround in this industry around 2018 when google said i'm not putting sending money in my referral traffic safari said this too if you don't um your ad specs don't adhere to this like coalition standards so that's why you don't have like pop-ups since that's good i think most premium web publishers they're now the advertising experience is better.

17:34However, I think where it's starting to get convoluted is we now need to inject ads into everything we do. We have ads within the middle of our events. We have ads within our live streams. We have ads within our podcasts. And so even though the experience, I think, and the web front has gotten better in the past few years, I do think consumers still feel like inundated with commercialization. Right. And by the way, like even though the ad pie is growing, it's not going to publishers, right? Like the one thriving ad business that's growing at a percentage that's, you know, reminiscent of what it was like pre-pandemic or even mid-pandemic is Amazon.

18:10So where is that growth in ad money going? Going to three places. And that's such a good point. Mostly retail. Retail is so interesting, right? Yeah. It's, you know, you have a bunch of retailers who are creating digital networks to sell ads. Name a few of them. And the Walmarts, all the grocers, you know, Kroger and Albertsons, etc. Amazon. CTV, connected television. There's a lot of momentum there. So as eyeballs move from linear television to streaming, you know, more digital streaming television ads. And then, you know, there's still obviously growth and momentum in Search and Social. Social actually and Search are growing a little bit slower than they have traditionally.

18:49And that's just due to the maturation of platforms like Google and Meta. One area where I'm looking at for a lot of growth is any app that has a consumer attention, meaning you're opening the app for a long period of time, suddenly now is a place where we put ads. So outside of retail, delivery services, Uber has a huge ads business. Instacart has a huge ads business. I think you should expect to see a lot more growth there. On that note, let's take a break. We're here with Sarah Fisher. She is the media correspondent, senior media reporter at Axios and CNN's media analyst. We're talking about Reddit.

19:27We're talking about the decline in media. But when we come back on the break, we're going to cover a few themes that we keep coming back to on this podcast. The latest in AI, Google's warning to its employees not to put any confidential information into BARD and other large language models. and then also we'll talk about the end of junk fees potentially back right after this. And we're back here on Big Technology Podcast with Sarah Fisher. She's a senior media reporter at Axios and a CNN media analyst. First half we talked a lot about current events with Reddit. There's something else that's going on which is that we are having this massive rollout of large language model-based applications and the security side is something that doesn't get discussed too often, but certainly is starting to get way more attention.

20:16And it's time to talk about it now. I mean, Google made this very interesting warning to its employees. By the way, it didn't broadcast this out. This was something that ended up being scooped by the media. And it said, be careful, pretty much, about what you put inside these large language models, things like BARD, because it's not exactly safe, right? So I'm curious, Sarah, what you think this says, first of all, about our willingness to kind of run and put all of our information inside these models, but also like what exactly is Google seeing on the other side of all of our queries? I mean, more than traditional search, if we're starting to talk to its technology like a friend.

20:52Yeah, that's a huge problem here, right? Like we're when we used to go search for things, we'd ask a question typically. Right now, when we're using ChatGPT, we are inputting more than just questions, but we are inputting the way we want these questions to be answered. And oftentimes to do that, we're inputting personal information. So, for example, you know, can you write me a college application essay? I am a girl who is 16, who has a GPA of 3.2, and I'm from suburban, you know, Wisconsin or whatever. Like now suddenly you're giving them all this personal information about you that previously in search the platform could likely infer.

21:33But now you're willingly giving it over. And so what Google essentially saying to its employees is like, please be careful when you give in your personal information, because we don't quite frankly know how this large these large language models of AI, how they're processing it, how they're saving it to be able to tap into it later to create even more sophisticated queries. Now, the challenge is, OK, if you're Google, why would you ever admit something like that? Right. You're you're rolling this out on a commercial scale. Why would you ever concede that? And I think the answer is, you know, we and Sundar Pichai has said this, they move very quickly on this because of the consumer interest.

22:10And now they're trying to balance things like safety and reliability with the commercial opportunity that's presented itself in rolling it out quickly. I think a lot of people look at this and they're alarmed and they would have said, why didn't you move slower? But the cat's already out of the back. That's the problem, right? Is it Google's fault that OpenAI has already introduced this technology and it would do the same things anyway? No. So I think that's where they're kind of stuck right now. How careful are you about the stuff that you put into these LLMs? I don't put in any personal information.

22:43And I also don't put in any information regarding my reporting. I've experimented with BARD and OpenAI, and I'm trying to figure out ways to be smarter about it. And I'll use it for small day-to-day things. I have to write, you know, my mom a quick note about what time I'm getting to the airport or something like that. Like, not pretty, you know, innocuous stuff that I don't care if somebody out there knows that I... Sarah's mom, if you're listening, you're talking to a mom. When I'm landing in, you know, Terminal C at Newark Airport, like, it's fine. But I think I'm not going to put in any sensitive information that would relate to my work or my personal life or identity, really.

23:22You won't like write like, hey, I'm going to write this story, you know, can you write it up in Axios style? Here's like a couple of bullet points. No, because like one, if it's a scoop and it's my proprietary information, I don't know what on the back there. Well, look, I mean, I definitely, I've definitely been putting the first few sentences of my stories in there. And it's been interesting to watch the way that it's evolved. I still think it's a terrible writer, both Bing and Bard and ChatGPT. I mean, that writing is like totally unusable, but maybe I should be a little bit more careful. And it is interesting.

23:56I mean, you know, the thing is, you could definitely have like people sharing like some like personal information, like I'm planning a vacation or something in this area and Google getting a chance to see it. But I think what they're really worried about, and I'm curious what you think about this, is that people are, this stuff is amazing for code. And I'm sure right now across Silicon Valley, engineers are just dumping in like trade secrets and the entire code base of really important apps and products into these large language models and asking them to, you know, refine or change that. And that's really where you can get into trouble, don't you think?

24:32Yeah, I definitely think there's a commercial risk for sure. But I think the personal identity risk is even more present because Google as an employer has a right to protect all of its employees, information, etc. And like even more damning than some of your code getting out is some of your employees' proprietary information being abused by your own technology. Like I can see class action lawsuits out the wazoo as a result of that. And I think that's a huge driving factor as well. Yeah. Did you see this week? So speaking of AI, did you see this week there was a photo of Rick DeSantis? I'm sorry, of Donald Trump kissing Dr.

25:06Fauci on the nose that was put out by the DeSantis campaign? I did. And we're following AI and politics really closely at Axios. You know, one of the things we've been in touch with the FEC, the Federal Election Commission, the FCC, the FTC, about how we regulate AI and political ads, how we regulate AI and political discourse. And it's really an uncharted territory. I think it's going to be very hard to figure out where we set boundaries ahead of the 2024 election. We've been talking about the threat of things like deep fakes for years. This feels like the election cycle where it finally becomes an issue.