What Happens To Media When The Web Goes Away, with Tony Haile

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1:34Peter Kafka:From the Vox Media Podcast Network, this is Channels with Peter Kafka. That is me. I'm also chief correspondent at Business Insider. Happy Thanksgiving. Today we are talking to a channel's favorite, Tony Hale. Not the great comedic actor, but an entrepreneur who has been in and around digital media basically forever. And he's someone I like reading and talking to when I want to try to sort through some thoughts about the future of everything. And I also wanted to talk to Tony because he's working on a new thing. And from what I can tell, it doesn't have much to do with media. And my worry was that he's doing that because he doesn't see a lot of future in media.

2:15Peter Kafka:And I think that's what he says here, more or less. But wait, do not go. this is not going to be an entire bummer of an episode. First of all, Tony is charming and British, so that's going to make some of this go down easier. But also, Tony's new thing is supposed to be about the future of work. And if you squint a bit, you can imagine how his new startup, it's called Filament, might have something to do with the future of media. And that could still be a future that involves some number of human beings making things for other human beings to enjoy and consume. So listen up. Let me know what you think.

2:51Peter Kafka:Have a good holiday. Here's me talking to Tony Hale.

2:59Peter Kafka:I'm here with Tony Hale, who has been on this podcast before. He is not the other Tony Hale. He is the Tony Hale that I know through digital media. The lesser Tony Hale. Lesser Tony Hale. You can hear his mellifluous English accent there. I've known Tony for, I think, 15-ish years. He's been in and around digital media forever. I think he's out of it now. We can talk about that, but I wanted to bring him here to talk about lessons he's learned. He's got a big brain. He's got insights about how the media business is working, is no longer working. Let's do Tony's quick CV. Tony was the founding CEO of Chartbeat.

3:37Peter Kafka:If you work in digital media, you have been around Chartbeat at one point. It's a real-time dashboard for traffic when Chartbeat doesn't give you the answers you like. You curse Chartbeat in case instead of systemic parts of the media. He then created Scroll, which we spent a bunch of time trying to figure out how to describe. I've gone with ad support, ad blocking subscription service. Sure. But it was an attempt to get a bunch of different media companies to work together in a coalition to offer customers the ability to read a bunch of stuff without ads for a single price. Yeah. That got bought by Twitter?

4:14Peter Kafka:It did. It no longer exists, thanks to Elon Musk. And now Tony is building something called Filament, which as far as I can tell is not a media company. I would say it's media adjacent. Media adjacent. So we're going to talk about all of that. Filament doesn't exist yet. It's going to launch probably early next year. So we're getting kind of a preview conceptually of what that company is. But big picture, you've been in digital media for a long time. You are now, from what I can tell, not in digital media. say you're digital media adjacent should i should just be a flashing signal that says this is a guy who's been in and around media forever knows how the pipes work knows who the people are and he's like nope i don't need to do this anymore should that be a warning for the rest of us i think it's a recognition of at least like the industry is not going to survive by optimizing on the things that it has been doing thus far.

5:09Through tools like Sharpie. Through anything. I think the broader thing of we're going to have websites where you put little boxes with ads on or where you say you can't read our stuff unless you pay us, I think is going to be fundamentally challenged by the kind of interface change that we're seeing right now.

5:31Peter Kafka:And to spell it out, that's AI. Yes. So sketch out what, I think this is pretty evident to most people listening to this podcast, but sketch out what that future will look like if we're not going to websites and getting free information in exchange with ads or paying for information. What are we doing? Like I think about AI as an interface change because I think about it as akin to when we move from print to digital in that there are still print publications around. Mostly as novelties. Yeah. And we had that same fight when print and web was there. We saw web as this accretive thing first. And everyone was like, look, it's a new additional opportunity for us to go out and take opportunity.

6:14But in reality, what happened was this somewhat slow but inexorable change towards a new interface. And then the previous interface became somewhat vestigial. and what i start to wonder about as i start to see the shifts in user behavior is whether the web starts to become vestigial in the same way in that you effectively have an internet made up of three components you have the legacy internet which is now predominantly traversed by agents creating your chat GPT pulse or whatever else.

6:47Peter Kafka:Bots, most people who are reading internet sites aren't people, they're bots calling it. And then you have the very, very large platforms, social platforms that have all pivoted to entertainment, even LinkedIn. And then you have this kind of like underground of like discords and WhatsApps and slacks and private where kind of real human collaboration is happening. And for media, media has been largely focused on the first, and has tried to find ways to survive in that second area amongst the social platforms. And it feels like there are elements of King Canute about both of these areas now. Spell out what King Canute means for our audience.

7:33King Canute was the ancient English king who dragged his throne out to the waves and commanded the waves to stop. Um, people have historically thought of him as being stupid for doing that, but he was trying to make a claim to his people as like, I can say whatever the hell I like, but it doesn't change the fact that the waves keep coming. Yeah. And I think this is the thing for us is that there is this interface change coming and it doesn't matter how beautiful we make our websites if no one is thinking about going to website.

8:07Peter Kafka:The standard line, if I interview a media executive about how they're going to deal, because again, we're just talking about the idea broadly that the idea of going to a website is just not a thing that most people are going to do most of the time. Over time. The standard line from someone who runs Vox Media or anybody else, at least in public, is when dealing with this reality where, you know, you're going to get disintermediated. Large, most publishers are going to get disintermediated. The interface is going to replace them. They'll say, well, what's special about Vox.com or the New York Times or the Daily Wire, whatever it is, is people really trust that the brand means something to them.

8:47Peter Kafka:people will come to visit our site and our products because our brand does have meaning. It does stand out in a world of commodity information and of noise, and we have real trust there. And that's our future. Is any of that plausible? It reminds me of when people would talk about the reason why our paper isn't going away is because people like the visceral trust. They have a strong relationship. It's part of their morning routine. I had music executives in 1999 and 2000. People love CDs. They love holding it. They love reading the liner notes. You can't get that with an MP3. You can't put an MP3 up on your shelves and show it off to a new date.

9:28You know, all of these things, all of these lines. And it's all true to an extent. But the challenge is, like, you can create the most wonderful, like, brand-trusted place. But if the road to get there isn't really there anymore, if that user groove of behavior is fitting to exist, that's going to become a shrinking, shrinking business.

9:47Peter Kafka:That'll make sense. I think it's kind of what we're talking about day in, day out, especially on this podcast. What replaces it? I mean, that's the question. What I suspect is that you have, as I said, like these three different things, you are going to go to your AI model of choice for information and so forth. It's going to get better at doing more kind of real-time information and dealing with the news and so forth you're going to go to platforms your tiktoks your instagrams whatever it is for entertainment and then the interesting thing for me is the kind of counterculture of that which is what is the reaction against ai where you have the kind of the not the unpolished the private these kind of groups and this is where i think like journalists actually have the opportunity to grow and build something um because they have an individual imprimatur of being able to convene and bring people together you had brian morrissey talking about like the gatherings that he does yeah he can bring people together he can do something on a kind of smaller um smaller kind of higher end scale where you're like building that kind of like almost like a private network so so this this idea that people are moving from social and we could talk about why they're moving from social to private chats.

11:09Peter Kafka:Like on the one hand, that's very much a thing that people who are most immersed in tech are doing. Like they're explicitly like, we're not going to do this in public. For whatever reason, we're going to have private group chats. What is the role for a journalist in a world where so much information is being dispersed and consumed in private chat? You show up and say, well, you guys should do the private chat with me. I think an incredibly hard thing to do around these kind of private groups, private networks and so forth is the kind of journey out of first gear, getting people to actually engage and talk and getting actual value there.

11:44And I think that journalists have a unique set of skills around this where they are, some journalists, are excellent conveners. They are excellent at catalyzing conversation and bringing people together and doing what it takes to kind of like get a group moving.

12:01Peter Kafka:Right. That doesn't really need to be like, I'm sure there are some journalists, there are obviously some journalists who are good at that, but that's a pretty small subset of journalists. most journalists, what you're really describing as sort of a host and convener, which doesn't have to be a journalist. And most journalists aren't that. Yeah. Like it's a, it's a challenge of like, can these, I think the interesting thing for where the journalism come in, there's the host and convening, but there's the catalyzing of conversation. And that's where you're creating something or going out, you're talking, you're bringing something provocative, whether it's new content, something new has happened in the world and you're presenting it to a group of people.

12:33and uh it's almost like i was talking to um gina chua um who uh is i think executive editor at large at semaphore about this and then she wrote a a piece where she was talking about this in the context of clayton christensen yeah which is we had this very broad base and advertising based uh based business that got taken over by the platform so we all moved to a smaller base of subscriptions um and now we're moving up to an even smaller base of kind of like private communities and so forth. And this is what you see when you look at like, when you look at what Semaphore is saying, like Semaphore is saying, we're moving full on into events, into small groups, things.

13:11The Washington Post has brought up Washington Post Intelligence. Like, Puck is moving into this space. Like a few of these different groups, they're all trying to say, like, how do we move up into like smaller high value groups where it's not just the value of the content we create, but of the connections we can create.

13:26Peter Kafka:The content sort of generates the brand and tells you why you might want to hang out at a Semaphore event or a Semiford group chat if they do that. But it's almost like a loss leader, right? And you're moving, here's our free or nearly free or cheap information. The really good stuff is at an event or something that you need to pay us for. There's some sort of gating mechanism that has more value. And I think this is like, one of the things that I think is really interesting is, is that space important and big enough? and is it going to become bigger and more important? Right, and the real, like you mentioned Puck and Semaphore, right?

14:06Peter Kafka:Yeah, yeah. Like they are very specifically targeting Washington, D.C., because there's a lot of lobbying money slash corporate responsibility. You can get a lot of - And Hollywood and - Hollywood a little less so, right? But like they are all very D.C. focused because, you know, it's a small industry, but for them you could build a real business. And again, there's multiple companies all sort of circling that same group. presumably you can do that other places but it's very much in washington where there are people with a lot of money um who want to deploy that money to change or or affect people's opinion yeah but this is why what i think i i think a lot about like the second order effects of ai and this is where it becomes so fascinating to me when you look at the industry change at large okay and this is where we see the opportunity because we are moving from a world where everyone works inside large companies and has full-time jobs to a world where I think it's going to be increasingly a small proportion of those people are going to be that and a large proportion of people are going to be kind of independent contractors, fractional, and so forth.

15:11And you think this is either a good thing or just reality? I think it's a thing. So if you think about like, if we nerd out in history a little bit for a second, like what happened in Hollywood, okay, in the 1950s, where you had two things happen. You had a Supreme Court decision, which made them unbundle.

15:29Peter Kafka:Prior to this, basically a movie studio was basically a factory. They owned the stars, the writers, everything. They owned everything, completely vertically integrated. Down to the theaters. Down to the theaters. Everyone was on long-term contracts. They were basically full-time employees. They were all owned in there because it was a highly predictable environment. It was like, we know that we can make, people go twice a week to the movie theater. They'll watch whatever we put out there because we can force the movie theaters to do it. And so I'm just going to have a bunch of people. I can have this very, very efficient system.

15:57And then what happened was the Supreme Court said, you can't own the movie theaters anymore. And you also can't force the movie theaters to take whatever movies you put out there. And then television came up and dropped their audience by 50 % in a decade. And so you had this massive technological shift of uncertainty happening. And how did they respond? They shifted and changed. So they went from, they basically outsourced everything to independent production companies. Everyone became independent contractors and so forth. And you had this small core.

16:24Peter Kafka:And you think that is the future of most stuff? I think that we're already seeing this. If you look at what's been happening, we are at the lowest level of hiring of full-time employees in 11 years. We're at the highest level of layoffs in 20 years. It's last month in October. And it's not just everyone getting fired. It's also the increase in independent contractors. So independent contractors earning more than$100 ,000 are up 87 % over the last few years, 19 % in the last year alone. Fractional executives have doubled in the last two years. You're already seeing this transition because companies, it's not because they're like, we can now do everything with AI.

17:06They're like, AI is making everything so fucking uncertain that if I have people on as full-time employees, I'm making a bet about the future that I don't know is going to come true.

17:15Peter Kafka:And they've been wanting to not hire full-time people for a long time, right? Sure. Can we outsource this? Can these people be, you know, can the people who are looking at the worst things on Facebook, could we not employ them directly? Could we hire someone that will do that? Yeah, this almost came out as a function of like post-COVID, where we suddenly realized that if people weren't all in the same room together, then did they have to be part of the same company? So when you have that thing happen already, and now AI comes in, creates more uncertainty, pushes you towards this thing in every industry.

17:43Peter Kafka:And reduces the number of people you might need. Yeah. So in every single industry, when they've gone through this kind of change, there's been a need to have a small core and then be adaptable up and down to the needs of the moment. And the thing that's weird about AI, the difference is it's kind of hitting every white collar industry all at the same time. That's new. And so if that starts to happen, what becomes really interesting to me is you have professionals who are now not just purely living inside their one company and so forth. They're working increasingly on projects, they're stretching from small different things.

18:19That space in between companies becomes really, really important.

18:24Peter Kafka:We'll be right back with Tony Hale, but first a word from a sponsor.

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20:41Peter Kafka:And we're back. So you're talking about this cool, kind of cool is the right word, interesting, challenging, structural change in the way work is done. There's a media podcast I want to turn us back to. Who's going to make this stuff? It seems like many fewer people are going to make this stuff because one, they just won't need as many people because of AI. And two, there won't be much money to pay them for their work. That all makes sense up to the point where there's no one making interesting, new, important stuff. Right? What am I missing? That level of journalism, I honestly struggle to find a way to make money doing that.

21:21The commodity straight news. The commodity straight news.