Full Transcript for Netflix in Turmoil + Derek Thompson on AI & The Antisocial Century

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There does seem to be something spookily, biologically inherent about the degree to which we want to, at the end of the day, just watch moving images.

This is Channels with Peter Kafka. That is me. I'm also chief correspondent at Business Insider. We have a fun chat for you today with Derek Thompson, the excellent writer and podcaster formerly of The Atlantic, now doing his own thing. Derek's someone who's got a real knack for writing thinky but approachable and provocative essays that travel really well on the internet.

They're also really wide -ranging. He writes a lot about AI, but he also explains why Americans don't go to dinner parties anymore and why all media eventually becomes TV. We're going to hear from him in a couple minutes. But first, as you know, because you listen to this podcast, there has been really big changes at Netflix over the past few days.

I want to talk about them. I also don't want a monologue. So we're going to bring in my producer, Rishi Rajagopalan, to bounce some ideas around. Hey, Rishi. Hey, Peter. How's it going? Good. How are you? Are you a Netflix expert? I am not a Netflix expert, but I've put in my 10 ,000 hours of watching Love is Blind. And so I feel... Perfect.

That makes you as well -informed as just about everybody else who is opining about Netflix. What's on your mind? So there's been a lot going on. In the past week, they laid off about 1 ,000 people. There's the somewhat surprise exit of Bella Bajaria, their chief content officer, along with VP of film, Doug Belgrad. Then Monday morning, their film chief, Dan Lin.

So... It's just a big, big erasing of a lot of people, including everyone in charge of content. Exactly. So there's kind of an established Netflix aesthetic and almost like a genre now, whether you mean that in a complimentary way or derogatory way. Peter Rice, he comes from Disney, Fox, has an indie film background. So I'm wondering what this means for the overall slate.

Right. And so Peter Rice is coming in as the new content officer. He's replacing Bella Bajaria, and he's going to then hire other people to do film stuff. Bella Bajaria described kind of famously in a New Yorker profile a few years back now that her aesthetic was... Her plan for Netflix was gourmet cheeseburger. So stuff that was approachable, but also kind of high -end, but not too high -end.

And that kind of shows like The Diplomat or Bridgerton. And I think that's what people think of on the positive side when they think of the Netflix aesthetic. And the negative side is just a bunch of stuff that you can't remember watching. And that maybe you half -watched while you were folding your laundry. And honestly, I don't know how much of that is going to change.

I mean, the thing about Netflix is it is a huge service. They're not going to become A24. They're not even going to become HBO. They're much bigger than HBO. So whoever comes in has to figure out how to make content that lots of people like, but also that gets people to start trying the service, because that's really the core problem for Netflix.

It's huge. It is winning the streaming war still. Something less than 2% of people churn out of Netflix. That's much, much better than its peers. The problem is it stopped growing, essentially. It's very, very slow growth. This is something that Ted Sarandos has talked about publicly. Now he'd like it to grow faster. And so the real trick is what can you bring to Netflix that will get more people to try it, both in the U .S.

and around the world? So this is a very long way of saying, I'm not really sure who's got the magic bullet. I'm not sure if that's Peter Rice. Or even if there's a, it may just be the fact that, you know, Netflix is now well over 300 million subscribers. Maybe it will, it's just going to be hard to grow the service significantly. If you were, you know, forecasting, you would say there's probably not a chance that that answer is Netflix going in on small budget, independent film, taking a shot on all these, you know, smaller filmmakers in order to try and get people in the door.

Yeah. I mean, by the way, they still do art films, right? They still do thinky, provocative stuff. They try to get Oscar award -winning movies that they spend money on, on high profile directors that have big budgets that they can't get filled somewhere else. So it's not like it's just slop. That's not their business. They make lots of stuff.

One of the frustrating things, or it must be frustrating for Netflix, I don't really care, is when people opine about, Netflix doesn't have anything. They need to be this or that. A lot of that is just someone's personal taste and someone who's got a loud microphone saying that. Lots and lots of people subscribe to Netflix and continue to subscribe to Netflix.

They're finding something to watch. The real trick is how can you move that needle? Netflix really in the last couple of years has kind of, without saying, they've acknowledged that their subscriber growth is slowing, have kind of done that. One, they've made it harder to see subscriber numbers. That's usually a tell. And what they've been saying is, don't worry so much about our subscriber numbers.

Look at our revenue per subscriber. Look at how much people are paying us, either directly or indirectly, because we're now selling ads to some of these subscribers. So we're finding ways to generate more money from each subscriber, even if we're not growing subscribers. That's been their pitch, essentially, for the last couple of years. Part of the problem is Wall Street doesn't go for that pitch right now.

The stock is down 40% over the last year. I guess the other question is, yeah, why now? So the stock price is down, but like you said, they're still a profitable company. They're still growing in revenue. Is this all just a reaction to this failed Warner acquisition? That's a really good question. I mean, the stock being down, is it partly because of the failed Warner acquisition? The market told Netflix, we do not want you to spend $80 billion to buy Warner Brothers and HBO.

And also, maybe we're kind of worried that the fact that you want to spend this money means that you have a problem. As the company that built their name on creating their own IP. Creating their own IP. Stranger Things, Squid Game, whatever. Never did acquisitions of any size, really, at all. This would be really extraordinary had they gone and done it.

But the stock was sliding down before they went and bid and eventually temporarily won that package. So I don't know. I mean, you know, it's very hard to tell. Ted Sarandos publicly has been saying, even though he sort of said, yes, I'd like us to grow faster. You know, he's gotten these questions about content mix on Netflix, and he's strongly defended it all the way up through, you know, last week when he said, oh, actually, we are going to change.

So it's hard to tell what he actually wants. It is worth pointing out that the last chief content officer built before Bella Bajaria was Ted Sarandos, and then he got elevated to co -CEO. Netflix famously has this thing called the Keeper Test, where they say, hey, you should look around and figure out who at Netflix would want to keep you in case they had.

Could they replace you with somebody better? And there's a reasonable question that if Ted Sarandos was running content, he'd be out right now. They would have swapped him in for somebody else. Kind of hard to swap yourself out if you're running the company, but it's an open question. I guess my question is, is it even possible for streaming to continue to be a growth business at this scale? Netflix pulled the ad lever.

They've pulled the podcasts and kind of watch time lever. They've become a lot more global to try and eat up much more subscribers. Is there anything else other than just constant price hikes to actually grow this business? I mean, you look at the we always talk about the streaming wars as, you know, Netflix versus Paramount versus HBO versus Disney.

I think it's becoming clear to lots of people that that is not the full extent of the streaming wars that these guys are all competing with YouTube and Reels and TikTok, which are free, which have unlimited content, which either don't pay for their content at all or don't pay nearly as much as Netflix does. That's a pretty hard business model to compete with.

And again, the Netflix is the world say, well, no, no, people can watch TikTok and YouTube and they're also going to watch our stuff, but you could only watch really one thing at a time. I guess maybe some of the zoomers have figured out how to watch multiple shows at the same time, but that's, that's a real problem. It's a problem for Netflix and it's a problem for all of the traditional streamers.

I don't know that anyone's got a good answer for it. You've seen Netflix in the last year or so try to YouTube itself a little bit by taking some podcasters that were on YouTube. I don't think that has moved the needle in any way. And it may be that streaming has sort of topped out. It's an open question. Yes or no. Will we see a TikTok scroll feed on your Netflix TV within the next year? Sure.

But why? Who cares? Right? Like it's not, the question is not, I don't think it's a question of vertical video or infinite scrolling. It's, is there stuff that you want to see or didn't know you want to see that this service can offer up to you? And again, Netflix has a very deep, wide catalog. They're very good at showing me a homepage that looks probably much different than your homepage.

So they're good at all that. But again, the platforms they're competing with have infinite content. So that's the thing that they're going up against. I don't know how you go up against infinite unless you fully change your business model and what you're doing. And I don't think Netflix is going to do that. If we're done talking about Netflix, you got any thoughts about the Nathan Fielder movie? The Nathan Fielder, Elizabeth Holmes movie? I still have not seen it.

I've not seen it. So we're going to, we're going to, we'll save that for another episode. Although I will say I tried to see it and every showing in like Brooklyn, Manhattan, every theater has been sold out for the majority of the week. I couldn't even get tickets on like, you know, three, four days out. My prediction, and I've seen the movie, I really liked it, is that outside of our blue cultural elite bubbles, that you'll be able to see this movie fairly easily in the next week or so, next couple of weeks, because it's very, very buzzy.

But it's also a three hour documentary. I think, I think people who listen to channels are going to watch it, but I, you know, I'm not sure it's going to be the, it's a giant blockbuster by documentary standards. I don't know that it's going to get people packed into the theaters outside of the Brooklyn Bay area. Pick your, pick your blue city bubble.

We'll see. It is not your global Netflix style play. It is not a gourmet cheeseburger. Richie, thanks for coming in. Now we're going to swap over and listen to me talk to Derek Thompson.

Derek Thompson, world famous podcaster, writer. Your podcast is called Plain English. Your Substack is called Derek Thompson. Indeed. You didn't want to get a fancier name. No, you know, I, when I left the Atlantic and joined Substack, I asked the folks there, should I name my Substack? And they said, no, we're telling everyone like leaving places like the Times and the Atlantic, just make it your name.

So I think like Paul Krugman, for example, is just like Paul Krugman. And so that was the official recommendation. And I felt, you know, why not go eponymous? Substack says you are the 10th most popular business newsletter writer. That's good. More important. You're one of four dudes. Barack Obama reportedly reads per CNN to keep up on AI and other tech stuff.

We get you for free. Thanks, Derek. It's great to be here. Thank you. One of the reasons it's fun to talk to you. One of the reasons it's fun to read you is you write so widely. I think if people said, what's Peter Kafka write about and podcast about, they'd be able to explain it in a couple sentences. Max, is there a through line for your work? It's all over the place.

It is all over the place. I used to say when I was at the Atlantic and people who came to the Atlantic would ask, you know, what is your beat? What is it that you do around here? What I used to say, and this was a canned line. So apologies if people feel like this is too canned. I said like some beats are like contiguous land masses and you can just identify them on the map.

It's like Australia is Australia. It's an island. It makes sense. The country is the island. My beat is a little bit more like Malaysia or Indonesia. You can't just look at like an ordinary like topographical map and be like, ah, I can see exactly where Malaysia ends and begins. You kind of need to like see where they're drawing the lines.

And that's more or less how I feel about my beat. It's an archipelago of ideas and I just decide where to draw the line based on what I think is interesting. I would say for the purpose of brevity that I am interested in three A's. I'm interested in abundance. I'm interested in artificial intelligence. And I'm interested in the phenomenon that I call the antisocial century, which is a kind of grabback category of why is life like the way it is with a particular emphasis on the decline of socializing, the rise in alone time, and how we spend our alone leisure time, which is overwhelmingly looking at short form video.

And that and yeah, that opens up until you can that could be a media criticism column, etc. Do you occasionally come across stuff and go, this is really interesting. I'm interested in it. It's not one of my three A's. I shouldn't be wedging it into what I do. You know, I really try to allow myself to just like write about whatever I want to write about.

I will say like these days I would be interested to hear you suggest ideas that you consider really interesting right now that don't in some way make contact with those three A's. So, you know, I, for example, just had a conversation this morning with a mathematician. I math was my worst subject in high school. I don't understand anything about math.

On a typical day, I would never, ever wake up thinking what I really want to write about right now is advanced math. But when OpenAI released those hundreds of papers that essentially solved or partially solved or maybe only pretended to solve all of these unsolved math problems, I really wanted to talk to someone in math about like, what is it like when the machines like take over your field? Like, are you sad? Are you happy? Thank you.

We're good here. Thanks for all the decades you spent learning about this. We're one of these. Literally, he did say, Stephen Strogatz said, mathematics has been a conversation between humans for thousands of years. We've been writing letters to each other, not just in time, but throughout time. I read Archimedes and I think that he's talking to me.

And now it's like that conversation is ending. The conversant is now a machine. And so I love that conversation that touched on all these things that have nothing to do, certainly with abundance, but was related to the way we live and obviously related to artificial intelligence. And then as you anticipated, the anti -social century, because it's about how we spend our time and about the economy that animates our downtime, that touches everything from film, television, to music and social media.

And so I find sort of cheat codes to get into all sorts of subjects by just saying, I'm interested in American time use. Right about what you're interested in is all you need to do. You're doing great. You mentioned abundance. This is also the name of a book you produced with Ezra Klein last year. If I was going to sum it up, I'd say the point of abundance is we should build more.

It's better for our country and our world. And that includes you liberals who've maybe been reluctant to build over the last few years slash decades. I wanted to ask you about that in the context of AI data centers. Those are maybe the only thing that Americans agree on right now. They hate them. They don't want them built near them. What is the abundance view on data centers? Because you could argue that people should get over their hatred of data centers and their concerns.

And this is obviously better for us if we build more of these and shut up and move on. In the same way, you would say that maybe about people who don't want low income housing built around them or something like that. Right. Does that track?

I don't see data centers and houses as being equivalent. I think data centers are houses for chips. Really, they're igloos for chips because they're very, very cold houses. A data center is an igloo for chips and a house is a house for people. And those are different things. And so while I feel incredibly passionate about removing barriers to building housing where people want to live, I would say I feel less passionate about saying we need to make sure that every AI company can cite every data center wherever it wants to build it.

I think that there are costs to an economic infrastructure project that leans so heavily into data centers that in fact, it now seems other modes of construction are being starved for resources. Jason Furman, an economist at Harvard, just published a graph showing that in the last year, while data center construction is up by more than 60%, construction of hospitals is down.

Construction of offices is down. Construction of housing is down. Construction of just about everything else that you can name, including manufacturing facilities, is down because data centers are essentially eating the economy and crowding out a lot of other investment. So do I want data center construction to stop? No, I am less anti -AI, I think, than the average person with the rest of my political portfolio, with the rest of my views on redistribution and poverty and healthcare.

I'm not as anti -AI as a lot of them are. But at the same time, I do think that a distinction has to be made between data centers, which are houses for chips, and houses, which are houses for people. And the last thing that I guess I would say here is that, you know, a part of abundance, I thought your gloss was well done. A part of abundance is saying that there are developers who want to build houses, and there's people who want to live in those houses.

And sometimes rules are getting in the way of producers and consumers who want to get together to build something. But there's something quite interesting about AI, where the people building it don't always say they want to build it. I mean, this is the AI safety moment that we're living in. Many of the people building AI at Anthropic and OpenAI and throughout the industry are incredibly fearful of what they're actually building.

They're in this Oppenheimer mode. Yeah, they're Oppenheimer mode or Leo Szilard mode. There's nothing like this in housing. Like, there's no real estate developer who's like, there's a possibility, a very high possibility, that as I'm building an apartment building, it's going to fall down and trigger a nuclear explosion that's going to wipe out the entire city.

If they did start saying that, I would have not co -written chapter one of abundance. And or maybe take away your jobs. It sounds like housing. That sounds actually quite dangerous. So I take the AI safety argument quite seriously, which suggests that we should pay just as much attention to pausing, slowing down, drawing red lines around the production of AI as we focus on just making it as easy as possible to build data centers anywhere.

So in conclusion, am I anti -data centers in the extreme? No. Do I think data centers are just like houses? Absolutely not. I think houses for people are more important to emphasize as a matter of public policy than houses for chips. It's funny because on the one hand, our tech overlords seem to be surprised about the blowback against data centers.

And that's why they're like, well, it must be a Chinese psyop or something. On the other hand, as much protest and angry council meetings as you've seen, these things are being built all over the country at a rapid clip. So just to be perverse about it, is there something the housing industry and other folks who are doing development that you would like should learn from the data center guys who actually seem to be building at a very rapid clip? Yeah.

The issue is the lesson to take is be literally the richest country in the history, richest company in the history of capitalism. And then you can build basically as much as you want to build. I mean, a really important moment in terms of understanding why the AI infrastructure project is happening when it's happening, and you understand this as well as anybody, is that the companies building this stuff, including Alphabet and Meta, NVIDIA, Microsoft, these are among the richest, most profitable companies in the history of capitalism.

They have an enormous amount of money to spend. And lo and behold, here they are spending it. And so when you think about a typical housing developer, I think most Americans can't even name the biggest housing companies in the country like Lenar. I mean, these are relatively minuscule companies. Construction doesn't scale the same way that software scales.

And so, you know, it's a cheeky question that you ask, you know, what's the lesson that construction companies can learn? You know, maybe one real lesson is there are benefits to scaling. You know, the abundance folks, and we don't have to get all the way into this, but like the abundance folks had a little bit of a fight with the antitrust folks about whether our message was right for the moment.

We can name the biggest banks. We can name the biggest software companies. We can name the biggest fast food and beverage companies. What's the biggest construction company, home building company? Most Americans can't even name it. That's a function of the fact that this is a very distributed and disaggregated part of the economy that has not been become very efficient.

And I think it is absolutely possible that if we had larger home building companies, we might have home building might be in a stronger position to withstand high interest rate environments like we've seen today. And we'll be able to just write checks to people as Meta is essentially doing in Louisiana where teachers are going to get $50 ,000 bonuses.

We'll be right back with Derek Thompson, but first this.

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And we're back. Speaking of antisocial, a great piece you did along those lines recently. I think I've got the headline here. You probably remember it. Everybody's home. No one's coming over. Did I get the headline right? The headline ended up being something like, you are no longer invited to dinner, I think. But yeah, but the thesis is best expressed by the koan, everybody's home, no one's coming over.

So you're sharding the decline of socialization, specifically having people over to your house, going to someone's house. If I didn't read the story, if I just saw the headline, I'd go, oh, I know what the answer is. It's screens. We're not socializing because of screens. Because we have great TVs and because we have phones. And you do conclude that's part of the reason, but not all of it.

So I was surprised. Why aren't phones and televisions the main thing driving people to be hermits? They might be the main thing driving people to be hermits. Let's be clear. I think Robert Putnam, when he wrote Bowling Alone, said that television might be as strong a force as any in terms of the decline of socialization and the decline of social capital in the 20th century.

In many ways, as I wrote in an essay last year called Everything is Television. That's coming up next. Everything is television. Okay, coming up next. Everything is television. The smartphone is television. We don't use it to connect to people so often on social media or Instagram as much as we watch short -form video of our favorite influencers and whatever else comes over the transom.

So part of it, I do think, is that television, broadly defined, has just gotten so damn good. And when I say broadly defined, I mean TikTok has gotten too damn good and reels and everything else. That's part of it. But the macroeconomic explanations that don't touch on TV and smartphones, I think, are just as interesting and plausible and worth thinking about.

One is that in the heyday of the dinner party, the cocktail party, the 1950s, one of two parents tended to not work. Women weren't working. Labor force participation among adult women was something like 20 or 30 percent. Now it's like 60 percent.

So women not working had lots of time to plan the family social calendar. That's why all the sitcom plots about, oh, my boss is coming over for dinner. My wife has to make us a perfect meal. And if she doesn't, we're in big trouble. Yeah, exactly. Half the Lucy plots were that. Yeah, I haven't seen Lucy in a long enough time. But I will trust you that that's half of the plots.

And, you know, sometimes they did it out of a sense of, you know, wanting to impress their husband's boss. Maybe it came out of a sense of crushing isolation. A lot of my favorite books are books from the 1950s about the crushing isolation of stay -at -home parenthood. And I do think that one thing that happened is that as women went into the workforce, which, to be exquisitely clear, is something I support, there wasn't anyone whose job, whose main job title included planning family gatherings and inviting people over for dinner.

Men, you could say, didn't pick up the slack of planning the family social calendar. And I think that's a huge reason why hosting and entertaining at home has declined. Some people said, oh, it's because we don't have space. I do think it's important to say the average home size has increased significantly in the last 70 years. I mean, just look at the pictures of the typical house in the 1950s, significantly smaller.

So I don't think it's that. Some people said, oh, you know, we have less leisure time. It's not entirely clear to me that we do.

Maybe people who didn't have a formal job had less leisure time, like I said in my last answer. But average hours worked for salaried employees. It's actually declined since the 1950s. So I think we do have a lot of leisure time. We just use it in different ways. If you're a parent, you spend much more time on average with your children. Intensive parenting has screamed upward.

And as a result, I think that means we have so much time that we spend protecting our children, caring for our children, driving them to the 13th extracurricular activity, that there's less time to have that dinner party. And then finally, I do just think that we live in an age of slightly increased social anxiety. I think that people find small talk more painful than they used to.

And I think they find it harder to make adult and keep adult friendships than they used to. And I have a variety of theories about that. But I do think that there's an element there that's important. Do you think this is something where there's a pendulum swing at some point? Or do you think this is just sort of a permanent trend slash equilibrium that we're at, where we're not going to suddenly start inviting people over for dinner? To oversimplify horrifically, I think technology tends to move in lines and culture tends to move in cycles.

So like software chips just get more and more and more efficient. Computers just get better and better and better.

Television sets get cheaper and cheaper. That's technology. Technology is straight lines. Culture is sign curves. Cool jeans are skinny. No, they're loose. The waste should be high. The waste should be low, et cetera. So the question is, is what I'm calling the antisocial century a technological phenomenon or a cultural one? If it is mostly a technological phenomenon, then it's hard to imagine there being an end to this.

Phones are just going to get better. Algorithms will just get better. TikTok's not going to get worse in 2028 suddenly for whatever reason, unless the presidential candidates are like, truly, horrifically boring. And that's just like all the people see on TikTok.

But I do think a lot of this is culture, and culture can change. We had a huge upswing in social togetherness and social capital in the first half of the 20th century after an age of relative individualism, and then we lost it. So we sort of went from low to high to low. I guess my optimism takes the following shape.

To get people to stop smoking, you needed information. You needed the fact that smoking was bad for our lungs. Followed by cultural rules, like you can't advertise on certain shows. Followed by national laws that said that these cigarette packs needed to have these skull and bones emblems or whatever. And so similarly, I think that I see my job as kind of just performing the first step information role.

My job is to just tell people, this is happening. Life has changed. The 21st century is nothing like previous centuries when it comes to socialization and the experience of our time. And it's frankly up to my readers if they're embarrassed by that or want to change. If they're happy by not having dinner parties, then they're just not going to do it.

Abundance was literally prescriptive. You're telling me what you think they should do. But most of your stuff is like, here's what's happening. You mentioned everything is TV. This is the one Derek Thompson piece that I'm really envious of because I think, oh, I could have fucking write that. But Derek got there first. I was always on a thing about I thought the main the main leap of TikTok was not that it was vertical video.

It's that it's endless video for free. And anyway, so you wrote this piece last year talking about this move, inexorable move. Everything is becoming video, as you pointed out. It seems more accurate now, a year later. Anything you want to revisit that you didn't get in that column? Anyone who's listening to this should be reading that column.

Yeah. So the the column was I think sometimes. The pieces that I do that do the best, which is to say that are most read or most shared or whatever, they tend to be me.

Saving having a couple observations of the world that I sort of like put into Apple notes. And then at like 3 a .m. in the morning, I think, oh, those are all the same idea. So like abundance to a certain extent was that it started with an observation about scarcity in covid equipment like tests and vaccines. And then I connected that to scarcity and housing and then scarcity and clean energy.

And I was like, oh, OK, these are all actually the same story. The story is manufactured scarcities that we can solve with an abundance agenda. And so similarly here, this was three totally different stories. This was the ringer Spotify coming to me saying, Derek, you host a podcast right now. It's not video. It should be video. Everything's going to video.

And then me thinking, huh. So you're saying like I need to like think about my show is television. And then it was me reading a brief that I believe Facebook filed in a lawsuit, an antitrust lawsuit, where they said, you know, we're not a social media company. We can't be a social media monopoly because the vast majority of people on Instagram aren't connecting with friends.

They're spending almost all their time watching footage from other people. So that's not social at all. And I thought, aha, Instagram, according to Instagram, is television. Yes. And then I think it was open AI was like trying to launch, was it like Sora? It ended up not being much of anything. But then I thought, wow, like even the organization trying to build God is busying itself trying to build television.

You know, sometimes I don't get it right. I read a lot of things where I look back a year later and I'm like, Jesus Christ, I hope the internet burns down and no one ever finds that article. I think I basically got this right. But I am open to the idea if someone had a really, really good counterpoint, I'd be interested to hear it. This is not a counterpoint, but it's a question.

You sort of describe this as sort of like this is the inexorable way that things evolve, the way you were just describing it. But you're also just saying literally one of the reasons I started becoming a video podcaster is my employer slash business partner said, we're in the video business now. You should do it. But isn't a lot of this about sort of platform incentives and capitalism in that they've, as long as I've been writing about media and tech, all the people who run media and tech companies want to be in the television business because that's where the money is, because that's where an $80 billion pot of advertising and subscription money could be available to

them. How much of it is that versus this is what people naturally want? My theory is that it's corporate incentives because it's what people want. Companies have attempted pivoting to video infinity times. And you understand the history of pivot to video better than I do. But certainly the fact that some pivots to video became a joke, like a literal laugh line in news media.

But other pivots to video, especially in the last few years, have essentially become the norm. Like everyone has like everyone's podcast, like goes to YouTube now or Spotify or, or Netflix suggest to me that the instinct to pivot to video reflected a reasonable corporate interpretation of an underlying consumer reality that at the end of the day, what most people want to do with most of their time is sit on a comfortable couch or chair and look at moving images.

I just think that's true. I think there is, I've written about this in various ways, but never to my satisfaction. There does seem to be something spookily, biologically inherent about the degree to which we want to, at the end of the day, just watch moving images. Like the television, it's incredible. If you, if you look at like adoption rates of various technologies in the 20th century, a lot of them were very slow.

Microwave, I think telephone took like 70 years to go to 50% adoption rate and then did in the 1870s. Didn't really hit 50% adoption rate until like the 1930s or 40s. Television went from zero to 50% adoption rate in like a decade. Like there was something about the TV when it was good enough. And when TV shows were good enough, we're like half of the country was like instantly mesmerized, instantly mesmerized.

And so there, there is just something true with a capital T about the, about the success, about the media success of a technology that allows us to do nothing, but turn our minds into a receiver for moving images. I'm not saying that's good. I'm just saying that apparently is the situation. This is my, this is something I always bring up when you hear a tech person.

It's always a tech person, Silicon Valley saying, well, we need to move away from phones and people don't want to be tied to their phones. We need to break phone addiction. I'm like, I don't know if you guys have ever been in a room or a bus or a subway or anywhere. There's more than two people. They're all just fucking looking at their screens.

They do not want to be separated from their phones. They did not want less screen time. I do think the podcast one's a pretty interesting fulcrum because it could go either way. Right. Because either there is huge demand to watch white people talk to each other on microphone, or actually most people are still consuming it in audio form and it is being delivered through video.

That's one of the things you often hear about like Joe Rogan. No, no one's watching a three hour Joe Rogan thing. We don't know. They're watching clips. They're watching clips, which is different. And there's a whole other industrial debate about that, right? Like who does that actually benefit? Does it benefit the podcaster or does it benefit the platform? I'll be right back with Derek Thompson.

But first, a word from a sponsor. I'm Seth Matlins. And on this week's episode of Create or Destroy Reimagining Marketing, my guest is Starbucks Global Chief Brand Officer, Tressie Lieberman, who was hired after the company's drift from its core values and core experience led to a 38% drop in its stock price and who spent the time since rebuilding what this drift cost them and their customers.

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And we're back. You wrote about sports, which is something you dip into periodically. It's always very entertaining when you do it. You had a piece about why the billionaire sports ownership is quote, a cavalcade of bullshit. And this is, it's an argument people have made before, right? Which is, these are cartels. It's basically socialism.

We treat these, we treat pro sports in a way we don't treat any other big business here. And you do a very convincing job of explaining it. My question is, if you're a regular consumer and you love watching sports, should you care about the underlying economic structure? Nope. Okay. No. Um, you should not care about the underlying structure of sports in order to understand sports.

Um, here's the thing that's not fair. You can like Microsoft or hate Microsoft as a company, like meta or hate meta as a company, but it's worth a trillion dollars. It used to be worth only 50, a hundred billion dollars or less. And you as an individual had the right to buy a stock in this extraordinary behemoth of a corporate entity and watch that stock gain in value and become rich because of your participation in its appreciation assets that mostly only go up, like say the entire S P 500, right over a sort of decade by decade basis, I think should have relatively democratic access that people, ordinary individuals can benefit from that appreciation.

Sports teams are different. They seem to be in the last few decades, an asset whose value only goes up basketball teams, football teams, now WNBA teams, baseball teams. If you look at the value of these assets over decade by decade basis, they basically only go up, but unlike Microsoft or meta or alphabet or anything, anything else you can, you know, buy a stock in the S P 500, it is not possible for you, Peter or me, Derek, to benefit in the relatively inevitable appreciation of these assets at all.

And I have the green Bay Packers, the green Bay Packers, the only example where you can have a share of the Packers, which is, which never trade. Right.

And so the only way that you can actually participate in this market, this market that can only make you richer, it seems, is to have already been a multi -billionaire. Like it just seems unfair in a democratic society that we have a golden ticket that we've manufactured. And that golden ticket is created in such a way that, you know, if you're a basketball team, you can't make more basketball teams.

Um, the, the value of the players is capped because we make it illegal to pay LeBron James a hundred million dollars a year. Um, we have all of these rules that help asset prices only go up. Um, once the, uh, once the owners buy the teams, they can charge whatever they want for a ticket. So even if something that was cartelized, allow them to buy the asset, they can discharge the asset or make money from that asset.

However they want, it just seems unfair that there's no way for any individual to get in on that. And there, there isn't, you can play fantasy football. It doesn't make you rich. You can bet on fan duel or draft Kings. It's very unlikely to make you rich. You can watch the game, but you're probably paying for a cable or whatever the equivalent is, YouTube TV, Hulu, something else, um, red zone in order to actually access that.

So it can only take money from you in order to be a fan. It just seems unfair that we've created a golden ticket that can only go up, but only billionaires can buy it. That just doesn't seem right. The only workaround is, is, is to be part of a petro state, which is the only competition for billionaires and those guys buy soccer teams. And, and then the billionaires go, we can't really compete with, with these petro states.

It's very unfair. Right. It's, it's, it's an asset that is actually so expensive that ordinary billionaires, so to speak, you know, um, bit of an oxymoron, ordinary billionaires can't afford it. They have to get money from private equity, from insurance schemes as Mark Walter did, um, or petro states. I mean, let's just, I, I just, I just think, I think it would be nice if I could just like buy like some part of just invest in Liverpool.

Yeah. I just, I, I, I just, I just feel like that would be, that would be nice. It would, it would be nice if, if the unbelievable appreciation of these assets could make, you know, more than three people in the world rich. Let's call Josh Kostner and see if he's willing to cut us in on a secondary offer. Yeah. Right. Yeah. Let's see if Josh wants to take, uh, the LA Lakers public.

I mentioned your sub stack adventure. You left the Atlantic more than a year ago, a little more than a year ago. Uh, yeah. In the summer of 25. Um, steady stream of people like you coming on this podcast who had prestigious jobs at big, fancy publications and are doing their own thing. So I don't have to belabor it, but I'm curious. I think if I'm reading sub stacks markers, correct, you have be somewhere between two and 10 ,000 paid subscribers, um, two and 10 is correct.

And you wrote that you're at least equaling what you're making at the Atlantic so far. So that's all good. How has it changed your actual work? Like how you work or what you make? When you go from being a salaried employee, where you make one amount of money all year, no matter what, to a sub stack employee or self employed person where the line goes up, the harder you work, it's very hard to ignore that signal and not work harder.

Um, and I'm not saying that just as like, as, as, as an inherent good. Um, I feel more harried about work than I did. Um, because when that line doesn't go up, when it starts to slip, when, uh, 12 months has elapsed since a big article I wrote last year. And because of the nature, um, of people cycling in and out of the subscribers, you know, 10 to 20% of them are going to drop out of the list.

You know, it's, it, it sucks to see any number go down. And then I start to think, God, I gotta, I gotta work harder. I gotta get at that next article to make it, to make the, the, the, um, the revenue line go back up. So there's just something inherent about, um, something about the logic of lines where the line of being a salaried employee is, uh, at least on an annual basis flat.

And the line of being a sub stack employee is one that you hope to, to make go up. Um, and so it's, it's motivating in that way, but maybe not entirely in a positive way. And that feedback loop, do you, do you feel like you're more inclined to go, Oh, that story about, about my sports billionaires suck that did well. Let's do more of those in a way that you might've been insulated from the Atlantic.

Yeah. Yeah. There's no question. Um, and again, this is not something that I think is all altogether good. I think I put it this way in my in like my one year retrospective. I said one thing that I've learned from a year on Substack is that it's it's dimes for analysis, dollars for facts and Benjamins for facts about artificial intelligence.

And that's just true. And I'm as human as the next guy and recognizing that it's dimes for social analysis and Benjamins for AI analysis. There is a part of me that a part of the job that pulls me toward writing more about AI than I might. The market wants it. The market clearly wants it. That said, I do think artificial intelligence is not only the most important, but also most interesting story in the world.

And I know that a lot of people disagree, but like it touches so much that I'm interested in. It touches our day to day experience, our phenomenological experience of life, more people in our in conversation with a piece of silicon that lives in a data center in Loudoun County that they employ as as if it's an assistant and even sometimes form a kind of parasocial relationship with.

That's fucking weird and interesting. It's changing education by creating a crisis around cheating and learning and severing the connection between what can be presented as an essay as proof of a knowledge and actual knowledge held in the head of the person who hands that essay to the teacher. That's interesting. How does education go forward? It's completely reshaping the economy.

I do think that sometimes it's like, I have this long list of like, essentially like social essays that I want to write stuff like everything is television. Um, and I, uh, but I know that if I only write those essays for a month, if I only write those essays for a year, um, the line's going to go down. And so, um, I'm interested in AI and fortunately the AI stuff sells.

And so sometimes the way that I guess I think of it is like the AI reporting that I do creates a kind of a zone of extraordinary comfort for me to spend time writing stories that I know won't make money, but I think can be really, really broadly read as social analysis. It's just like the people who pay for the next marginal substack just tend to not spend like a hundred dollars on like essays about like, uh, uh, media theory, unfortunately.

And one last sort of mechanics question, um, kind of taps from what we were talking about before you started as a words guy and then you added audio and now you're a video guy. Yeah. How does, how does what you make, how you make it change now that you are a person on a screen? The truth is almost not at all. And I think that's a problem.

Um, I, with the ringer, um, we are hiring someone to essentially be my social media video brain because I'm so bad at it. I'm like very, very bad with just like spatial visual intelligence, like generally, like, um, my wife and I are looking at potentially doing like a home redesign and like my taste is horrendous. What I think is true though, about the relationship between the podcast and my essays is that the podcast is what I, where I go for live conversations to understand something where I'm starting at a low level of understanding and essays are best when I have a high level of understanding.

So it's a little bit like I was an actor before I was a writer. So this is the metaphor that clicks with me. Like the podcasts are best when they're dress rehearsals. Um, not early rehearsals, not like absolute shit where actors don't know their lines, but like dress rehearsals for the act for, um, opening night. And the best essays are performances after opening night.

You've worked out the kinks and there's an elegance and understanding and mastery that allows the essay to prove a point without feeling like you're, you know, wandering through some blocking that's shit. But even an audio, right? Like I make a lot of decisions about, is this person a good talker? Right. Are they engaging? Cause they might be super smart, but they're just not interested in having a back and forth or a tape back and forth, let alone, do they have a strong accent that makes them hard to hear? Right.

If I was just writing, none of those things would be an issue. Um, and I assume on video when, and if I do that, that stuff, those questions will get even more foregrounded. Like, are these people interesting to look at as well as here? Right. I, I, I don't know, frankly, whether, um,

for a job like mine, shading for people who are so called, who are, who are quote unquote, like good to look at, um, is as important as the substance of the conversation. Like there are so many podcasts that are just so nerdy, just too obvious nerds nerding out for like two, three, four hours. And like, it's not Hollywood. Um, but it's incredibly popular and sometimes incredibly influential.

Um, so I think there's something about the internet as opposed to television or as opposed to sort of, let's say 20th century television where, um, uh, people like seeing people that look like people and they don't need to see all of the participants in video podcasts look like they're, you know, Tom Cruise or someone who lives in Beverly Hills.

We'll see. Okay. You maybe feel slightly better about my likely entry into video podcasting. That's why I had you on Derek Thompson. You are great to read, listen to look at. Thanks for coming on. Thank you, Peter. Appreciate it. Thanks again to Derek Thompson. Been a while since he's been on the show. Glad to have him back. Thanks to Rishi who produces and edits the show and also is moonlighting as a content creator with me.

That was nice. Thanks to our advertisers. Thanks to you guys for listening. See you soon.

Bye.