Conservatives often talk about the value of free markets, but nobody really knows what a completely free market looks like or operates because every government places regulations on businesses.
But, as I argue in this video, Facebook’s algorithm gives us a fairly accurate look at what a free market would actually look like. And it’s not pretty.
You may think that if a YouTuber has over a million subscribers they’re rolling in money, but in most cases you’d be wrong. CPMs on YouTube ads have always been low and the recent “adpocalypse” has made things worse. But that doesn’t mean you can’t make a living on YouTube. You just have to get creative about your monetization. I explain how in this video
To understand how J. Matthew Turner ended up creating a viral YouTube essay arguing that Daniel LaRusso, the young hero of the 1984 film The Karate Kid, was actually the villain of the movie, you first need to know the story behind the video he posted to YouTube a month before that one. For years, Turner, a video editor from New York, harbored a conviction that the movie Mortal Kombat was so similar in plot and themes to the Bruce Lee cult classic Enter the Dragon that they were virtually the same movie. “It was in the background of my head for a long, long time,” he told me recently. “And for whatever reason, I happened to think of it again last year and I suddenly saw how it should be done.” He had always envisioned a 15-minute video in which he would methodically build a case for his thesis, but he knew it would be difficult to keep viewers entertained for that long. “But now I realized that I should just show all the shots side by side and then try to explain the plot of both movies as one movie at the same time.” Continue reading
For the longest time it seemed major tech platforms like Facebook, Twitter, and Google wanted nothing to do with professional publishing, and by that I mean hiring professional content creators, i.e. journalists, to create polished media content. Why? Because Silicon Valley hates anything that doesn’t scale. Original content creation is labor intensive, expensive, and can’t be automated with code. The content created has a limited shelf-life, thereby decreasing the longterm ROI for the labor devoted to it.
You can see this philosophy reflected in how media companies have framed themselves to Silicon Valley investors, and by that I mean they’re attempting to pretend they aren’t media companies at all. BuzzFeed, when announcing a $50 million investment from Andreessen Horowitz, described itself as a company with “technology at its core,” and one of the investors compared it to Tesla and Uber. We’ve also seen the rise of the “platisher,” which is a media company that tries to create a platform for user-generated content (for instance, Forbes’ massive contributor network) so it can scale well beyond the limits of its paid editorial staff.
Why, then, have we recently seen tech behemoths, most of which already boast hundreds of millions of users, trying to enter the original content game? In some cases this has meant merely opening up their platforms so media companies can host longform content directly to them, as is the case with Facebook and Snapchat. Both have entered into partnerships with major news orgs to host content directly within their app ecosystem in exchange for a share in revenue for any ads sold against that content.
But other tech companies are wading expressly into original content creation, either by hiring journalists and artists to produce exclusive work for these companies’ platforms or by outright buying up entire media companies. The most obvious example is Medium, the blogging platform headed by Twitter co-founder Ev Williams. Though anyone can create a blog on Medium (and many do, including me), the company also employs editors and freelance journalists to produce magazine-like publications (my favorite is Backchannel, edited by Steven Levy).
A few months ago, Reddit launched a professionally-produced podcast, then followed it up with a curated email, and is now employing a team of videographers to produce original video. Business Insider recently reported that Twitter has made attempts to purchase Mic, the policy-oriented news site that’s geared toward millennials. Facebook and YouTube, both at war for top video talent, have dished out millions of dollars to entice creators into producing video exclusively for their platforms. Amazon CEO Jeff Bezos decided it was worth $250 million of his own money to buy up the Washington Post and now Verizon is purchasing AOL, which has transformed itself from a platform to a media-oriented content company, for $4.4 billion.
So why are tech companies suddenly interested in labor-intensive, unscalable content creation? My guess is that it has something to do with a combination of the 80/20 rule and the 1 percent rule. Both embrace the idea that the most influential users on any platform make up a tiny percentage of the overall user population. It’s no secret that the media represents disproportionate influence on major social media sites like Twitter, both in terms of branded news org accounts and the personal accounts of their reporters.
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As I’ve written before in regard to Medium, tech platforms will sometimes use what is called a “mullet strategy” (business in the front, party in the back) by commissioning high quality content to attract readers with the hope that some of those readers will stick around to launch and run their own user accounts on the platform. As I wrote in November, “You’re essentially paying those early influencers to populate your network with content with the hope that the masses will come clamoring to join the club.”
This is why YouTube is shelling out money to keep its stars under its own roof. One could argue that losing a few YouTube personalities wouldn’t matter for a platform that has over 1 billion users who upload 300 hours of video to its platform each minute, but YouTube realizes these stars are the foundation on which the entire network stands. If they were to suddenly leave for Tumblr or Facebook’s video platform, then many of their fans will also begin uploading video content to these platforms, thereby planting the seeds that could grow into a massive user base. Influencers matter, and these tech platforms realize that sometimes you need to pay to keep the influencers from decamping.
So perhaps the notion that original content creation can’t scale is outdated. Instead, it is a means to an end, a way to keep the business flowing in the front so that the unwashed masses of amateur users can be lured into joining the party in the back. Old media isn’t dead after all; it’s just now used as bait.
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Image via Ketchum