On being original
Hey, is this thing still on?
The end of culture
Something I noticed about the Space Jam 2 trailer was how much of the packaging was focused on callbacks and pop culture references. It's already a sequel, of course it has to be self-referential and fan service-y, but to another level. It's as if the director saw the "most ambitious crossover event in history" memes and thought, haha yeah but what if? jk but what if?
Wikipedia claims Seinfeld was the first sitcom to use the callback (citation needed), but I wonder if you could quantify that kind of usage over time. Maybe a reasonable approximation is what percentage of box office revenue comes from sequels vs from original movies, and that number has gone up dramatically since 2000. It's not surprising that cultural references are on the rise - culture is shared much more quickly and widely with the internet, we have a larger library of references to call back to, and so on.
(via reddit user u/spicer2)
But I think the real story is just that betting on sequels is better risk-reward. Streaming economics are pretty heavily scale-driven: content is king, and to efficiently produce expensive content, you need a large subscriber base to amortize over. And in this case, Disney is winning.
Netflix was first to throw huge chunks of money at building new media franchises, but haven't had many lasting successes (Stranger Things is the only definitive hit to come to mind, maybe The Crown or Bojack). Even with shows that dominate a release cycle, e.g. Queen's Gambit, Netflix hasn't monetized them well - while searches for chess kits and online chess games were dramatically up, there's no official merch taking advantage of that. Part of Netflix's problem is that it doesn't really know which shows are going to be hits or how big they will be. Why spend money on branded physical things when that brand might not stay relevant past the first week of streaming? So, the obvious path for Netflix is towards buying sequels, a pretty large shift in strategy.
Anyways my point is that it's hard to come up with original ideas and it's hard to sell those original ideas to others. What's popular is often just rehashing tired concepts for the lowest common denominator, like the fortune cookie dudes or "thread 👇" dudes on Twitter, and that's just not worth it. My only real goal with this newsletter is to publish a bunch of hot takes and take victory laps with the ones that happened to be right - but those takes had better be original!
Twitter subscriptions
So 8 months ago (really?) I wrote about Twitter's initial subscription strategy. I think that post is basically just as relevant today as it was before. Twitter still hasn't launched their subscription product, but did outline its strategy more clearly in their Analyst Day presentation.
One thing to really briefly touch on: Twitter says its current advertising mix is split 85/15 between brand and performance and wants to get to a 50/50 split. My view is that Twitter, Reddit, Snap, and Pinterest overindexed early on with brand ads (lowest hanging fruit, don't require ML, but don't scale well) and are now trying to course correct. The brand ads helped the companies get started and raise capital while they build out the capex-intensive performance ad infrastructure (brand ads are mostly sales/creative opex). But there is a playbook here for social platforms to turn around their business and narrative by focusing on performance ads, the capex just takes time to pay off. TikTok is probably in this zone right now.
Additionally, Twitter's investments into dev velocity have paid off beyond just the ads platform, they really are shipping much more quickly. The company laid out 3 specific ideas for "what's next": Spaces (aka Clubhouse), Revue (aka Substack), and Super Follows (aka Patreon).
I think each of these initiatives will be successful, and in large part because Twitter has already invested a lot into its social graph and moderation tools. Regulatory requirements like CCPA and GDPR entrench existing participants formally, but norms informally entrench existing participants. I don't want to give Twitter too much credit here, they are not exactly paragons of moderation, but they at least message better than Substack and Clubhouse do about harassment and speech, and building out the tools to tackle this effectively is extremely expensive.
It's also interesting to me how heavily A16Z has funded the competitors in this space. I have Many Thoughts but this post has been delayed long enough. A quick thought is if Substack and Clubhouse could merge and integrate well with each other - one offers ephemeral, synchronous, unscripted content, while the other offers evergreen, scheduled, and longer-form content. Clubhouse has built something of a social graph and is testing micropayments, while Substack has attracted creators and has focused on subscriptions. Who knows what it would take to merge the two, but on first blush it's not that ludicrous.
RIP Medium
I feel like I have been very consistent on how Medium's business model won't work, namely that platform subscription revenue ($5/mo for all of Medium) is insufficient to fund content creation and does not align incentives well.
From Casey Newton,
Amplify’s writers are paid a small and essentially random fraction of subscription revenue, based on how many people read their story. In theory their financial upside is unlimited, but in practice the program pays almost no one a living wage. A venture capitalist bragged to me that he had made $25,000 on Amplify over the past 11 months — a great sum for a side hustle, but barely enough to make the rent for most writers. Certainly it could not compete with the advances offered by the upstart newsletter platform Substack, which captivated the media’s attention last year as a series of staff writers for large publications, myself included, left their jobs to write newsletters on the platform.
Also,
Worse, the data suggested that Medium’s original journalism was not converting free readers to paid subscribers. Surprisingly, what seemed to convert readers most reliably were random stories on the digital content farm that had sprung up around its high-gloss publications.
I don't really know what else there is to say. Without a durable creator-consumer relationship there is no guarantee of traffic, and without price discrimination there just isn't enough money to go around. Watching Medium pivot is watching a train crash in slow motion, where everyone but the conductor is aware of the impending disaster.
I keep thinking about Disney and how they own virtually all cultural and media production, and how that is only going to get worse. All these subscale companies are going to go bankrupt or rolled up into a larger offering if they keep insisting on these bad business models. I want to hear more voices and see people take risks, that won't happen when there are literally 5 media companies.
Ultimately, that's why I follow the creator space so carefully (wouldn't go so far as "rooting for the companies") — it is super promising and has the potential to sustain a different class of creators than the current system does.