Best of the Week: Algorithmic adventures, idiot marketers, walled gardens and the Oban ferry
The Joe Rogan Experience is causing Spotify grief, and Australia's TV networks are in bed together on a streaming video market place
Welcome to Unmade, written in the UK while you were sleeping on Saturday morning.
Today’s writing soundtrack: The Smiths - The Queen Is Dead. (I hope nothing occurs to make me regret that choice before this email’s scheduled send time.)
Happy Curmudgeons Day.
I’m not saying it’s a quiet news day, but the headline on one of the top stories on news.com.au as I write this is “Brad Pitt not ‘secretly dating’ famous singer”. That approach certainly does open up some rich journalistic territory for articles about things that are not happening to celebrities. You’ll be amazed what Hugh Jackman hasn’t been getting up to.
Meanwhile, it’s been a week of algorithmic adventures.
For starters, I seem to have been sucked into a weird algorithmic loop on Twitter where updates from the same four profiles consistently appear near the top of my timeline for no obvious reason.
Despite following my more than 30,000 accounts, Twitter has recently been prioritising letting me know what is no longer the current time from Big Ben (generally, several hours later)…
… when the International Space Station is above Denver (which I’ve never visited)…
… teen journalist Leo Puglisi’s cat (which is fine by me, but getting a little repetitive)…
… and service updates from a Scottish ferry company that once stranded me in the Hebrides…
All of which is perhaps better than my YouTube account, which believes that I only like dashcam near misses and old Mitchell & Webb clips.
Back when Pandora Radio was available in Australia, my recommendation algorithm got trapped in a feedback loop where I was pretty much only hearing songs from The Ramones, which wasn’t the end of the world, although I did end up wishing they’d learned a few more chords.
And slightly more inconveniently this week, I fell foul of a banking algorithm which had something of a cascade effect.
Planning ahead for next week’s return to Australia, I ordered a podcast recorder on Amazon (how I discovered what I didn’t know that I didn’t know about headphone types and memory card compatibility is a story best left for another time).
Attempting to have the recorder delivered to my home in Australia while I’m in the UK was something my bank did not like. That was despite my having already told the bank I’d be overseas (I’ve previously experienced the high jinks of a card suddenly being cancelled because the algorithm decided I was in a suspicious location.)
So the bank declined the payment, which in turn triggered Amazon to not only cancel the order, but suspend my Prime account. Which was linked to my Alexa speakers. Suddenly every room in the apartment was full of Alexa’s robotic voice, speaking in multiple languages awaiting setup instructions. It all felt quite dystopian as I weighed up whether to own up to the rest of the household about my involvement in Alexa’s abrupt mutiny.
It wasn’t quite like that Black Mirror episode where the citizen loses her identity and can’t operate in society any more, but it made it feel a little more realistic.
And yet I don’t learn. Having untangled most of the situation, you find me listening to today’s writing soundtrack via my newly reconnected Alexa.
Today: Spotify’s podcast problem, the TV networks start to build their walled garden, and Mark Ritson’s EFT scheme.
After the gold rush
It’s been a week where the question of how much responsibility platforms take for content decisions was top of the agenda.
In audio, musician Neil Young asked his management to remove his music from Spotify, in a gesture of protest around the audio platform’s podcast policy. In 2020, Spotify spent something like US$100m on buying the rights to one of the world’s most listened to podcasts, The Joe Rogan Experience.
On top of obtaining exclusive content that will bring new listeners to the platform, there was a further economic rationale to that acquisition - minutes which appreciative subscribers spend listening to podcasts are minutes where musicians do not need to be paid.
However, popular, polarising podcasts also bring controversy with them that most music does not. Joe Rogan has regularly been accused of helping spread incorrect information around the Covid pandemic.
As Young put it: “Spotify is spreading fake information about vaccines – potentially causing death to those who believe the disinformation being spread by them.”
He offered up the ultimatum: “They can have Rogan or Young. Not both.”
For Spotify, there’s a double dilemma beyond whether to allow its stable of talent freedom of expression. As well as premium subscribers, it also has an ad-supported tier.
If Spotify became a platform associated with brand risk, then its advertising teams will face the sort of boycotts by the likes of Sky News, or 2GB during the days of Alan Jones.
Attention so far this week seems to have been on Spotify subscription cancellations, with some suggestions this week that the platform’s technology has struggled to cope with a surge in consumers wanting to close their accounts.
However, consumers using social media to target advertisers will be the next risk.
So far, Spotify has backed Rogan, saying it will remove Young’s music, although as I write, it’s not gone yet.
It’s hard to say what the effect has been on the company in commercial terms.
Eventually Spotify will have to disclose any cancellations to its New York Stock Exchange Investors. The Spotify share price was down this week, but it had already been falling for months, with its US$32bn market capitalisation half of what it was a year ago.
Spotify will announce its quarterly financial results next Thursday, Australian time. Although those numbers will cover the three months up to the end of December, the questions from the market will no doubt focus on the Joe Rogan problem.
Meanwhile, the founders of Substack, the platform Unmade is written on, also found themselves having a similar conversation this week.
The Center for Countering Digital Hate released a report saying that Substack is generating at least $2.5m in subscription revenue from anti-vax newsletters.
In the scheme of things $2.5m isn’t that much - but the principle is the important thing - either Substack chooses to police its content, or it doesn’t.
Substack doesn’t want to. The three founders Hamish McKenzie, Chris Best, and Jairaj Sethi posted an open letter on Wednesday, arguing that in most cases the platform should not take a hand in censoring the output of writers who use it.
It’s a slightly different argument from the disingenuous one used by the likes of Facebook that the platform is like a postal or telephone service and should have no responsibility for the information it helps transmit. Their argument is that disinformation should be countered by arguing against it, not driving it under ground. I’m not sure I agree.
However, the current business structure of Substack means that it faces a particular problem with marginal content. While the platform does not outlaw advertising, it discourages it, preferring its writers to focus on their writing, supported by subscriptions. (As I’ve previously disclosed, when I joined the Substack Pro program four months ago, part of the deal was to carry no advertising on Unmade, for the first year.)
But one of the issues with subscription newsletters, particularly those focusing on cultural or political topics, is that they thrive by super-serving a narrow niche.
A move towards polarised content becomes a logical consequence of the move away from advertising-supported, to subscription-supported, media. One factor in News Corp’s place as Australia’s most successful subscription publisher is that its products (including its paywalled newspapers and Sky News Australia) super-serve a niche audience. They give that paying audience what it wants; they don’t seek to appeal to everyone.
That’s a different proposition to primarily ad-supported products where attracting the biggest audience, and not doing anything to frighten the advertisers is the name of the game.
In Australia, the question of platform intervention in content is getting bigger. The Australian Competition and Consumer Commission seems intent on forcing the platforms to take legal responsibility for the content they carry - particularly when it comes from anonymous users.
Whether they like it or not, the platforms are going to need to accept that they are publishers too.
More connected
Another issue which is shaping up as a key development for 2022 is the imminent moment when connected television becomes as big as traditional broadcast.
I wrote about it last week, and asked the question of who, ultimately, would control the ads.
Bain’s Ben Shepherd wrote an interesting piece on LinkedIn this week in response.
He argues that the battle has already been fought and won, concluding:
“Google, Tizen, Roku and Amazon are the new networks, alongside manufacturers like Samsung, LG, Vizio, Sony and Panasonic who choose what software powers their hardware. And everyone else is going to have to play by their terms.”
Given that he’s usually right about such things, I wouldn’t bet against that.
But you can’t fault the TV networks for trying to change the outcome. The lessons of programmatic advertising for news publishers, who handed over the supply chain to Google in exchange for some magic beans a decade ago, are there to be learned. Publishers now get cents in the dollar, with Google effectively levying a huge digital tax on publishing.
In the new walled gardens that connected TV promises, there might be an opportunity for a do-over.
According to to an article on MI3 on Tuesday, Seven, Ten and Nine are belatedly working on a video advertising marketplace, via ratings body OzTam, which the three jointly own.
I say belatedly. The then boss of the ABC Mark Scott offered the networks an opportunity to build a broadcast video streaming platform together, based on the ABC iView technology, but the commercial players declined.
Now though, if the three networks work together, and tightly control which advertising exchanges can access their digital content, they have far greater potential to keep the likes of Google at bay.
MI3 quotes an anonymous TV exec as saying: “If you want a frequency-capped buy across the major publishers… using a common ID… this is how you will have to do it.”
MI3 suggests that one reason the walled garden plan has not officially been announced is because industry bodies have been “burned by making announcements and then taking years to deliver”.
I suspect there’s another reason - there’s a legal risk in rival companies working together in anything that looks like a cartel. The argument might fly that they need to stand together to oppose the likes of Google, but it would also need the blessing of the ACCC.
It might be no bad thing for advertisers - too many of their ad dollars leak out of the current programmatic supply chain. But the media agencies, who would be in a position to block it by persuading clients to put dollars elsewhere, would want to understand what was in it for them.
If the networks succeed, it will be a big deal in Australia, and watched closely by the rest of the world.
Unmade Index: Bouncing back after a messy week
Don’t be fooled by yesterday’s bounce in The Unmade Index.
In the month since we started the index - which charts the behaviour of Australia’s ASX-listed media and marketing companies - it’s fallen more dramatically when the wider ASX All Ordinaries have fallen, and bounced back more strongly on the up days too. It’s a volatile little fella.
Yesterday was no exception, with the All Ords coming back up by just over 2%, after having fallen by more than 7% for the week.
Even after yesterday’s recovery, The Unmade Index, which started 2022 pegged at 1000 points, is currently down by 12.3% for the calendar year to date.
The last few days saw several negative milestones including both Seven and Ooh Media’s market capitalisations dropping back below their $1bn levels, and Southern Cross Austereo falling below half a billion.
Of the major media stocks, Nine is among the worst performers, down by nearly 15% YTD, despite its 4.55% recovery yesterday. The company’s price is being driven down by market sentiment turning against its majority owned real estate site Domain, which is in turn down by 19% YTD as the property outlook begins to fade.
Dr Spin: Mark Ritson, a postmodern adult (who wants new steps)
Dr Spin writes:
Dr Spin’s favourite marketing professor Mark Ritson has been up to his tricks again.
Back in 2018, Ritson exposed the grubbiness of influencer marketing by using a digital marketplace to pay several Instagramers a few dollars to promote a piece of digital artwork which was in fact his arse.
As Ritson discloses to readers of his column in the UK’s Advertising Week, the inspiration behind the move into non fungible tokens, is the noble desire to do up his house. The project is called “I Need a New Set of Steps”.
Bidding currently ranges from just under half an Ethereum coin (a little over $3,000) to 1.1 ETH per artwork.
Ritson may still be experiencing a degree of scepticism, telling his audience:
“It’s a sad state of affairs when older and more experienced marketers are too confused or too afraid of their idiot marketing boss to be able to call out the pointlessness of NFTs and all the other hoo-haa that obscures the mission of marketing. But to all those decent men and women I say, ignore this horseshit, this too will pass. And to those addled and obsessed with NFTs and contemplating some future conference speech about how this little, little thing will ‘transform’ and ‘revolutionise’ marketing ‘forever’, I say, get the fuck back to work.”
Time for me, meanwhile, to stop work and let you get back to the weekend.
If all this talk of subscription newsletters has got you thinking about how to fund your favourite independent marketing publications (ahem) than let me remind you that you can subscribe to the paid tier of Unmade for the bargain monthly price of $65 per month. Surely that’s better value than an NFT.
Have a great weekend.
Toodlepip…
Tim Burrowes
Proprietor - Unmade
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