Quotulatiousness

October 30, 2024

Zuckerberg’s bad bet on Virtual Reality

Filed under: Business, Media, Technology — Tags: , , — Nicholas @ 03:00

Ted Gioia notes the anniversary of Mark Zuckerberg’s worst financial decision — the plunge into virtual reality:

A big birthday happens tomorrow. But don’t expect a celebration.

There will be no party, no disco. There will be no cake, no clown, no bouncy house for the kids. No Marilyn Monroe cooing the birthday song.

Just dead silence. But make no mistake — this is a very expensive birthday.

Exactly three years ago, Mark Zuckerberg placed a huge bet on virtual reality. On October 28, 2021, he even changed the name of his company — from Facebook to Meta.

A new company was born. But that’s now a huge embarrassment.

The name Meta is a lasting reminder of the most foolish decision Zuck ever made — even worse than Facemash or those ugly T-shirts.

Of course, that’s not how he saw things three years ago.

“Meta’s focus will be to bring the metaverse to life,” the company announced. “In the metaverse,” Zuckerberg bragged, “you’ll be able to do almost anything you can imagine.”

There was a catch — the tech billionaire needed to convince millions of people to wear virtual reality headsets.

But they looked ridiculous — you literally had to wear blinders if you wanted to enter Mr. Zucker’s neighborhood.

The very next day, I declared that “Meta is for losers”.

“This will never be cool.”

Zuckerberg was “making the wrong bet”, I warned — and gave my reasons:

    The interface looks goofy and cartoonish. Instead of entering the gritty, exciting world of Blade Runner, you’re trapped inside a bad episode of Family Guy

    And users will look creepy too. You need to lock yourself into a headset to get the full benefit of the metaverse — and there’s no way that Zuckerberg can make that look cool. The people who spend hour after hour in his metaverse will be the subject of jokes and mockery …

    They will be nerds and incels and the most disgruntled members of society, each desperate for escape.

Mark Zuckerberg eventually figured this out. But the company lost more than $20 billion over the next two years in a desperate attempt to convince normal people to abandon reality and enter his fake world.

Even as consumers resisted, Meta refused to admit it had made such a colossal mistake. Just last year, Zuckerberg still denied that he was abandoning virtual reality.

“A narrative has developed that we’re somehow moving away from focusing on the metaverse,” he told shareholders. “So I just want to say upfront that that’s not accurate.”

Then he did exactly that — retreating from the metaverse he had spent so much money building.

Fortune warned three months ago that Mr. Z’s metaverse “may finally be running out of cash”. Then in August, Meta cancelled the development of a next generation VR headset.

August 29, 2024

Pavel Durov’s arrest isn’t for a clear crime, it’s for allowing everyone access to encrypted communications services

Filed under: France, Government, Liberty, Media, Technology — Tags: , , , , — Nicholas @ 03:00

J.D. Tuccille explains the real reason the French government arrested Pavel Durov, the CEO of Telegram:

It’s appropriate that, days after the French government arrested Pavel Durov, CEO of the encrypted messaging app Telegram, for failing to monitor and restrict communications as demanded by officials in Paris, Meta CEO Mark Zuckerberg confirmed that his company, which owns Facebook, was subjected to censorship pressures by U.S. officials. Durov’s arrest, then, stands as less of a one-off than as part of a concerted effort by governments, including those of nominally free countries, to control speech.

“Telegram chief executive Pavel Durov is expected to appear in court Sunday after being arrested by French police at an airport near Paris for alleged offences related to his popular messaging app,” reported France24.

A separate story noted claims by Paris prosecutors that he was detained for “running an online platform that allows illicit transactions, child pornography, drug trafficking and fraud, as well as the refusal to communicate information to authorities, money laundering and providing cryptographic services to criminals”.

Freedom for Everybody or for Nobody

Durov’s alleged crime is offering encrypted communications services to everybody, including those who engage in illegality or just anger the powers that be. But secure communications are a feature, not a bug, for most people who live in a world in which “global freedom declined for the 18th consecutive year in 2023”, according to Freedom House. Fighting authoritarian regimes requires means of exchanging information that are resistant to penetration by various repressive police agencies.

“Telegram, and other encrypted messaging services, are crucial for those intending to organise protests in countries where there is a severe crackdown on free speech. Myanmar, Belarus and Hong Kong have all seen people relying on the services,” Index on Censorship noted in 2021.

And if bad people occasionally use encrypted apps such as Telegram, they use phones and postal services, too. The qualities that make communications systems useful to those battling authoritarianism are also helpful to those with less benign intentions. There’s no way to offer security to one group without offering it to everybody.

As I commented on a post on MeWe the other day, “Somehow the governments of the west are engaged in a competition to see who can be the most repressive. Canada and New Zealand had the early lead, but Australia, Britain, Germany, and France have all recently moved ahead in the standings. I’m not sure what the prizes might be, but I strongly suspect “a bloody revolution” is one of them (if not all of them).”

July 9, 2024

QotD: “No official Propaganda Department has ever been half as effective as Twitter and Facebook”

Filed under: Media, Politics, Quotations, USA — Tags: , , , , , , — Nicholas @ 01:00

Straight off, we know one thing they wouldn’t do — create a Reich Culture Chamber or Department of Enlightenment. To be fair to the Commies and Nazis, they probably didn’t have much of a choice in their home countries — totalitarianism being what it is, and Europeans being what they are — but the Soviets, at least, soon saw the error of their ways, and let the free market handle it overseas. 99% of the USSR’s propaganda effort was done pro bono by Western “intellectuals”, and that’s how it’s done — convince cripplingly insecure dorks that they’re oh so smart for parroting your party line, and they’ll do all your dirty work for free.

Our overlords figured that out, give credit where it’s due. No official Propaganda Department has ever been half as effective as Twitter and Facebook. But that’s a problem, too, as we’re starting to see. The problem with freelance propaganda is the free market problem of marginal utility.

Facebook and Twitter are SJW cesspools. Everyone knows this. Even your sweet old granny, who is only on Facebook to exchange pie recipes and knitting ideas, knows this, because the #WokeStapo came for knitting years back. When the “trust and safety council” goes so far as to ban the sitting President of the United States, even hermits living in remote Himalayan caves got the message — toe the Party line on social media, or else.

This reduces the value of ALL information on social media to, effectively, zero. Sure, it might be true — and propaganda, as we know, works better the closer to the truth it steers — but given that they’ve even gone after knitting, for pete’s sake, means that any even halfway sorta quasi rational person assumes everything on social media is nothing but propaganda.

Severian, “If They Were Clever”, Rotten Chestnuts, 2021-06-08.

March 31, 2024

“Nobody trusts the technocracy anymore. People suffer from it.”

Ted Gioia is both surprised and pleased that so many people responded to his recent anti-technocatic message:

When I launched The Honest Broker, I had no intention of writing about tech.

My main vocation is in the world of music and culture. My mission in life is championing the arts as a source of enchantment and empowerment in human life.

So why should I care about tech?

But I do know something about the subject. I have a Stanford MBA and spent 25 years at the heart of Silicon Valley. I ran two different tech companies. I’ve pitched to VCs and raised money for startups. I’ve done a successful IPO. I taught myself coding.

I’ve seen the whole kit, and most of the kaboodle too.

I loved it all. I thought Silicon Valley was a source of good things for me — and others.

Until tech started to change. And not for the better.

I never expected that our tech leaders would act in opposition to the creative and humanistic values I held so dearly. But it’s happened — and I’m not the only person who has noticed.

I’ve published several critiques here about the overreaching of dysfunctional technology, and the response has been enormous and heartfelt. The metrics on the articles are eye-opening, but it’s not just the half million views — it’s the emotional response that stands out.

Nobody trusts the technocracy anymore. People suffer from it.

Almost everybody I hear from has some horror story to share. Like me, they loved new tech until recently, and many worked in high positions at tech companies. But then they saw things go bad. They saw upgrades turn into downgrades. They watched as user interfaces morphed into brutal, manipulative command-and-control centers.

Things got worse — and not because something went wrong. The degradation was intentional. It happened because disempowerment and centralized control are profitable, and now drive the business plans.

So search engines got worse — but profits at Alphabet rose. Social media got worse — but profits at Meta grew. (I note that both corporations changed their names, which is usually what malefactors do after committing crimes.)

Scammers and hackers got more tech tools, while users got locked in — because those moves were profitable too.

This is the context for my musings below on the humanities.

I don’t want to summarize it here — I encourage you to read the whole thing. My only preamble is this: the humanities aren’t just something you talk about in a classroom, but are our core tools when the human societies that created and preserved them are under attack.

Like right now.

March 29, 2024

QotD: Pay no attention to the empty suit behind the social media curtain!

Filed under: Business, Media, Quotations, Technology, USA — Tags: , , , , — Nicholas @ 01:00

These days, there’s no discernible relationship between “content” and “revenue”, because Facebook doesn’t have “revenue”. All it has is a ticker symbol. Much like Enron, whatever physical product Facebook might once have theoretically produced — all those cat pictures — has been totally subsumed into share price fuckery. Yeah yeah, theoretically their “revenue” comes from ads, but as is well known, a) there is not, and never has been, in any industry, a discernible causal relationship between ads and revenue, and b) Facebook lies through its teeth about it anyway. How many times have they been caught now, including in sworn testimony to Congress?

Given all that, why not censor? Why not let your freak flag fly? Just as being innovative actually counts against you in the music biz these days — sure, sure, y’all might be the next Beatles, but we know Taylor Swift’s lab-grown replacement will move fifty million units — so there are considerable drawbacks, in the social media moguls’ minds, to letting just any old schmoe post anything he wants up on their platforms. What if Faceborg’s ad-generation algorithm decides to put a #woke company’s ad on a badthinker’s page? Faceborg’s entire business model rests on getting #woke companies to keep buying ads, since those ad buys are the only thing that keep the stock price up. And since those #woke corporations have made it abundantly clear that they don’t want those people’s business …

Swing it back to the top. Faceborg et al have figured out a surefire way to “make money” by manipulating their stock price. They don’t need a physical product to do it, but what they absolutely must have, the one thing from which all others flow, is “clicks”. Eyeballs. Whatever you want to call it, the whole house of cards is built on the premise that there are actual users out there — real, physical people, who exist in meatspace — who might theoretically buy the advertisers’ products. But … what if there aren’t?

Zuck et al have been pretty good at faking it so far, but as everyone knows, they are faking. For one thing, they keep getting caught. For another, even academics — the dumbest critters in captivity, Commodore 64-level NPCs who can be counted on to swallow the SJW narrative hook line and sinker — keep publishing studies showing that some huge number of all social media accounts, on all platforms, are bogus.

Indeed, you can test it for yourself. I know, I know, FED!!!!, but hear me out: Get a VPN. Sign up for a burner email. Rejigger the VPN, then use the burner email to sign up for Faceborg, Twitter, whatever. Don’t actually post anything; just sign up. It’s 1000 to 1 that even with no activity whatsoever, you’ll still be deluged with friend requests. The algorithms will take care of that, because as we’ve noted, they have to push the illusion that people are using these platforms, that eyeballs are landing on pages, that fingers are clicking on ads. You’ll get a whole list of “suggestions” of which accounts to follow, all of which — surprise surprise — are never more than a click away from some big advertiser.

Severian, “Own Goals”, Rotten Chestnuts, 2021-07-21.

February 22, 2024

QotD: Why companies continue to irritate their customers with online social justice marketing

So, up top, when I said that Facebook “can’t or won’t” stop this kind of stuff? I lied. There’s no “can’t” about it. It’s “won’t”, for the simple reason that Facebook understands its market and the Daily Mail writers obviously don’t. You’d think that the legendarily trashy British tabloid media would get this — and as I understand it, the Daily Mail is somewhere in the bottom half of the barrel — but Facebook’s market isn’t its users. Not even big companies like Starbucks. Facebook’s market is advertisers, and what they, Facebook, are selling is views. Eyeballs. “Engagement”, I think the Ad Biz term d’art is. In short: It doesn’t matter what the comments are; it matters that the comments are.

Ad company execs are walking into a meeting with a Starbucks-sized company right now. They’re pitching a bold new social media strategy to their clients. And they know it works, these ad men say, because look at all this data from Starbucks. Their posts average so much “engagement” every time, but look, when they post on “social justice” topics, their “engagement” jumps 350%!!

In case you were wondering how all this “social justice” shit keeps appearing in ads, despite the well-known effect of pissing off companies’ established client base, well, there you go — the company execs, being #woke Cloud People, want to do it anyway, and they’ve got whole binders full of data from the marketing department that prove “social justice” ups social media “engagement” with “the brand” umpteen zillion percent.

Severian, “Internet Tough Guys”, Rotten Chestnuts, 2021-05-10.

February 8, 2024

North American newspaper economics

Tim Worstall discusses some of the issues ailing Canadian and American newspapers which are not easily solvable (government subsidies, as attempted in Canada, just turn the recipients into an underpaid PR branch of the governing party … not a good look in a democratic nation):

“Newseum newspaper headlines” by m01229 is licensed under CC BY 2.0 .

So, as a little corrective, a quick jaunt through what actually ails American journalism. The concentration is upon the big newspapers because that’s where the problem is worst. The conclusion is that it’s gonna get a lot, lot, lot, worse too. Because the industry is facing a base economic problem that it’s not willing to actually face up to. Or, at least, all the journalists writing about it aren’t — there’s the occasional sign that some of the business side of the equation grasp it.

[…]

Before Y2K American newspapers were segmented along geographic lines. The size of the country, the lack of a long distance passenger railroad network, meant that this was just so. If you’re printing a daily paper then you’ve got to deliver it daily. On the day it’s meant to refer to as well. If Chicago is 1,100 miles (no, I’ve not looked it up but that’s within an order of magnitude of being right, which is better than many newspapers manage with numbers) from New Orleans then the same newspaper is going to find it difficult to print and deliver to both markets. Add in the fact that trains take a week to traverse that distance, passenger trains – anyone who has ever travelled Amtrak will say it feels that long at least — included.

You could not and therefore did not have national newspaper (USA Today, with satellite printing plants, was an attempt to deal with this and slightly earlier than our cut off date but doesn’t change the basic story) distributions. What you had was a series of local and regional monopolies. Each one centred on a large population centre and serving the area around it that could be reasonably reached by truck overnight. Chicago and Cincinnati, not 1,100 miles away from each other, did have entirely different newspapers.

By contrast, and just as an example, the British newspaper market was national from pre-WWI. We simply did have overnight at worst passenger rail that covered the country. Partly it’s a much, much, smaller place, partly the passenger rail system was just different. So, printing overnight (and some maintained separate Scottish editions and plants) meant that those papers that came off the press in London at 8pm were on sale in Glasgow at 8 am, those that came off the press in London at 4 am were on sale in London at 8am. That’s not exact but it’s a good enough pencil sketch.

Cincinnati newspaper(s) served Cincinnati. Chicago, Chicago and New Orleans the area of New Orleans. There simply wasn’t a “national press” in the US in that British sense.

OK. But this also meant that American newspapers were much more like a monopoly in their local area than anything else. Network effects still exist even before computer networks after all. The most important of which was the classifieds.

As with Facebook, we’re all on Facebook because everyone else is on Facebook. So, if we’re to join a social network we’re going to be on Facebook where everyone else is — except those three hipsters who are where it isn’t cool yet. This applies to classifieds sections. Folk advertise in the one with the most readers, the widest market. Readers buy the one with the most ads in it, the widest market. You advertise the bronzed baby shoes, unused, where there are the most people looking for bronzed baby shoes, unused.

So, the dominant paper will suck up the classifieds in any particular market. Classifieds, fairly obviously back in the days of prams, cheap used cars, waiters’ jobs and so on being geographically based.

No, this is important. A useful pencil sketch of American newspaper revenues pre-Y2K was that subscriptions produced some one third of revenues. They also, around and about, covered print costs and distribution. They were, roughly you understand, about a face wash in fact.

Display ads produced another one third and classifieds the final one third. Classifieds were also wildly profitable — no expensive journalists to pay, no bureaux, just a few women waiting to get married on the end of the phone line.

December 9, 2023

The coming Micro-Macro culture war … and who’s going to win it

Filed under: Business, Economics, Media, Technology, USA — Tags: , , , , , , , , — Nicholas @ 05:00

Ted Gioia outlines the dismal state of the “macro” culture — television, movies, newspapers, book publishing and all the big corporations that control them — with the dynamism of the “micro” culture:

In the beginning, all culture was microculture.

You knew what was happening in your tribe or village. But your knowledge of the wider world was limited.

So you had your own songs and your own stories. You had your own rituals and traditions. You even had your own language.

But all these familiar things disappeared when you went off into the world. That was dangerous, however. That’s why only heroes, in traditional stories, go on journeys.

You learn on the journey. But you might not survive.

But all that changed long before I was born.

In my childhood, everything was controlled by a monoculture. There were only three national TV networks, but they were pretty much the same.

    When I went to the office, back then, we had all watched the same thing on TV the night before. We had all seen the same movie the previous weekend. We had all heard the same song on the radio while driving to work.

The TV shows were so similar that they sometimes moved from CBS to NBC, and you never noticed a change. The newscasters also looked pretty much the same and always talked the same — with that flat Midwestern accent that broadcasters always adopted in the US.

The same monoculture controlled every other creative idiom. Six major studios dominated the film business. And just as Hollywood controlled movies, New York set the rules in publishing. Everything from Broadway musicals to comic books was similarly concentrated and centralized.

The newspaper business was still local, but most cities had 2 or 3 daily newspapers — and much of the coverage they offered was interchangeable. Radio was a little more freewheeling, but eventually deregulation allowed huge corporations to acquire and standardize what happened over the airwaves. [NR: I suspect the “freewheeling” went away once the government started imposing regulations, and the corporate consolidation was enabled when they “deregulated” the radio licensing regime several decades later.]

When I went to work in an office, back then, we had all watched the same thing on TV the night before. We had all seen the same movie the previous weekend. We had all heard the same song on the radio while driving to work.

And that’s why smart people back then paid attention to the counterculture.

The counterculture might be crazy or foolish or even boring. But it was still your only chance to break out of the monolithic macroculture.

Many of the art films I saw at the indie cinema were awful. But I still kept coming back — because I needed the fresh air these oddball movies provided. For the same reason, I read the alt weekly newspapers and kept tabs on alt music.

In fact, whenever I saw the word alt, I paid attention.

That doesn’t mean that I hated the major TV networks, or the large daily newspaper, or 20th Century Fox. But I craved access to creative and investigative work that hadn’t been approved by people in suits working for large organizations.


The Internet should have changed all this. And it did — but not much. Even now the collapse in the monoculture is still in its early stages.

But that’s about to change.

If you don’t pay close attention, the media landscape seems pretty much the same now as it did in the 1990s. The movie business is still controlled in Hollywood. The publishing business is still controlled in New York. The radio stations are still controlled by a few large companies. And instead of three national TV networks plus PBS, we have four dominant streaming platforms — who control almost 70% of the market.

So we still live in a macro culture. But it feels increasingly claustrophobic. Or even worse, it feels dead.

Meanwhile, a handful of Silicon Valley platforms (Google, Facebook, etc.) have become more powerful than the New York Times or Hollywood studios or even Netflix. It’s not even close — the market capitalization of Google’s parent Alphabet is now almost ten times larger than Disney’s.

But here’s the key point — these huge tech companies rely on the microculture for their dominance.

Where is Facebook without users contributing photos, text and video? Where is Google’s YouTube without individual creators?

In terms of economic growth or audience capture, the microculture has already won the war. But it doesn’t feel that way.

Why not?

First and foremost, Silicon Valley is a reluctant home for the microculture. To some extent Alphabet and Facebook are even going to war with microculture creators — they try to make money with them even while they punish them.

  • So Mark Zuckerberg needs creators, but won’t even let them put a live link on Instagram and limits their visibility on Facebook and Threads.
  • Alphabet needs creators to keep YouTube thriving, but gives better search engine visibility to total garbage that pays for placement.
  • Twitter also claims it wants to support independent journalists — but if you’re truly independent from Elon Musk, your links are brutally punished by the algorithm.

This tension won’t go away, and next year it will get worse. The microculture will increasingly find itself at war with the same platforms they rely on today.

And legacy media and non-profits are even more hostile to emerging media. Go see who wins Pulitzer Prizes, and count how many journalists on alternative platforms get honored.

I’ll save you the trouble. They don’t.

November 30, 2023

Canadian government declares victory over Google, then lays down its arms and marches into captivity

Filed under: Business, Cancon, Media, Politics, Technology — Tags: , , , — Nicholas @ 05:00

The Trudeau government has won a glorious, historic victory over the evil capitalistic powers of Google in the war of Bill C-18. Let all patriotic Canadians raise their hands to cheer our victorious politicians before they have to admit out loud that they fucked up real good:

Heritage Minister Pascale St. Onge has surrendered to Google and Canadian media have avoided what would have been a catastrophic exclusion from the web giant’s search engine.

In the short term, this is very good news. The bureaucrats at Heritage must have performed many administrative contortions to find the words needed in the Online News Act‘s final regulations to satisfy Google, a beast which isn’t easily soothed. In doing so, they have managed to avoid what Google was threatening — to de-index news links from its search engine and other platforms in Canada. Given that Meta had already dropped the carriage of news on Facebook and Instagram in response to the same legislation, Google’s departure would have constituted a kill shot to the industry.

Instead, the news business will get $100 million in Google cash. For this, all its members will now fight like so many pigeons swarming an errant crust of bread.

The agreement will also allow the government, while surrounded by an industry whose reputation and economics have been devastated by this policy debacle, to attempt to declare victory. Signs of that are already evident.

That’s the good news.

The bad news is that while 100 million bucks is nothing to sneeze at, in the grand scheme of things it is a drop in the bucket for an industry in need of at least a billion dollars if it is to recover any sense of stability. Indeed, when News Media Canada first began begging the government to go after Google and Meta for cash, some involved were selling the idea that sort of loot was possible.

This did not turn out to be so.

Instead of the $100,000 per journo cashapalooza that was once hoped for, the final tally will be more like $6,666.00 per ink-stained wretch.

That figure is based on two assumptions. The first is that the government has agreed to satisfy Google’s desire to pay a single sum to a single defined industry “collective” that would then divide the loot on a per-FTE (full-time employee) basis to everyone granted membership in the industry’s bargaining group. Google had made it clear it had no interest in conducting multiple negotiations and exposing itself to endless and costly arbitrations. So, as we have a deal and Google held all the cards, it’s fair to assume it got what it wanted — a single collective with a single agreement and a single cheque.

November 10, 2023

Canadian media’s self-immolation an object lesson for British media

Marc Edge discusses how Canada’s legacy media joined together in a virtual suicide-pact to force Google and Facebook to give them millions in unearned revenue:

The best-laid plans of Canada’s biggest media owners went badly awry this summer, when Meta began blocking news across the country on its social media networks Facebook and Instagram in response to the Online News Act passed in June. Newspaper publishers lobbied the federal government relentlessly to force Google and Meta to compensate them for supposedly “stealing” their news stories by carrying links to them. But instead of bringing them hundreds of millions of dollars a year from the digital giants, as a similar law has in Australia, their campaign backfired badly in what has been described as “a massive policy blunder“, and “the most spectacular legislative failure in Canada’s living political memory“.

Not only will publishers not be getting any money from Meta, they likely won’t get any from Google either, as they have threatened to similarly block news in Canada when the law comes into effect in December. Ironically, publishers will instead lose millions instead, as the agreements they already have with at least Meta will be cancelled, and probably those with Google as well. The knock-on effect makes it a triple-whammy when you also consider the traffic that news media will lose to their websites from the platforms. Worst affected will be online-only publications which have depended on that traffic to build an audience. Most did not want the Online News Act and many spoke out against it, but they were drowned out by the newspaper lobby led by industry association News Media Canada. It is dominated by the country’s two largest chains, which are now owned by a private equity firm and US hedge funds.

The Online News Act is the second in a series of bills designed to regulate the Internet, which, when taken together, include many of the same elements as the UK’s omnibus Digital Markets, Competition and Consumers Bill now before Parliament. An Online Streaming Act passed in April will tax and regulate digital video services in Canada, which are mostly owned by U.S. companies such as Netflix, Disney, and Amazon. A so-called Online Harms Act designed to combat hate speech and online bullying was introduced in 2021 but died on the order paper with an election call. It was criticised by civil libertarians for potentially prohibiting otherwise lawful speech and was thus being revised, but so far it has not been re-introduced. Legislation aimed at increasing online privacy and consumer rights is also planned.

One of these things, on closer scrutiny, is not quite like the other ones, and a realisation is growing in Canada that the government may have been co-opted in its enthusiasm to regulate the Internet to participate in what has been called a “shakedown” of the digital giants. Canada’s news media have literally been on the dole for the past five years since they lobbied the government for a five-year $595-million bailout that expires next spring. This has prompted publishers to adopt Rupert Murdoch’s successful strategy in Australia of persuading the government to force the digital giants to share their advertising revenues with newspapers.

Canadian publishers lobbied for the Online News Act in part by running blank front pages for a day and also spiked several opinion articles by academics that had been accepted for publication by editors. Canada has long had one of the free world’s highest levels of media ownership concentration, along with Australia. It went to another level in 2000 with the “convergence” of newspaper and television ownership, against which Canada had no regulatory safeguards, unlike most other countries. The multimedia business model collapsed with the 2008-09 recession, when advertising revenues dropped sharply, and Canada’s news media have been lurching from bad to worse ever since. The country’s largest newspaper chain, Postmedia Network, was acquired out of bankruptcy in 2010 by a consortium of US hedge funds which had bought much of its previous owner’s high-interest debt on the bond market for pennies on the dollar. They have since taken more than $500 million out of the company in debt payments. The country’s second-largest chain, Torstar, was bought from its owning families at the outset of the pandemic in 2020 by private equity firm NordStar Capital, which has been similarly stripping the company with closures, redundancies, and asset sales.

September 25, 2023

Ted Gioia explains why he loves writing for Substack

Filed under: Media, Technology — Tags: , , , , — Nicholas @ 03:00

It’s much easier to reach the audience he wants to share with using his Substack than either Twit-er, er, I mean “X”, or Facebook:

Below I look at some surprising ways Substack has changed the media (and social media) landscape.

This gives me a good excuse to recommend the new Substack app. It’s now my go-to source for informed writing — providing access to a smarter and more diverse group of authors, thinkers, and creators than I’ve found anywhere else.

I’ve now been on Substack for 30 months, and the improvements in the platform during that time have far exceeded my expectations. I didn’t know any music writers on Substack back when I launched, but it now boasts a better roster of critics than any newspaper or magazine. By the way, I’m also subscribing to writers in a dozen or so other fields (culinary arts, economics, literature, finance, technology, psychology, etc.).

I’m a heavy user. I must have signed up for almost a hundred Substacks.

Substack has also added a lot of new features during those 30 months. I especially like Notes, which is similar to Twitter but with extra IQ points. And I’ve also benefited from cross-posting, recommendations, and many other new features. I also applaud options I don’t currently use (like chat and podcasts), because they empower writers and readers.

The reality is that Substack is innovating faster than I can keep up with. But I like it that way. It’s creating an interconnected and independent media ecosystem here.

Best of all are the core values behind all this:

  • Substack supports writers — who receive almost 90% of subscription revenues. This is the exact opposite of the traditional publishing model, where royalty rates of around 10% are typical.
  • I don’t need to attract advertisers, and this frees me from the conflicts-of-interest advertising brings to other platforms.
  • There’s no surveillance or selling of users’ private information here.
  • I share my articles directly with readers, and no algorithm or gatekeeper intervenes to prevent our direct connection.

For these and other reasons, I’ve been an advocate for the platform. And that’s a good introduction to my subject today.

September 22, 2023

“The Online News Act … has been an utter disaster”

Filed under: Cancon, Government, Law, Media, Politics — Tags: , , , , — Nicholas @ 03:00

Michael Geist on the ongoing disaster the federal government created with the Online News Act:

Prime Minister Justin Trudeau was asked this week about concerns with the implementation of Bill C-18, to which he responded that other countries are quietly backing Canada in its battle against tech companies. I posted a reality check tweet noting that Meta is not returning to news in Canada, the law’s regulation stipulating a 4% fee on revenues is not found anywhere else, and that Bill C-18 has emerged as a model for what not to do. With the House of Commons back in session, it is worth providing a more fulsome reality check on where things stand with the Online News Act. While the government is still talking tough, the law has been an utter disaster, leading to millions in lost revenues with cancelled deals, reduced traffic for Canadian media sites, declining investment in media in Canada, and few options to salvage this mess.

For those that took the summer off, Bill C-18 received royal assent in late June. Over the past three months:

1. Meta has blocked all news links in Canada and cancelled existing deals with Canadian news outlets. The blocked links covers both Canadian and foreign news in light of the broad scope of the law. While the Australian experience lasted a few days, the blocking in Canada has now gone on for weeks and there is little reason to believe that the company will reverse its position to comply with the law by simply not linking to news.

2. The government responded to the blocked news links by stopping to advertise on Facebook and Instagram and encouraging others to do the same. The boycott has had little effect as the Liberal party is still advertising on the platforms with a new round of ads this week, the Prime Minister is still posting on the platforms, and reports indicate that Facebook has not experienced a reduction in user activity. In fact, reports suggest that the experience on Facebook without news has improved. Further, a Competition Act complaint has not sparked any action.

3. Google responded to Bill C-18 by advising it too would remove news links from its services before the law takes effect in December. That position enabled it to wait for the government to release draft regulations that provide further detail on the application of the law and the standards for obtaining an exemption from the mandatory bargaining process that can lead to final offer arbitration overseen by the CRTC.

Several more items of concern at the link.

September 2, 2023

The 4% non-solution

Filed under: Business, Cancon, Law, Media — Tags: , , , , , — Nicholas @ 03:00

Michael Geist updates us on the Canadian government’s latest blunder in the Online News Act saga:

The government is releasing its draft regulations for Bill C-18 today and the chances that both Google and Meta will stop linking to news in Canada just increased significantly. In fact, with the government setting an astonishing floor of 4% of revenues for linking to news, the global implications could run into the billions for Google alone. No country in the world has come close to setting this standard and the question the Internet companies will face is whether they are comfortable with the global liability that would see many other countries making similar demands. The implications are therefore pretty clear: there is little likelihood that Meta will restore news links in Canada and Google is more likely to follow the same path as the Canadian government establishes what amounts to 4% link tax from Bill C-18 on top of a 3% digital services tax and millions in Bill C-11 payments.

The estimated revenues from Bill C-18 or the Online News Act have always been the subject of some debate. The Parliamentary Budget Officer set the number at $329 million, using a metric of 30% of news costs for all news outlets in Canada. Under that approach, over 75% of the revenues would go to broadcasters such as Bell, Rogers, and the CBC. The Canadian Heritage estimates were considerably lower, with officials telling a House of Commons committee last December that they expected about $150 million in revenue:

    I won’t speak to the PBO report which is the source of the numbers that you cited. That was not a department-led initiative. The internal modelling that we did when we tabled the bill and mentioned in our technical briefings was more around $150 million impact. That was based again in terms of how this played out in Australia and making some assumptions about how it might play out here. With respect to the PBO report, any questions about that particular number would have to be directed towards them.

By the time the bill reached the Senate several months after that, the number had grown to $215 million.

With the release of the draft regulations, the government has established a formula with an even bigger estimate. The creation of a formula is presumably designed to provide some cost certainty to the companies and represents a change in approach in Bill C-18, given that the government had previously said it would not get involved private sector deals but it is now setting a minimum value of the agreements. Officials told the media this morning that it believes Google’s contribution would be $172 million and Meta’s would be $62 million, for a total of $234 million. However, that may understate the revenues by focusing on search revenues alone. If based on total revenues, with a 4% minimum floor, the requirement would exceed C$300 million for Google. Either way, the number is more than 50% higher than the $150 million estimate the department gave the Heritage committee just eight months ago.

The draft regulations will also provide some additional clarity on several issues. The standard for a digital news intermediary has been fleshed out to include $1 billion in global revenues and 20 million Canadian users. As for the process, those companies subject to the rules are required to conduct a 60 day open call for negotiations. To meet a fairness standard, the resulting deals must be within 20% of the average and cover a wide range of news outlets. Contributions can include non-monetary items but it seems unlikely the resulting deals would grant links significant value. The CRTC would then pass judgment on the deals and determine whether the companies are exempt from a final offer arbitration process. The timing on this includes a 30 day consultation process on the regulations, before they are finalized prior to the December deadline. But with the CRTC not having established a bargaining framework before 2025, the liability issues start arising well before any deals are concluded or approved.

August 24, 2023

“Facebook has made a calculated business decision about the value of its fucks. These fucks are expensive. So they won’t give any.”

In The Line, Jen Gerson fought the good fight as long as she could, but finally had to load up the old shotgun and share both barrels with the participants in the ongoing clusterfarce over the Online News Act (the artist formerly known as Bill C-18):

Look, I’ve largely said my piece on the Online News Act: it’s poorly conceived legislation that risked terrible outcomes. It’s pointless, now, with those terrible outcomes unfolding, to say “I told you so”.

But the response to the news that Meta has decided to continue blocking news — even in the face of devastating wildfires in B.C. and the Northwest Territories — has been such disingenuous dumbfuckery from every corner that I have failed to bestill my cursed fingertips.

Let’s start with this quote from Prime Minister Justin Trudeau, who at a recent press conference, said: “Right now in an emergency situation where up-to-date local information is more important than ever, Facebook’s putting corporate profits ahead of people’s safety, ahead of supporting quality local journalism … This is not the time for that”.

Wait, a major global corporation that has been labelled as actually literally evil by both progressives and conservatives in recent years is putting its own profits and self-interest ahead of the priorities and values of politicians and pundits?

Sir, surely thou art in jest.

Is this government only now figuring out that major global corporations exist to extract profits; that whatever social corporate responsibility roles they may choose to enact, they aren’t a public service? Is Trudeau shocked — shocked, I say! — to just this very moment discover that Meta isn’t actually some combination of the Red Cross and Reuters?

I mean … welcome to the adult world, I guess, and please leave your copy of Adbusters near the coat check at the door.

But if Meta is as evil as all that, why did so few politicos or pundits anticipate that the company would follow through on its explicit threat to block news if C-18 were passed? This is like watching an Allied general who says: “I think these Nazi fellows are the baddies!” and then gets flustered when the guys with skulls on their caps pull out their guns and start shooting in the midst of afternoon trench tea. “Well, I never. That’s hardly sporting!” This is some Black Adder comedy, friends, and we may be on the side of the angels, but our angels also happen to be a little slow in the head.

Oh, but surely Meta wouldn’t block news to put their own self interest “ahead of people’s safety”, hmmmm?

With advance apologies, but is our antipathy toward Meta so intense that we’re going to straight-face pretend that AM radio, FM radio, emergency text alerts and broadcasts, municipal and provincial emergency websites, formal and informal social media networks and chat groups, and local news broadcasts with websites that can be accessed directly through web browsers all just ceased to exist, simultaneously, the very moment that CBC stopped being able to post news links to Instagram?

If Facebook is actually putting lives in danger, that’s an admission of impotence and incompetence from our entire communications infrastructure, including government, private and public media. It is an incredible and embarrassing self-own.

August 22, 2023

With Bill C-18 about to come into effect, there is zero sense for the “tech giants” to start negotiating

Filed under: Business, Cancon, Government, Law, Media, Politics — Tags: , , , , , — Nicholas @ 05:00

Michael Geist explains why there are no incentives for Google and Meta to begin any kind of negotiations with the Canadian government over the ruthlessly self-destructive Online News Act:

The rhetoric around Bill C-18 has escalated in recent days in light of the awful wildfires in NWT and British Columbia. In my view, the issues associated with these tragic events have little to do with Meta blocking news links and the attempt to bring it into the conversation is a transparent attempt to score political points (the connectivity issues with some NWT communities completely taken offline for days is somehow never mentioned). The reality is that Meta was asked about just this scenario at committee and it made it clear that it would not block any non-news outlet links. That is precisely what has been happening and the government’s legislative choices should be the starting point for understanding why compliance with the law involves blocking a very broad range of news links that extend beyond even those sources that are defined as “eligible news outlets”.

The government and supporters of Bill C-18 talking points now emphasize two things in relation to Meta blocking news links: the law has yet to take effect and there is room to address their concerns in the regulation-making process. Both of these claims are incredibly deceptive, relying on the assumption that most won’t bother to read the actual legislation. If they did, they would see that (1) the law has received royal assent and can take effect anytime and (2) the regulation making process addresses only a small subset of Bill C-18 issues with most of the core issues finalized. In other words, the time to shape the law and address many of the key concerns was before the government repeatedly cut off debate in order to ensure it that received royal assent before the summer break.

Start with when the law takes effect. As noted above, the law has been passed and received royal assent. It is the law of the land and there is no scope for changes or amendments without a new bill that must be passed by Parliament. Section 93 establishes when the provisions come into force. The law initially envisioned a staged approach whereby certain sections would be proclaimed in effect by the government in stage one, followed by four additional stages, some of which were contingent on certain regulations coming into force. Yet at the last minute the government approved a Senate amendment that basically discarded the entire approach. Section 93(6) states:

    (6) Despite subsections (1) to (5), any provision of this Act that does not come into force by order before the 180th day following the day on which this Act receives royal assent comes into force 180 days after the day on which this Act receives royal assent.

The entire law therefore takes effect no later than 180 days after royal assent, which is December 19, 2023. This change was included at the urging of the Canadian media sector (specifically Quebecor) which lobbied to have it take effect as soon as possible. Under this approach, the law can take effect at any time as the government need only issue the relevant Orders-in-Council. There is now little wiggle room. As of today’s post, the latest the law will take effect is in 120 days but it could happen well before that.

Once the law takes effect, the clock on negotiations and potential mediation and arbitration begins. The timelines are fixed in Section 19(1) of the law: 90 days to negotiate and 120 days for mediation. If there is no agreement and no request to the CRTC to extend the deadlines, the issue can go to final offer arbitration. To be clear, none of these timelines are subject to the regulation making process. They are fixed and they create obvious urgency for anyone facing compliance requirements.

The government threatened Meta and Google with mandated payment to Canadian news sources if their online services merely linked to articles or videos from those news sources. Meta and Google rationally decided that the tiny little Canadian market wasn’t worth the cost of paying CBC and other Canadian news outlets for the privilege of sending them readers and are in the process of obeying the letter of the new law and blocking such links on their respective platforms. They told the Canadian government that this is what they’d do if the law was passed in its current form, yet the government is pretending to be shocked and surprised that Meta and Google are going to obey the law.

After all, there’s no real risk that lives might be endangered because so many Canadians are used to getting their news by way of Facebook or Google, is there?

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