Zucks Can't Afford to Buy The NYT
Seconds and Cents Episode 15. Today we're going to talk about Facebook, we're going to talk about Twitter, we're gonna talk about them as publishers. So this is something that's relevant to my life through lead AI, through some other partner projects that we have. Just simply through any business venture that I have, where I'm leveraging Facebook, or Instagram or Twitter, in order to promote my business, promote my brand, promote whatever I need to promote, right. And there are 2 billion people on Facebook, there are billions on Twitter. Right. And so ultimately, the question here and this comes up quite a bit now that Jeff Bezos bought the washington post is could these tech billionaires, Could these people that control the algorithms that arguably control the minds of quite a bit of the American public and of the global public, could they buy the largest media outlets in the world? And could they control the media narrative? Could they control every aspect of what the public reads and fix? Right? Some things came up where there was a global event that would happen or maybe Why'd event that would happen? And all affiliate stations have a news of a media outlet, right? So every Fox eight or every CBS affiliate, or every ABC affiliate, or whoever it was, would read the exact same script, they would read the same script that the newscasters were told how their feelings were going to be. They were told what their opinion was going to be by the higher ups by the suits. And ultimately, a lot of people worry about, well, could this happen with Zuckerberg? could this happen with jack Dorsey? could this happen with the other people that really control the media? Like, is it bad that it happened with Jeff Bezos right? So we're gonna address all those things but first of all, we have to talk about our what our Facebook and what our Twitter and before I get started, I am not a lawyer. I'm not a copyright lawyer. I'm not a copyright law specialist. I am not your consultant or your advisor and copyright law, where my feelings were my definitions where everything comes from, is it comes from my collaborations with people in the media. My collaborations with people who work in copyright, my experiences with customer and my customers and my own research, right? So don't take this as legal advice. Don't take this as anything other than kind of knowledge to help inform and expand your own thinking. So could Facebook could Twitter could Zach's could Sheryl Sandberg could jack Dorsey become the media? Short answer? No. So let's define what are Facebook and what are Twitter. So Facebook and Twitter are aggregators of user generated content. That's it. So their simplest definition, we are aggregators of user generated content. So what's the first part? The first part is aggregators, right? So there are all sorts of different data points, all sorts of information points, they all converge into one product. That product is called the feed. The feed is where Facebook and Twitter make all their money because that's where they're able to sell ads because the eyeballs go to the feed because they spend a whole bunch of money making sure that Feed curates the content that's going to keep you on Facebook or on Twitter or on Instagram, the longest. So, the they are aggregators, they take all sorts, they take billions or trillions or quadrillions of posts every day, and of likes and retweets, and shares, and all these different things. And they aggregate all of those things into just what they think you want to see. They put all that stuff that you want to see on the newsfeed, or it's just what they want you to see on the wall, or what they think that you want to see on someone's Facebook profile, or on some of these Twitter profile, right? So they aggregate a whole bunch of content. Now, that's the second half part. So user generated content. They're aggregators of user generated content. user generated content means that I write a Facebook post, or I write a tweet, or I record a video and I post it on Facebook, or I record audio and I post it on Facebook, on Twitter, or I record a video and I put it on Instagram or a photo and I put it on Instagram, right? So all of that is user generated. content, you do user generated content, just like I do user generated content. Now, here's the kicker, I could post only the link to a Washington Post article, I put no content, I put no caption, I only put the link to a Washington Post article, and I post that as a tweet or as a Facebook post. And that is still user generated content. Why? Because the attribution to that link comes back to my profile my profile me, I am the one who is credited with posting that link. I'm the one just like I'm the one who is credited with posting a status. If I wrote a five paragraph status update, I am the one who is credited with posting the link, even though the content is to a Washington Post article. And that is the whole kind of essence of why Facebook and why Twitter can never become the media. So let's talk legally. What are these? What are these businesses referred to? Well, they're referred to as platforms. platform businesses, mean that basically they give a people the opportunity to do something, right they give people the opportunity to post content and to view content or to build a product and have other people buy a product, right. And so they're legally referred to as platforms. Basically, a platform means that they create the space for you to do something. Airbnb gives you the space to be able to rent a room in your apartment or to rent your apartment or your house, right? Uber gives you the space to be able to get a ride on demand. Uber is a platform Airbnb is platform Microsoft Office, Microsoft Office gives you the space, right to write a book, or to use an Excel spreadsheet or to do PowerPoint and to use all these tools to build your business. Right. So Bill Gates would not refer to these to Facebook into Twitter as platforms. The law refers to them as platforms. So where we'll talk about Gates's perspective another day, but for this case, yes, there are platforms. So let's talk about why How does copyright law work for these platforms for these aggregators? Well, I'm reading here from section 230 of the communications decency act. It says, quote, no provider or user of an interactive computer service like Facebook or Twitter shall be treated as the publisher or speaker of any information provided by one by n. go backwards. No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. What's that mean? Basically, that means when I post something on Facebook, Facebook is not liable for the things that I set. It means that I am liable for the things that I say, when Washington Post publishes an article. They are liable for the things that they say. The when the New York Times publishes an article they're liable for the things that they say when cnn posts a new site.
When Fox News posts a new segment, they are liable for the things that they say if they say something slanderous, for example, they are liable. Somebody could take them to court for slander. If I say something slanderous on a Facebook post, I could be taken to court for slander. Facebook, however, could not be taken to court for slander. Why? Because Facebook is just providing the outlet for me to be able to create and share content with people who want to see it, right. So that's the platform part of Facebook and on Twitter. I can create content or I can create this, I can tell whatever I want to tell, I can say whatever I want to say, and I can post it to Facebook. And Facebook legally is just the medium for which a lot of people can see my content now. Does a Facebook status update from my facebook account operate any differently than or from my business Facebook account, for example? write any differently than a blog post would on my business's website. The answer's no. Does it operate any differently than anything I say in this podcast? No. Does it operate any differently than anything I see, I'd say in a public speaking engagement. No. Ultimately, I'm the one who's saying those things. I'm the one who's absorbing the liability of the things that I say. Now, by my posting on Facebook, I am simply sharing the information. But I'm not speaking for Facebook. And that is the key. So the key here is that Facebook and Google and Twitter and these big content aggregators, they are not voicing their opinion. Now. xox went in front of Congress a couple years ago after the 2016 election, and he was grilled by Congress people. Well, are you speaking for the people? are you sharing your opinion by hiding and by promoting certain things in your feed? That's a conversation for a different day. My guess is the answer. Probably not. My guess is if you actually look at the information that's being posted to Facebook or posted to Twitter, right? It's they're probably not promoting a certain message over others, they're probably not doing anything that would speak on behalf of Facebook. Right. I don't think that they're necessarily doing manipulating the feeds and manipulate the minds of the public to believe one certain political ideology or another or belief one bit of fake news over another. Right. I think, ultimately, their algorithm is optimized to keep people on the platform they Facebook wants to keep you on Facebook, Twitter wants to keep you on Twitter, right? And that's just what the data sets, but podcast for a different day. So copyright law, if I say something on Facebook, or if you say something on Facebook or on Twitter, right, I am the one who is liable. Just like I am liable if I say something wrong, or slanderous, for example, on my podcast or in my blog. So Why is it that Facebook and Twitter would never ever ever want to become a publisher? Well, that's because of copyright violation. So because I could post a Washington Post article, or better yet, because I could take a Washington Post article, I could copy, copy all the text of the article, and post that as status, which does happen. People take a Washington Post article, or they take a newspaper article, they copy all the text of the article, they post it as their own status update, they might say Washington Post, right? Or they might credit the author they might not. But because I could do that. If I did, and if Facebook were publisher, then Facebook would be in copyright violation. Now let's take it to images because I can share any image that I want to write. I technically if I share an image that I don't own, I am in violation of copyright law now it can be extremely difficult and tedious for lawyers to come find me to sue me for however much they're going to sue me for for copyright law. Now does this happen in in some situations where somebody shares a photo that's not theirs the photo goes viral the person gets taken down or taken to court, yes, that does happen. But um, with the number of times that any particular photo can be posted or any different particular article can be copied and pasted.
Right? That is a lot of effort for not much reward to the person who actually created the content, right, but that that person who created the content is still being stolen from technically, they are still being stolen from and if Facebook if Twitter was a publisher, if they became the media, if they for went section 230. And they said we want to actually share our opinion On any issue, where we want to be credited with the content that we create, and air quotes, we want to be credited. then ultimately, every photographer, every journalist, every author, every artist, any person who creates content for a living, could sue Facebook and could sue Twitter for other people's posts. Remember the definition of what are Facebook and Twitter. They're aggregators of user generated content. If the liability of the content left to me and went to Facebook and Twitter, those two businesses would go under overnight, because there would be so many copyright lawsuits from creators from content creators from Video Creators from everybody that didn't provide credit back the way that it was supposed to didn't provide royalties the way that it was supposed to where people stole content and they put it on Facebook, if Facebook and they and Twitter ultimately
absorbed the liability for all that content, they would go out of business quite literally, overnight, they could not pay the court fees and the fines and the settlements fast enough to be able to make the money back on top of that they would lose a significant amount of their content. Does that say that Facebook and Twitter are just content providers or content posters? They're platforms that only specialize in copyrighted content? Absolutely not. Most people have no idea that they're breaking copyright law, right. And Facebook and Twitter aren't in the business of upholding copyright law to some degree, meaning they aren't in the business of saying, Oh, hey, you actually didn't post your status, right? Because you have to credit the author inside of the actual status. That way, if people don't click, they can still see who wrote it, right. Like they're not in the business of doing that. And nor should they be to be honest with you, because ultimately
On the onus is on the individual who's posting the content to properly credit the way that they're supposed to. Okay, so let's move forward. And let's talk about Jeff Bezos. So why can Jeff Bezos buy the Washington Post without recourse and why can Xbox and jack Dorsey not do that? That's because Jeff Bezos on Amazon. Amazon is not dealing with user generated content outside of product reviews. Right? So because Jeff Bezos does not deal with user generated content, because he really doesn't deal with the media at large. He's not dealing with information flow outside of product reviews. Right? he operates in a totally different space than Xbox and jack Dorsey do now you could say, well, is Amazon a platform business? Absolutely. Amazon is a platform business. Would they fall under Section 230? Yes, technically, if I went on to an Amazon post, or an Amazon listing, and I put I broke copyright law as my product.
review in the listing, like I could do that. But ultimately, Jeff Bezos, his entire business does not fall within anything that Mark Zuckerberg or jack Dorsey, who is the CEO and founder of Twitter falls into Jeff Bezos. His business is not information. He is selling products. He's selling third party products. He is aggregating users to buy stuff from Amazon. He is doing AWS he is doing transportation logistics he is doing Amazon Alexa and all these other things, right. And so Jeff Bezos doesn't really play in the same field that Mark Zuckerberg and jack Dorsey does, which is why he can buy the Washington Post for $250 million cash. Let's put up a second example. Marc Benioff, who worked under Steve Jobs at Apple kind of in the early days of apple. And then about maybe 15 or 16 years ago, he started a company called Salesforce, which builds sales CRM software, right? He spent 100 $90 million and he bought Time Magazine. Well, sales CRM software and sales management software isn't in the information flow business. It's not in the information aggregation business like Facebook and like Twitter and right and so he can buy that no problem. Because ultimately, he's only in charge of one thing. And Jeff Bezos is only in charge of one thing. And this is the real key. Mark when often Jeff Bezos can control what the Washington Post and what time magazine say, and they can be held liable for The Washington Post and for Time magazine and for the editorial that they create. But because Jeff Bezos and Marc Benioff do not control the spread of the information outside of their own website, and their own print publications, because they do not control the largest social media outlets in the world, they can do this and have no legal recourse unless somebody posts like publishes
something absolutely ridiculous on Washington Post or on time, which probably wouldn't even happen anyway, because those two businesses are well run businesses. Right? So sucks and jack Dorsey would lose their entire fortunes, their businesses would go overnight if they became publishers, because they would be absorbing all of the copyright liability for everything that is posted on Facebook, including what I say, including the things that I say in my podcast, things that I say on my blog that gets shared. They're not going to do that, right. And so Facebook and Twitter and these other aggregators, you can argue Google spend fortunes, making sure that they do not become labeled legally as publishers if they do, they go out of business. That's the key here. That's the key. So let's look at let's look ahead and let's because, you know, the big tech companies are going in front of Congress this week, they're going to talk about and I trust. Last week, we talked about Tik Tok and kind of Well, what's what's the status of Tick Tock? What's the tick tock situation? Really, by the way, India just banned another 47 Chinese apps. So will that happen? The United States It remains to be seen. But it's really interesting that India just continues to ban Chinese apps, Chinese services, they continue to control the amount of information that's flowing into and out of China. So kind of what's ahead here, because the news media has gotten a lot of their revenues, a lot of their profitability eaten up by Facebook and by Google, because the advertising what Facebook and Google, right Facebook and Twitter share are are the primary referral sources for a lot of media outlets, that the primary way that a lot of people see the media is content. Now, a lot of people are abandoning going to newyorktimes.com or Washington Post com right. And they're heading towards just going to Facebook and seeing what their friends reshare. So what's, what's next here? Ultimately, I think Facebook and Twitter and Google And these other large platform aggregators, they really understand the value of the media. I think the media understands the value of the platform, and the platform understands the value of the media. On top of that some ridiculous percentage, like above 30% of all content on Facebook involves a media link, and involves a link to the New York Times Washington Post original source or anybody else, right. And so I think they're going to work in symbiosis with each other. Where To be quite honest, Facebook and Twitter and Google control much of the internet. I think, the media controlling much of the global conversation is going to partner up with with the internet, you can already see it. Facebook gives out grants to newspapers, to media outlets, Google gave up has 100 million dollars that they're giving out, I think annually, but at least this year in 2022 media outlets to help build sustainable business models. I think over time, they're going
To be in a positive feedback loop. I think what people are confused about right now is because the media's profitability has fallen by so much because we fell so quickly into a clickbait economy, that people think that Oh, Facebook and Twitter, the next logical step is that they're just going to take over these large media outlets. I don't think that's the case. Because I think ultimately, those platform aggregators need the media just as much as the media needs those platform aggregators. And so I think over the long arc of time, what you'll see is you'll see a lot of media become subscription based. And you'll see that the shared content on these platform aggregators will be used as a really strong reader acquisition customer acquisition tool to drive subscription revenues for the media. And the media. And the platform aggregators will not be in competition as much because the media won't be totally reliant on these platform aggregators like Facebook, Twitter and Google for their advertising revenue for their profitability. So that's pretty much everything here as it relates to how Facebook and Twitter will never become the media, how they could not afford to become the media. They quite literally cannot afford to become the media, how my guess is one of the things that keeps Zuck awake at night is making sure that he does not get labeled as a publisher, making sure the news feed algorithm or the Twitter algorithm isn't favoring content in a way that could cause like one kind of two year term in Congress to label these these companies as media publishers instead of media aggregators. So I'm excited about this topic, we will continue to dive into it because I think as the media evolves as these platform aggregators evolve, the symbiosis that I expect will happen between the two is going to unfold in real time. The conversation is going to start to shift here soon about, well, what subscriptions are you buying, and how are you getting them And so we're going to be talking about this more but have a great day and we'll chat again soon.
The above is an AI transcription of Evan’s Seconds and Cents podcast.