Troy1: Will your lifestyle get better when you move to Hungary?
I'm thinking of moving to Hungary except for the,
you know, the government.
There's not much but better.
Yeah.
Nick: Who, who, who's Fasc guy?
Brian1: The isn't Orbin Orin's kind of like, he's like a quasi authoritarian, isn't he?
Nick: Uhhuh.
I mean, I guess you, y'all would know all about that.
Brian1: All right.
Let's get into it.
This is a very special edition of people versus algorithms.
Alex Schleifer had a hard stop, so he couldn't make it, but we've got Nick Denton.
Brian2: Who may or may not have just sold his lovely apartment in soho And is moving to Budapest.
Nick is the former CEO of Gawker Media founder of that.
Probably an iconic, I would say it was like an iconic, that's, that word is overused, but, you know, it was one of the defining, media properties of the last era of digital media.
I, I always thought there was, there was Buzzfeed Envy, and then there was Gawker Envy.
That a lot of people in the industry had, and I think sometimes, like we lose sight of the fact that, you know, Gawker was early to a lot of
the
trends that, that were sort of
speed running right now.
I mean, it had the authentic
voices.
it.
was a network of niches, had a tech infrastructure that was participatory with, with Kenia, and it moved aggressively into commerce, which is Troy's darling.
And now, you know, this
media industry is, has just been swallowed by what we call the information space.
It is basically viral Twitter accounts.
It's, outsiders that have Political agendas.
It is openly partisan.
It's all kinds of different things.
It's both exciting, but it's, also a little bit scary.
So wanted to have, have you on
Nick to talk about all of this Troy, how would you set up this conversation?
Troy2: I would set it
up, in a way
I'll try to maybe not flatter Nick too much.
I remember when I was at Hearst and
David Carey
was a big fan of,
yours.
Nick,
and I think among the executive ranks at
Hearst, there was
great admiration
for what
what Nick had created at
Gawker.
And, a desire, even if they didn't really, you know, like that old line,
everybody wants to go to heaven, but no one wants to die.
A, a desire to try to kind of find some of the Gawker magic inside of Hearst, which was a.
Nick: which was a,
Troy2: You know, a, a, a huge, transformation from,
you know, this kind of deeply paternalistic
print,
sort
of holding company to, to something that resembled Gawker.
But when I met Nick, I remember
coming to the
Gawker office and talking to you a couple times, Nick, and what I saw was everything that, that I kind of admired in digital media at the time, that I thought was sort of
the right formula where
it clearly you
had.
You know, the aspiration.
to build longstanding media brands.
You had a kind of rabid high metabolism
editorial team, maybe a little too rabid at times.
Nick: we'll get into
that.
Troy2: Yeah.
But, but you know, certainly understood the distribution mechanics of digital media.
It's important to
remember that like, you know, I was
dealing with with.
With editors that had really no
sense of what it meant to be connected to audience.
So like magazine editors are notorious, notoriously detached from the realities of what it doesn't matter what their audience thinks.
It matters what they think.
and then you had this
analytical system, whether or not that was inspired by Jonah or not, but like that fed them.
sort of performance insights and it re resulted in, they
were big sites, you had big traffic.
The other thing I admired always was you, you seem to find the right balance of
Monetization and audience experience, right?
You never did what a
lot of people did, which is sort of
fed the audience to the wolves
and, and so that was admirable.
And then you, you did again, what a lot of the sort of consolidators or
aggregators or portfolio media companies wanted to do, which is you had a
single sort of, platform that
was templated.
And I Remember at the time having these, like unbelievably
drawn out long arguments about whether
a single system could serve
L and Harper's Bizarre simultaneously,
which is
just like so
maddening and so frustrating, such a waste of
energy.
And then every time I talked to you back then,
You were obsessed with Kenia.
Now maybe that was just me reading into it, Nick, but
I saw in that
That
you
were a systems thinker
and you
realized that.
like a lot of the aspirations of, of, of a handful of media entrepreneurs that you wanted to find the intersection of
technology
and media that would give you
a little bit
more of a moat than, than what the sort of
treadmill of,
digital media would've otherwise
given to you.
And so you,
wanted to, to
find a
way to get.
Sort of self-sustaining ecosystem with the audience kind of involved.
And community media was always the idea.
So I, I fucking loved what you were
doing.
and then I, I gotta tell you, as a guy who sort of faced,
you,
know, the pressures of cancellation, I guess that's a maybe one way of framing it,
Nick: it.
Oh, what, what, what, what was yours?
Troy2: Well, I kind of got
on the wrong side of the union and stuff at Hearst and, and you know, Ben
Smith kind of went after me in
Brian2: Oh no, we're not gonna
Troy2: a bit.
So, but, but let's not, let's not get into it.
Brian2: Well, that's for the second half of the
program.
Troy2: Yeah.
Nick: Just to tell you, I, I wasn't even particularly
aware.
Troy2: Yeah.
Yeah.
Which I, which I love about it but, but you could have been like, incredibly bitter about the
Peter Thiel thing.
You contextualized that moment to me with grace and
kind of frame it in a way that I, I don't know.
I just love how you think about it
and
Nick: did, he
did me a
huge
favor.
he did me a favor
that
I, I, I'm only now
beginning to comprehend, what a, what a huge favor he did.
he
did it for me.
Troy2: Well, you probably wouldn't have got 140
million for the company if you sold it when
Nick: it.
Troy2: to
sell it.
Nick: Well, I mean, I mean, I, I had an alibi for
selling.
Troy2: Yeah,
Nick: You know, if you're founder selling is always
very difficult because why are you selling?
Troy2: right,
Nick: What, what, what is it
that you see that other people do not see?
and
so if, if you're actually making a a, a free will choice to
sell, you're immediately
in a weaker, in a weaker position, you know, you, you immediately have an explanation to give.
So he, he gave, he gave me a, a pretext, he gave me a, a reason
to sell.
I've, I've said, I've said this before, but I was relieved when gorka.com was
shut.
It, it, it was, it was time.
I, I, I wasn't able to do it
myself.
I. I did fire half
the staff in 2015 and bring it to Heal then.
But, but I, but I hadn't
shut it down.
And I probably should have shut it down just, just for sheer business reasons, just because there was Gizmoto
and Life, er
and Kotaku and these other incredibly valuable, extremely successful, highly profitable
sites, that were being dragged down by this,
political, jihad that was taking place within Gawker And to a lesser extent, Jezebel.
Troy3: Nick, where I was going with this is
interested in if, if, if Gawker to me Sort of represented
all,
the things that.
You know, media shifted from being kind of supply led in the magazine era to being demand led in the internet era,
and it.
meant all the fools rushed in.
So it was endlessly competitive, obviously.
And you
know what it meant was, I was
I was having breakfast with the magazine editor this morning and she was like, well, you know, the moment you
shifted the business.
from being, you know, what used to be the civility of print to where we all had to kind of grind it out to get audience every day, everything changed and it felt really, really, really relentlessly hard.
But if that was,
so, so we, we, you know, everybody that was kind of trying to build stuff and that era wanted
to build,
you know.
the economics, the efficiency, the incentives, the kind of data structure, community involved, all the things that
Represented
g the Gawker moment.
And what
I, I'm interested in
is, is is kind of like.
Do we ever have a kind of sustainable media system moving forward?
I mean, we still read the New York Times and I still read, you know, a lot of, you know, the Atlantic or whatever you're reading, but like, they all feel so fragile right now.
And is is there, is there a model, you know, in the future?
And, and I think that to me, without asking too broad a question that doesn't
really have an answer to me.
There's something happening that, which a lot of people don't see, which I think is built around the idea of audience participation.
And
it has to do with really interesting things like prediction markets and AI
and how they're gonna sort of change the way we interact with information and our, and the models we have of assembling people to build audiences is really far from where we end up.
Nick: WW where, where do you want me to start?
With the past or the present?
Brian2: present and future.
We can go back to the past later.
Troy3: But yeah, with reminding us of, of how the past got us to the fu gets us to.
Brian2: Yeah.
Nick: So trying to analyze myself, which is hard.
I think I've, I've always seen the, community was the, was the real thing, was the, was the core of the thing.
And media is just one of them means by which you draw people of a certain kind.
In, into a community.
And, and so that the, the original Gorka business, you know, whether it was a talent spotting business or whether it was a media management business with measurement tied very, very closely
to comp compensation and a very simple feedback mechanism for riders to, you know, maximize, well, first of all, page views well before buzzfeed, by the way.
And then later influenced by Buzzfeed, tied to uniques.
So, so there was that side of Gorka.
But, but the, I mean, the core, my core interest was always in creating a space for people to discuss and to build upon.
Articles to, to make new stuff out of the, out of what was already there, out of the, out of the narrative that was already there.
And, and my belief was also that that couldn't just simply be a, an ideological echo chamber, that that was boring.
That, that, that was not, that, that wasn't the essence of a good community, a good party, a good event for, for a, for that to be a good event.
You needed a mix of people and they needed to be able to discuss stuff and argue, and for that argument to kinda get, rough at times.
But, but for that all to be part of, part of the community.
And so, so that was always probably, has always been, my, my focus when it comes to systems design is like, is trying to create an environment in which people are drawn out of common interest.
But they're actually able to, to argue and discuss and joke with each other and kind of have, have fun, learn and have fun.
Troy3: In in those days when you were building Kenia, were you the sort of product inspiration behind that?
Were you pushing the teams to build that?
Nick: Yeah.
That, that was all me.
Troy3: How would you have described Kinia to someone?
I guess it's at its most basic, it's a commenting system.
Nick: Yeah.
The, the idea was simply that it was a, it was a com commenting system in which it wasn't a free for all, but it, in which the person who had put up the original comment, the thing that had got
gotten the response, or the author of the original article, would have control over which comments they would respond to and which would be displayed prominently.
And so, yeah, it's not that different to the way the Twitter comments are organized, except the Twitter comments
actually also include all of the, the junk at the end, the stuff that didn't get any replies by the author.
Brian2: and they were really high quality.
They were additive.
And this was at a time when, you know, internet comments were, I mean, I compare it to, to entering like a porta-potty.
You, you know, you don't look down like there's nothing good on the page when you look down on the comments and Gawker's comments were additive and throughout the, the different properties in Coer
Nick: I, I, I, I mean, I was, I probably, I probably started to compromise around 2000 10, 11, 12.
but I was a perfectionist, a perfectionist publisher, that I, I, I couldn't stand the idea that there would be, such idiocy on my pages.
So I I I, I couldn't bear the idea that we would actually have dumb, dumb comments or, or that the sicker fans would win, or, just the, the pure idiotic trolls.
You know, you, you, you, you talked about how, you know, concerned we were about the environment.
You, you know, the moment when I kind of gave up emotionally on Gorka, it wasn't, I know the impending trial or the suspicion
that Peter Thiel might be behind this legal campaign or the unionization of, of Go Curve, although that didn't help.
But it was actually, I think it was the moment when I had to, sign a contract without Brain.
I think it was, whatever those junk list junk links.
Was it Tabula?
Maybe it was Tabula.
I can't remember.
Brian2: They're the big two, although our
Nick: I like those guys revolt me and I, I revolted myself, uh, for, for, for, for putting that junk on the page.
You know, when, when we had, you know, plenty of interesting discussions to put up there, you know, we, we didn't need to interrupt anybody with a bunch of irrelevant links.
But whatever the internet is as it is.
Troy3: So how does that connect to the future in your mind, Nick?
What, how, how do you think about the model for the future?
I'm, I.
Nick: I mean, I, I still think discussion is, is, is where it's all at.
I suppose you could include podcasts in that.
TWI Twitter gets interesting when, when there's a discussion.
There was a little exchange between, was between Matt lazier the center centrist.
Economics and political writer, and Joe Lonsdale, who was kind of, kind of part of the teal group.
And there was a thread in which they were, they were basically agreeing a hundred percent that, you know, America was abdicating its empire, its imperial responsibilities.
You know, it was allowing the system change to happen without even a fight.
Like complete agreement between people who were sort of, at least nominally in opposition to each other.
And, and that like, that, that's the kind of thing that you still pretty much only see on on Twitter.
So TWI Twitter is still, I think, where the action is, as far as I'm concerned.
Troy3: Ezra Klein agreeing with, Elon Musk.
Nick: Uhhuh, there's a, there's a big sway from kind of know right wing social democrat, you know, through to neo reaction.
Troy3: Well, the whole book abundance is, you guys are right, except don't be assholes about it.
Nick: And, and they say this after 30 years, after 30 years, they wake up and say, oh, oh, maybe housing is an issue.
You know, or, or, or maybe we need a connected up regional transportation network to bring people from the housing to the jobs,
Troy3: or
maybe our form of government doesn't work, but we, we can make it work.
Nick: the most pathetic thing ever was seeing Pete Bud, however you pronounce his name, a after the election, talking about lessons learned and where the Democrats
go from here and, and saying that, oh yeah, I think Ezra Klein and Mattius had some interesting ideas on Hauser.
I mean, no kidding, but, but, but the, but the fact that you're just, just now waking up, you know, after administration, after administration, of overspending and
irrelevant wasteful government action, like, and now you're waking up to the abundance agenda, you know, way too late.
It is irrelevant.
Brian2: Yeah, I, I'm interested in like, when you're talking about conversation and it being, you know,
on x, you know, it might not be the, the best quality conversation sometimes, but it, it, it happens.
Can media, can institutional media, for lack of a better word, serve that role anymore?
It seems like the, the sort of abdicated that, I mean a lot of, a lot of properties ab abdicated their, the
Nick: think, I think the New York Times comment, I think the New York Times comments are meaningful.
You know, it's a, it's a, it's a pretty good bellwether for, you know, moderate liberal opinion.
The new New York Times comments and, you know, just the, the change in the New York Times comments on, say trans issues.
Has been, kind of, kind of remarkable.
So, you know, they, you, you can kinda see the Democratic Party mainstream moving on some of these issues if you, if you follow them.
But yeah, beyond the New York Times comments, I'm not really sure what true discussion platforms there are.
Troy3: did you talk somewhere, Nick, about your love of using AI to kind of cast scenarios
Nick: Uhhuh.
Troy3: Brian, I want to try to connect two thoughts here.
'cause Brian is kind of, of the belief and he said this, the day that it launched that poly market was really future media.
Are you, are you familiar with you, you know,
poly market?
Right.
And,
and that this notion of, you know, the, you know, of
course.
the internet made media two way, and of course we're more engaged when
we get to be, you know, in the cast Right.
And comments make us part of it.
So it's kind of natural.
It's as close as media gets to gaming.
Nick: right.
No, it's, it's not as close as it can get.
Even
Troy3: well, it gets closer in prediction markets is my
point.
And it gets closer in sports betting and it, it, it gets closer.
I mean, arguably the whole creator economy is a manifestation of that same idea, right.
That
we're all part of it.
And I was reading with interest, you talking about scenarios I want, is that media
Nick: Well, lemme just tell you what I do.
So I, I trade as, as a thing you see from the bio on my account.
I trade stocks, shorts long, typically,
Troy3: Did you hit the Tesla short at the right time?
Nick: One of them at the right time.
Two of them are looking at underwater right now, but, there's a lots
of, a
Troy3: hit the apple short too, right?
Nick: a Uhhuh a lot.
There's still a lot to play out.
Look, I do what any business journalist would do.
You know, I was with the Financial Times, in the Eastern Europe covering emerging markets, derivatives.
Then technology.
I was value wag.
That's probably the more important part of my biography than being publisher of Gorka.
Certainly for my current incarnation.
You know, I, I, I was actually value wag.
I wrote Value Wag, in 2007.
It was the summer,
Brian2: Like I remember you moved out there
Nick: It, it.
was about It It was like, I think it was eight months in
total.
Without wanting to boast too much, the, when I did it, it, it was on everybody's screen.
So, and they were all riding in, you know, with, all of them, you know, Andreson, Musk, the whole dam, cast
of characters all riding in with their tips and their arguments and their grievances and all that kinda stuff.
It was very easy, to put oneself in the middle of the information flow.
Then, So, electric cars, this is kind of how I came into all this.
I, I was kinda, I was into the SU seven, the zmi, SU seven, it looked, it looked cool.
It had a kind of inoffensive Porsche style design.
And the specs and the cost were like, it was just like off the charts in terms of where it ca, where it came in, you know, $27,000 for a, like, top of the line kind of Porsche equivalent.
Troy3: A super Car?
Nick: Well, the ultra is a supercar.
And, and that's a bit more expensive.
That's whatever, 70 to $80,000 in, in China.
But, you know, this is a car that is not, not made by cheap labor, but it's made in a, in a completely or very, very highly automated factory.
Not even by a car maker, but buy a phone maker, you know, on its first, its first outing in the auto market, and it comes out with, you know, it comes out with
this, you know, and then you compare it against Tesla and then you start to do the questions like, you know, okay, that's BYD versus Tesla, Tesla sales in 2030.
Let's, let's take conventional wisdom.
Sometimes I would starve the AI of information.
So I, I would, I would turn off its web search and just have a look at its 2023 knowledge base.
I. And just gonna gimme the conventional wisdom on where BYD is going and where Tesla is going in terms of sales.
And then you start to drop in little facts, you know, sort of, oh, oops, oops, Roman salute, uh, that's not good for European sales.
Germans still a bit sensitive about that one actually.
And you know, so you, you drop in these new little bits of information and then you see the projections change.
And, you know, when I was getting to a 10 to one ratio of BYD to Tesla, forget about Zami and Neo and all the other Chinese manufacturers, but BYD to Tesla 10, 10 to one in 2030.
And then looking at the relative stock prices, which I, I think is now five to one, I was maybe eight to one when I started all this.
So you look at that and that looks like the most obvious trade you've ever seen in your, in your entire life.
And, and the most argue, most obvious argument that you could ever make, in a financial newspaper.
That's, you know, Tesla relative to BYD on a medium term, say five year time horizon, looking, you know, Tesla is extremely overvalued in relation to BYD.
Troy3: Or, or
Nick: come and argue with me
Troy3: the narrative written.
Another way.
The Chinese inspired collapse of the global car industry creates a Nazi renaissance.
As the German automotive industry collapses,
Nick: Okay, now, now you're running ahead with the story a bit.
Troy3: I mean, it's not, it's not that hard to believe.
Nick: the, my, my story actually has Elon on Mars, that the, that the Chinese are magnanimous enough and wise enough to give America its victories.
Give it Greenland, you know, like, let, let, let America take Greenland.
It, you know, needs something on the map to show that all this dismantling of empire was actually worth it.
You know, let it, let it have its North American bastion, you know, let it take Cuba, you know, it's, it's gonna need, America's gonna need to
Troy3: Not Canada, Nick.
Nick: I, I mean, I, I'm, I'm guessing Canada would be surrounded on three sides by Alaska.
Greenland and the mainland United States, so that, that that room for maneuver is gonna be limited.
But, but yeah, I'm assuming that they don't occupy Canada.
But green Greenland is another matter.
Greenland wouldn't be too, too difficult.
And then Mars, you know, a wise Chinese leader would let the Americans do as they have done since, like, their ancestors' time.
You know, when the, when the going wasn't that good back in your home, consonants on your home planet, you know, you up and you leave, you know, you cross the ocean,
you cross into planetary space and go and set up a new civilization, a new branch of humanity spreading forth into the starts.
So, so I, if you wanna go novelistic here, that's, that's the end of my novel, you know, is that humanity does split and the, and the Americans go off into the, into the void, to pursue their own future.
Brian2: It's possible.
So how does this intersect with media?
Not, not this part, but like the, what we're talking about with, you know, trading on information because, you know,
there was, there's been hints of this, this things like Hunter Brook and media's looking for a better business model.
Ads have
Nick: do you, what do you, think a, what do you think an investment is?
You know, like, what do you think a stock purchase is like?
There's a memo.
There's a memo, and, and the, and the memo goes, you know, here's why BYD will, in our belief, be worth more relative to Tesla in 2030 than the market currently recognizes.
You know, here, here is the argument.
Here are the branching counterarguments.
Here's the thread, here are the sub threads, the comments if you, if, if you
like.
And, and the, the whole thing together makes up a, a tree.
It's a knowledge tree.
It's an argument tree, an argument tree that the AI is actually pretty good at understanding.
You know, it thinks in these terms too.
It thinks in, in spatial terms.
It sees the argument, you know, as, as some kind of, as, as some kind of network.
And so if you allow the argument to be expressed as that kind of, as that kind of network, well, first of all, it is pretty easy visually just to see which narratives look plausible to you.
A human being, an intelligent human being, you know, who's well read, you know, has read The Economist on the Financial Times and, you know, certain select, Twitter accounts for, for long enough.
You know, we'll be able to tell what's plausible or not, and that AI will be able to help, and understand the issue better having seen this structured argument.
And so my, my theory is that actually there's no real difference between.
Media and investing, or to that matter, I mean, the line with software is pretty blurry too.
So, so even to, even to talk about a media industry, as, as some kind of distinct thing makes
Brian2: Yeah, but it's also, it's a better model, right?
Like it's a better model than getting people, to webpages to put,
to put
ads in
Nick: ads in front of.
' Brian2: cause you're basically,
Nick: I'm certainly finding it a lot more fun,
Brian2: but you're basically like, you're, you're injecting a meme, like, and memes like are, are consequential.
I like, I've like, they're consequential.
I feel like, as, as to how the, the whatever this media system, if it is a system, how it works, like memes.
Nick: I mean, I don't know actually, because like the, the, the China, China Hagerman meme, you know, the China will win.
In, in the industry.
China will win like that, that meme, I mean, it's been going around on the internet a a bit.
You know, there's the Xi Jinping meme, you know, do nothing win.
You know, there are the cyberpunk cities, there are those memes that go around, you know, now you've got black influencers marveling at high speed trains and, and cities and su sevens, in China.
So you, you have those memes that are, are going around.
But in terms of like, you know, who's on the China train, like right now, I'd say it's, me, gls, as of maybe a couple of days ago, Balaji of asin, I mean Ray Dalio obviously for quite a long time.
But we're talking about individuals here.
We're not talking about any institutions.
You know, the, the, the moment when the Financial Times or the Wall Street Journal or the Economist will.
You know, suddenly put their institutional weight behind.
An idea is like never, like they, they, they never put themselves out on the line like that as institutions.
And which is why, you know, if you really wanna be ahead of the markets, you have to follow individuals rather than institutions
Brian2: Was Wirecard.
like publicly traded when?
When the FT took it down?
I mean, that would've been great to trade
Nick: trade against.
they came out with some, some apparent discrepancy in the Tesla books, but then maybe walked back from them from that, angle.
I mean, they, they're definitely looking, I mean, every, everybody's looking at Tesla now.
So, you know, if you're, if you're a business jour, if you're any kind of business journalist in this world, financial journalist, business journalists, industrial journalists,
automotive journalists, if you're, if you're anywhere close to any of those fields, like, you know, this is the greatest story there ever was.
You know, like rise up of, out of your slumber like I did, because the, because it doesn't get any better than this.
This is, this is absolutely epic and it's playing out, you know, right.
On this phone that I'm looking at right here, you know, at the end of this call, I'll just go and I'll switch back into whatever Elon is saying since his emotion last night.
Brian2: Troy, how does this intersect with how you're looking at, you know, where the media industry in quotes goes because I mean, we talk all the time.
It's like media itself has never been more plentiful and more powerful in many ways.
Yet at the same time, this sort of institutional media industry is, like Nick
mentioned, it's leaking power to individuals.
Troy3: yeah, it makes me think a lot of things.
It makes me think that, first of
all, so, so Nick is the equivalent of a high
powered programmer.
In the media context, right?
And, a high powered programmer doesn't like a lot of distance between their thoughts and the metal of the machine, right?
Like they wanna write assembler code and, and so you go to where the conversation is happening, right?
You go down a level in media.
That is not to say that you still don't need an interpretive layer on top of Elon Musk and, you know, whoever Matt Glas and all those people to make it understandable to a lot of people.
It's just a smaller business.
And I think that, that, that media is, is vitally important.
I think a couple things, have, have happened.
Is that broadly speaking, I don't think prior to, say two years ago, we ever spent as much time questioning, the veracity of what established media was saying and
the amount of interpretation that goes through an ever, through every headline, and therefore the amount of bias in it.
And so there, I, I think that there's a healthy sort of like questioning now of the system by which we used to get information.
It may be more chaotic, it may lead to like, you know, unfortunate outcomes, but I think it's really important.
What it makes me think about as an investor, is that I, for the most part, I think that digital media, and I really, I didn't ever want to admit this before.
I think it's incredibly hard to win.
You just can't win the game.
Like Jonah couldn't win the game and ultimately Nick never won the game.
And because there's no protect, because distribution is,
Nick: It's, it's the wrong game.
Troy3: it's, it's the wrong game.
Distribution is destiny and you
can't.
The only way that you can control distribution is if you have the power of network effects and platforms, and those don't really sit alongside, you try to do it with Kja.
They don't sit alongside media particularly well.
Nick: Look, I, I I think we had it, we had it for a few years.
We had it from maybe, maybe 2006 to 2012, before our discussion environments got, got swamped, you know, swamped by Facebook and Twitter.
You know, those niche discussion environments.
That definitely, definitely worked for a few, a few years there.
So I, so I think we had, we had the, you know, we, we had that mode of power that you need.
But, but yeah, it's, it's, it, it is definitely difficult.
you know, the, the media skills are so valuable in other fields.
I like, like I wonder why everyone's, you know, around there pecking for pennies in the dirt along with the chicken.
You know, like it's, it's, it's very demeaning.
And a lot of, you know, there are a lot of media people with, with extremely good brains, you know, who are absolutely early to see big system changes.
You know, maybe they can't do the most, the most diligent earnings, analysis.
So maybe they're not great stock analysts in the, in the traditional sense, but I, I, I don't say much stored by those numbers anyway.
And to the extent that they are meaningful, that, that meaning is priced into the numbers, beforehand.
So I think those journalist, journalist skills of kinda understanding who's up, who's down, which Mees are.
Pumped up, which, which memes are looking, are looking vulnerable.
The, those are skills that are very, very well suited to this current phase of the markets.
Brian2: So gimme an example that like, sort of brings that home that, someone who uses media but not to like, get people to web pages, to, to put ads and even to pull and operate links in front of them.
Nick: I mean, okay, lemme tell you, the weekend that I put the Tesla, my big Tesla shorts on, probably prematurely.
I should have waited till now.
But, but whatever I, I, I felt like I was in a rush.
But it was the, I, it was the weekend after Musk had first been restrained After the, after the chainsaw had been transmuted into a. Into a scalpel.
I think that was the word that they used.
And this was gonna, these were gonna be more delicate cuts, going forward.
And he still goes down to Mar Largo.
He doesn't, he doesn't get up and go back to his factories, as any self-respecting businessman would.
So, but he, he's going down still clinging onto Trump's leg, going down to Mar-a-Lago.
You know, he's, he's there trying to get his picture being in frame with the president, at, at the dinner.
And, and then through the night, I think it was 3:00 AM I was, I think I was in Europe then.
It was, it was 3:00 AM East coast time, Florida time.
And he is like tweeting, stuff.
White babies, models of white babies on bayonets at some South African.
Demonstration, like just pure race, war, race baiting.
And, and, and I'm thinking to myself like, he's not going back to those factories.
He's not gonna go back to those factories anytime soon.
He is completely captured by his audience on x. And, and the reason I know this is because I've seen it myself.
I've seen how riders, myself, probably parly too.
I don't think ever
completely.
But I've certainly seen how the Gorka riders got absolutely caught up in their audiences, you know, around 20 11, 12, 13, 14, 15, during the peak of lefty Twitter.
And I see that happening to mosque now, and there is no easy way out.
Troy3: you talk about memes though, Nick.
You called America Meme Nation of the Dollar, a meme currency.
What, what What does that
Nick: does that mean?
So I think we all understand that there's a lot of psychology that goes into market prices.
Yeah.
Now if you just look at the Tesla price since two 30, I dunno what it is this
morning.
Two eight.
Troy3: a meme stock too, which is probably true.
I.
Nick: Yeah.
People call it a meme stock.
And yeah, if you just look at the news, the news has been, you know, the pa, the panels of the cyber trucks are coming off.
The glue doesn't keep them on.
It's not forged outta one piece of metal.
You know, it's, it is not one piece of metal as I had imagined.
You know, it, it's actually, it looks
kind of
shoddy.
Troy3: decided not to get one,
Nick: Well, Darius was, Darius was kind of into them, and, and that actually did persuade me that the, teenage though the design might be, it's, it is individual.
And when you see it walk running along Crosby Street here in Soho
and, and every single delivery guy, and, you know, like every UPS guy is just ogling this thing and they're all, you
know, turning to each other and smiling and laughing and, you know, it's the event of the day for like, you can't hate it.
Troy3: Yeah.
Nick: I, I, I, I couldn't hate
Troy3: People don't voice in Miami, Nick.
They don't look twice in
Brian2: No
Nick: Oh no.
Brian2: plumbers like have their like decal
Nick: detail.
our kids have got little toy cyber trucks, you know, like they, they're cool.
Like you, you look at the value of Tesla as a car company, it's maybe worth 5% or 10% of, of what it is right now.
So the rest of it is, you know, I had the, very, very ambitious projections of robot rollout.
And robot car rollout.
Robot taxi rollout, or just Musk magic, real life Iron Man.
You can't bet against Musk.
People have lost so much money betting against Musk.
Do you really wanna be one of the people that loses money betting against Musk?
So it is that, it's that kind of magic factor, and that's probably like those two things together.
The magic of the numbers and, you know, optimistic forward projections.
And then the magic of Musk's aura.
Probably they account for nine tenths of the value.
So you, you have to look at that as being a meme stock.
And then you look at the dollar itself, you know, every single time I go anywhere else, like Hungary or Brazil, I, I'm filled with a sense of panic that I need to get my money out of, out of.
Dollars into a place where it can buy a real nice house for $2 million in the middle of Sao Paulo, you know, with a great gym and school and all
the amenities you'd ever want of a big, big international city right there at maybe one quarter of the cost of the big American cities.
And you know, and you start to look at the US and the dollar itself, you know, the, the whole idea of a re reserve currency is a psychological thing.
Reserve currency is the ultimate meme stock.
You know, it, it, it, it depends on people's perceptions of the strength of that power behind it.
The, the, the, the strength of the military power, the financial power, the, the hidden reserves.
You know, how much gold is there in Fort Knox?
Who, who does it belong to?
And you know, when you start to question all of that stuff, then things get very scary.
Indeed,
Brian2: But it seems like to me it's like media has moved from being about like acquiring attention, you know, to then translate into money, usually through ads, but to trying to create
these memes, like we talked about, abundance, like they created a meme and that's like, that is, that is the currency for influence these days is to be
Nick: I, I mean my, I mean my, I think my currency, I mean, I would like to think is a bit, is a bit different.
The, you know, like, like a, you know, like journalists through the ages, I believe you, you put out some information in order to get information.
You know, so you, you, you, you put, you put out some of the information and the insights that you developed on that information, whether you've
done it just through, you know, you through human intuition or through ai, assistant analysis doesn't really matter.
But, like you can, you can take that.
Information, and you can make, there's no reason why you shouldn't be able to make money out of it, but directly, I, I like, I I don't really understand the, let the,
why we're complicating things so much, so much when a traditional journalistic practice of putting out information and getting in information, building on the
information that you already have with new information and building up the structure of the argument in your head, looking down every single contingency.
I, I don't see why that isn't actually perfect, as a, as a way to analyze the future and potential investments.
And I don't understand why journalists are always so incredibly hesitant about acting upon their own insights.
Troy3: Have you played with this, what's the name of that application where you can follow the trades of the Congress people.
Congress people?
Nick: I, I dunno, but I, I think I made a mistake on the Lockheed Boeing, bakeoff, because I, I, I think the
congress, the congress critters were buying Lockheed, the head of the transaction and it was a mistake.
And I think, I think I went, I went in alongside them, which was un unwise.
Brian2: So what, so just to like put a bow in this, like how would you sum up your, like, theory of the case about, about all of this?
About like how media can be used in, in a different way to make money.
I mean, it's not like new or anything, but like we were saying is like, it's still incredibly powerful and influential to be able to, you know, use the tools and practices of journalism.
Exactly.
But like the old ways of making money from that are increasingly obsolete to me.
Nick: who is able to keep in their head both argument and counter argument?
Like what kind of, what kind of person is able to see that things could go this way, but if he did this, then things would go this way.
You know, like who, who is capable of actually analyzing those kind of situations, trying to work out, you know, what Elon Musk's, Musk's psychological payoff, payoff structure
is, you know, what are the options open to somebody, you know, if he's trying to write the science fiction novel of, of his own life, what, what are the, the next likely moves you like?
You can analyze this as, as a science fiction narrative if you want, because he's suddenly writing one.
And, and so, so I, I, I guess what I'm saying is that, or not you actually assign percentages to each potential path, or whether you just
simply judge the credibility of a particular narrative path, it doesn't really matter, but journalists.
Traders, you know, maybe my tutor at Oxford who was kind of good at, particularly good at doing that whole,
you know, being able to take either side of an argument at the same, you know, pretty much in the same session.
You know, there are certain intellectual traditions that allow for that.
and I think journalism at least done in a certain way, does allow for that.
Troy3: Well, hey, Nick, Nick, Nick, a slightly different question for you.
Have, have your points of view on journalistic ethics changed since, you know, the, the day you fired half the staff at Gawker and where you sit today?
Meaning the role of journalists, sort of now we have this need to feed the machine every day, and some of it feels
like sort of petty ha hall monitoring to, you know, to like out, out sch Freud to like holding power accountable.
Like do, do, do you have a thought on that, on that continuum?
Nick: I, I mean, I, I gotta say, I, I think I probably said all I possibly can about media and you and May and maybe answered one question too many already.
Because like, I, I don't think about this that much.
I don't think about the media industry that much.
I, I mean, I can tell you who I read and it's, it's almost all individuals.
I, and I do, I do follow them very closely.
Tho those individuals who I think of as being bellwethers of one particular group or, or another, it's al almost all individuals.
I don't think there's any
institutions, that, that I follow.
But, but I, but I don't track in industry at all.
Troy3: The York Times
Nick: No,
Troy3: go to Twitter first.
Nick: I mean, I, I would, you know, I would read Ganesh at the ft. There's certain people, you know, I, I like Joe Weal.
At Bloomberg.
So yes, there are certain people at certain institutions that I pay attention to.
Brian2: Do you think Substack is an interesting business,
Nick: I dunno, there's certain, there's certainly some interesting people on it.
I mean, ILA Igl is basically, is, is the democratic body as far as I can tell.
I mean, he, he certainly, it provides most of the intellectual content.
Brian2: Yeah.
Well, it's kind of the successor to blogs
in some ways.
I mean, newsletters are the new blogs to some degree,
similar ecosystem.
are you surprised that that Silicon Valley turned on the, the media world?
So, I mean, you, you saw like, you know, you were, you were doing Valley Wag and so at the time you were doing Valley wa that was unusual, right?
Like this was, this was the time of like fawning coverage still, I think it was still fawning coverage then for most
media.
Nick: I mean value wa was, was certainly the goca sites were a mix, you know, so there were definitely critical pieces and, you know, some of them more serious than others, you know, carried interests.
For instance, we had a, we had a little campaign against carried interest.
But, look, they've always been touchy.
They, they used to be more hands on in their media management.
You know, they used to be in your inbox, in your email, and, you know, and Peter Thiel was still trying to whine and maybe not dine, but certainly whine
Ryan Tate as late as 2011, you know, three years after the supposed terrible insult that had been visited upon him.
And so they, they've definitely, the media management, varies from, you know, gentle, encouragement, you know, through to, lethal lawsuits.
And must certainly seems to be inclining towards the more aggressive end of the spectrum right now.
It seems to be mainly rhetorical.
You know, mainly threatening people.
That that was a very doctor evil point he did.
Right.
I mean, I'm guessing he was talking about Reed Hoffman, you know, it was like, I'm gonna, we, and we're going to get, you had a, it had a definite supervi quality to it.
So, so I, I I, I assume he's gonna, some move against the media would be popular about now.
I don't know exactly know who the target is.
Like what, what's the media expression of Reid Hoffman?
Do you, do you boot him from XI dunno.
Troy3: How, how, how did this little, little Nick Denton renaissance start, like about a, what, three weeks ago you, did you decide that you were gonna have a, a moment?
I mean, I think you're being, you know, partly, I don't know, you, you joke a little bit about selling the apartment.
Surely that wasn't the motivation.
Is it because you are leaving the country imminently?
Is it because you felt like there was enough stuff that you wanted to talk about?
Are we gonna expect to hear more from you?
Nick: It was January 20th.
It was not the Trump inauguration.
It was not the Musk Roman salute.
But it was the, the deep seek drop.
And, just playing around with deep seek, for a few days.
Then we, we were on vacation, in like, in a place where the dollar goes a long way and playing around with deep seek and
realizing that it was, it was better than Claude, it was cleaner, like seemingly less censored from my point of view.
I didn't ask it about Ian man.
And the idea of American AI supremacy fell away in an instant.
See, you could see it was, it was, it was, it was obvious.
Okay.
Well, so, you know, they've matched in this, they're gonna match in pretty much every other AI model type.
And it, the story of AI is gonna be the same as the story of, you know, every hardware industry, which is the Chinese come up at the low end of the market, and
maybe if their initial products aren't quite as good, but they're priced at 10, 10 x less or a hundred x less, and gradually they move up the value chain.
And clearly AI and by extension software are gonna be no different than.
Drones or electric cars or robots or batteries or any other industry you wanna think about.
And you know, when you come to that conclusion that all of these different industries are not all different industries, but they're
all part of one larger industry, that there is no real difference between phones, batteries, robots, drones, and a bunch of other sectors.
That this is all one category in which companies are competing.
And the only one that Amer America has is Tesla in that field.
Europe has nothing.
And China has, you know, probably about a dozen different contenders in, you know, coming at it from robots, phones, cars, batteries,
and all directions.
So that, so that was the, that was the trigger really.
It is just why, why is all of my money in US stocks and US real estate when China is, you know, is already in 2023, twice the electricity
production of the United States, heading towards 10 x the electricity production of the United States?
Electricity reduction is a good proxy for the new economy.
So expect the Chinese new economy to be multiples of the size of the American new economy.
And, you know, and taking that scenario work out, Hey, ai, if I believe this, tell me how I can best make money.
It's not that hard.
Troy3: Yeah, I told you to come outta your shell and talk What?
What happened?
But suddenly you were like, I don't wanna be quiet anymore.
This is too interesting.
Nick: I, it's like I said, it's the best story.
Like if, if you've, I, I would in, in my, in my time, I've covered the fall of the Soviet Empire, you know, the revolutions in Eastern Europe, emerging
markets, the rise of the emerging markets, the derivatives scandals of the 1990s, the first kinda wave of, you know, international finance, in
Europe and Southeast Asia, then Silicon Valley, seen up close when I was doing Valley Wag from a greater distance when I was, with the financial times.
And, and I can tell you that this right now is by far the best story that I've ever, come across in my life.
And, and, and if you're not, if you're not mesmerized by it, I, I mean, I don't know what else is, I don't know.
I dunno what else is as interesting as this.
There's certainly no, there's certainly no fiction that's as interesting as this right now.
It so it, so it is, it is, you know, let's, let's bring it back to media.
And we should be talking about media.
This is the biggest media story I have ever seen, bar no question.
There's trillions of dollars at stake.
There are empires at stake.
You know, there is a new era coming, and it's all gonna play out right in front of us, you know, through our fingertips, you know, through our, through the clips that we take.
it's, awesome.
Brian2: and you're short America in this narrative.
Nick: I'm actually not, I'm not sure American, Chamath from the oil in podcast that he was Short Wall Street, long Main Street.
So I look, I, I did own a bunch of copper stocks.
And I, and I don't, I don't see why this should be so bad for, you know, if this ends up with a devaluation, let's say a devaluation of 50% of the dollar.
After all the tariff dance is complete, we just end up with, you know what, this is a, this is a, this is unstable.
The markets need to move into e equilibrium.
And the way for them to move into equilibrium is that the dollar must drop because it's ridiculous that America is running in a deficit in the agricultural
trade, right now, when America ought to be one of the great agricultural suppliers to the entire planet.
So if you bring down the dollar by 50%, I don't think that's so bad for the fracking industry, not necessarily natural gas industry.
Is that so bad for corn?
Is that so bad for Iowa?
Is that so bad for American manufacturers?
Is that so bad for Arizona?
Now for the inland states, this could be fine.
Brian2: It's gonna be not as fun to go to Italy in the summer.
I gotta say in the
Nick: Are you, y'all have been lauding it over us for way too, way too long.
D don't, don't you think that those euro pores insults were, you know, they, they just kinda passed through us without, any feeling, any feelings being
hurt.
You know, you you you were all calling us Europas.
Both
Brian2: of us,
Nick: both liberals and conservatives.
Brian2: Hey, I just want go to Sicily, Nick.
I don't know why the hostility.
Troy3: I think of you as a local,
and when you, when they asked them, but the, the, one of the funny things that I thought you did in a, in an
article I read somewhere, is that you apologized for sending us the Irish and Scott that became hillbillies.
Nick: Uh,
Troy3: Is that, is that.
Nick: but I mean, it was, it was when, it was when, uh, Vance and the others were, big into thank yous.
You know, like the, you know, Europe should have been, you know, the
French should have said, thank you for saving them from speaking German.
And Zelensky should have been more thankful for, you know, for sending thousands of men to their death to, to save Europe from a Russian invader.
So, it was, it was around the time of the thank yous and I was running through all the things that I thought America should thank Europe for,
you know, patients wait, that we don't pull out our money from the US stock market and treasuries just like that.
That we don't respond to every outrageous insult, from Vance, or mask or Rubio or Trump.
you know, in the same tone that they would, that they were delivered.
You know, there's a lot of, there's a lot of anger, in, in Europe about this kind of, this constant, this, the, the succession of insults, they're just like, continues.
It, it's, it's demeaning.
And if you think that people are just gonna switch back to the way things were before you got another thing coming.
But anyway, I was in the middle of this rant and then I realized, well actually we didn't really send them all our best.
You know, like, may, let's, let's be, let's be, let's be a little bit honest here.
That, yeah.
Amongst the kind of the Jewish scientists.
And you know, the hardworking Germans after the 1848 revolution.
And so we send you some, we, we send you some high quality human capital that, that's for sure.
But you know what, there, there were a lot of panelists, Sicilian peasants in the mix too.
And, and then, and then I think maybe, you know, maybe we're gonna find the most expensive of all with the, with
the Scots-Irish, the Borderers, you know, who were pernicious and pious even before they arrived on the East Coast.
And when they did arrive on the East coast, they were pushed, you know, by the peace loving Quakers, by the coastal elites at that time.
You know, nudged them gently up the valleys, you know, so they could, they could die fighting in the Indians on the frontier.
And that and that original betrayal in America, you know, people talk about, you know, whatever the original Sin of America was.
And, and there are several original sins to choose from.
But I've, I've always thought that that original scene is one that, should be a little, a little stronger in the narrative, because that's the story of JD Vance's ancestors, you know,
JD Vance's ancestors who, who arrived already despised, on the East Coast and then were pushed into the hills, by the Lowlanders that didn't want anything to do with them, with, with their fighty ways.
Troy3: Do we have the Quakers to thank for that?
Nick: I I think, I th I think it was both the Quakers in Pennsylvania and the, I guess the gentry in Virginia.
But, but although definitely the Quakers, you should read Albian seed for the more, more detailed history of this.
Troy3: Well, Nick, if, if one wanted to participate in Nick Inc. In the future, do you, you trade on your own account?
Do you create a Denton hedge fund?
Do I, does my money fall yours, Nick?
Or do I do I, put seed capital into the next kind of poly market esque AI assisted scenario, planning media,
Nick: Oh, you know, you know all the lingo, you know all the lingo already.
Troy3: right?
Nick: So somebody's been doing some
talking with the AI here.
Troy3: a business coming?
Is there a.
Nick: Well, I mean, there's my business, which is, investing in my family's money.
and so we have a, I guess a two month track record now, and I, I think I've disclosed all the trades.
It's long BYD, the long zami, short Tesla, short apple, long gold,
Think no.
Oh,
Brian2: so you are short America.
I mean, that's as short America as you can get.
Nick: Oh, sorry.
Long, long grab in Southeast Asia too.
Well, I, I, I wouldn't say that, I would say, I would actually say I, it is more like a, it's a rebalancing.
Troy3: will you be taking visitors in Hungary?
Nick: Yeah, I'm actually, I'm actually thinking of opening up a little space, a little cafe,
you know, just, you know, just like in the old days when news and financial speculation and coffee and maybe a
drink up to 6:00 PM
Troy3: our friend Andre Baz, is he, he's a great Hungarian, is he not?
Nick: He is a Hungarian.
I, I, I, I don't think I'm friends with him.
Troy3: Can connect you if you're interested, but is there a way that we could maybe get him to decorate your, your, your new hotel?
Nick: does, does he spend much time in Budapest?
Troy3: I, you know, I don't know.
I only see him on Shelter Island where he has a, a little hotel
Nick: Well, look, I, I'll, things don't take too long to spin up in, in Hungary.
So, come over to Budapest in September and we'll do a, we'll do a podcast from over there.
Troy3: Oh, that's a great thing.
Maybe we could do a little conference over there on, media next.
Nick: the, the space is very small deliberately, so, it fits maybe a, a dozen people participating and maybe a few more watching.
Troy3: maybe we could take it out of your space and get a hotel or something, you
Nick: I, I can, I actually like the idea of something small.
Let's just, that's, that's just me.
I, I'm, I'm, I'm not, I'm not looking to do an events business.
But, but, but, but, but the idea, but the idea of, you know, you put out information and you get information.
We're, we're just trading, you know?
Troy3: I wanna track your trades, Nick.
I wanna start putting 'em in.
I want to know when you got in.
Nick: let me see whether I can dig out the dates.
The, the, the, the, the, the call you, I mean, you can, you can more or less work it out by the, the, the BBYD, oh, I forgot.
Tencent, BYD, Zami and Tencent, was at the beginning of February,
maybe the second week of February.
Troy3: When did you short Apple?
Nick: More recently,
I think, I think that was the, it was people like DHH and Gruber, like some, some real hardcore apple fanboy turning against it.
Troy3: Gruber gave them a little slap a couple of weeks.
Nick: I, I mean, I, I think those kind of things, those things are meaningful, you know, that, like, that that's a, that's a, that's a meaningful event when somebody like Gru turns.
And then there's also a very interesting, Palmer lucky, interview on YouTube with a YouTube podcaster in which he, he has a, a whole six minute, you, you've got to, you've got to look at this thing.
It's a six minute playbook on how Xi Jinping could shut Apple down with a, one signature on a piece of paper.
You know, you know, basically how you know the design in China, the designed in California.
It means nothing.
What matters is that it's, it's made in China, and China could seize the supply chain, at a moment's notice.
It, it would be easy for them to do.
And you know, as long as that's the case, they just
Brian2: Yeah.
Nick: ball balls in their hand.
Troy3: Well, you know, I like a Palmer, rant as much as the next guy.
Nick: Oh, he's, he's awesome.
if, if America, if America had a hundred more like him, a hundred more Travis Colonics, Palmer Lucks and Elon Musks, if it, if it had a hundred more of
them, you know, those kind of a Rian figures who, who don't give a fuck, like then, then I might actually have some second thoughts about my bets.
You know,
Troy3: Brian, for, for your edification, if we want to tie this conversation up in a bow, it to me, there needs to be a media layer on top of Nick Denton, because most people aren't gonna do that work.
They're not gonna, they're not gonna abstract the insights out of the Palmer Lucky conversation.
They're not gonna follow Matt and glaciers, and someone needs to make sense of that.
And if you tied that in with stock trading information, I think we could make an interesting media product.
Nick: There hasn't been a, a good new financial publication.
Troy3: Do you
follow this account called
Unusual Whales?
Nick: yeah,
I mean if you, I think the following list is public there.
And that's basically everybody I follow.
So you can pretty much get a, get a very, very clear sense of who I'm paying attention to.
It's basically right, right wing thinkers, traders, some Musk fan boys, some, some swing voters in the teal world.
A few financial journalists.
Yeah, that's, that's pretty much
Brian2: One final media question is like, why do you think there's so, there's so much more energy in the sort of right wing part of this alternative media than there is in left wing.
Because I mean, it was kind of the opposite
Nick: was it
Brian2: I feel
Nick: I I, I, I I haven't found anything that the left has said interesting in, I know several decades.
Brian2: Oh, really?
Nick: I mean, sto like Matt Sto and some of the anti-monopoly people, it's the same tune.
But yeah, it's a good tune and I agree with them.
The Neoliberals, yes, I, the abundance agenda is awesome.
I believe in the housing, housing theory of everything.
Yeah.
I'm like, sign me up.
I'm there.
I'm there, I'm there.
I'm a yimby.
I'm a total yimby.
I love the Ybi.
Troy3: it really is ridiculous
Nick: I, I mean, I'm sorry, I'm not gonna put my, you've just woken up now in 2025 and, you know, in the final years of the empire, with a
plan to turn it around that, you know, probably your last chance was back in 2008, but that was probably the last
Troy3: or, or there's something wrong with the system,
Nick: Well, obviously,
Troy3: obviously.
Brian2: But the fact that like podcasting is so filled with, with.
Right wing figures versus left wing figures, that that doesn't surprise you at all.
That's par for the course, I guess.
Nick: no, I mean, they, they've been a lot more, I mean, look at my follow list.
There's, I, I think there's barely a left winger in there.
And, and, and, and, that's not, I mean, I mean maybe that's just me being ideological about it.
But I think, I think I'm curious enough.
I, I'm curious for different points of view and interesting facts and insights that I might not have otherwise follow.
And, and I will take them from absolutely anywhere.
You know, I'm completely in, I'm an information omnivore.
I will, I'll take it all.
And I just don't see anything interesting that's coming from them.
I look, I, I like Mad Gazi, president for life.
I'll, I'll, I'll, if I was voting in America, I would vote for him.
There's no way he can ever stand for election, you know, he's a Singapore kinda leader, not, not an American kinda leader.
Troy3: well, maybe, maybe.
Nick, how's your Hungarian?
Nick: It's okay.
Troy3: Do you think you could run for president?
Nick: No, I, I used to Christian, I, I, I was colleagues with Christian Freeland, who later became can Canadian finance minister and, and Trump's Beno Benoit.
and, and I guess she's an enemy of Putin as a Ukrainian, and, and we, we used to fantasize about what we would
do if we were, if we had control of one of these, these European countries like I guess Hungary or Ukraine.
But thank God they never gave it to us because we were, I think, I, I think far too detached from the everyday, to, it was very
Troy3: Right.
Will this move require you to give up?
Do you have American citizenship?
Nick: No, I never, I never took it.
Troy3: So, so you don't have to pay American taxes?
Nick: Right.
Now I do.
Yeah,
Brian2: Troy, are you?
Are you anything you need to
Troy3: I made a big mistake because I was being a little idealistic and I,
Brian2: You went right for the taxes.
That's all I know is there's
Troy3: No, but I'm a You know, I'm Canadian, but I have an, I'm now an American citizen.
Yes.
Brian2: Are you gonna renounce your citizenship for tax reasons?
Troy3: I never said that.
I'm just gonna move to Miami just like
Brian2: yeah, that's fine.
That's an in between.
Nick: We'll, we'll make, we'll make sure you make whatever move, before the exit taxes Come in.
Troy3: that's a good point.
Brian2: All right.
Should we leave it there?
Nick, thank you so much for taking the time.
Troy3: Thanks, man.
Nick: Good, good talking, Trey.
Troy3: Do we want to join?
Brian2: If he'll come on.
Sure.
Troy3: Maybe we can debrief with anonymous banker
AB: hey
Troy4: You know what, we had a nice conversation ab with, one and only Nick Denton.
He has a lot of big theories.
He's short on a lot of things.
He's short
Brian2: Well, first of all, he's over media.
He, he can't, he, he doesn't, he doesn't wanna talk about the media business, but he likes media to make money still.
And it seems like
Troy4: Well, he liked, he thinks that the skills of journalists are relevant to making money
AB: Yeah.
Brian2: me.
AB: So he said that, you mean you don't need to be a journalist to
make money in media?
Is that his point?
Troy4: well, if he was gonna make money in media?
he'd do the ultimate affiliate, which is trade Stocks.
Right.
He's, he's short on Apple, by the way, ab, he's short on Tesla.
Obviously he's long on all the Chinese car brands
Brian2: he is going into gold.
He is.
He's got a prepper portfolio.
AB: Did he say anything on Reddit?
Troy4: no,
he didn't mention
AB: Got
Troy4: but he's very long
on
community media and media discussion as media, which I thought was a really great part of the conversation.
Brian,
AB: mean, it's interest.
I think they said discord.
Discord just filed or will go public later this year at some point.
So I think there's communities popping up everywhere.
There's a lot of places, I think based on your ages in mind, that we don't necessarily understand the communities.
Like I, I can't use Discord but there's a lot of connectivity happening, people talking, chatting.
I don't know.
Brian2: I'm glad you can't use Discord because Alex, who had a hard stop, so he couldn't be here.
He was always giving me shit because, like I said, discord was just fried.
My brain, I can't, I can't handle
Troy4: Hold it.
Did, did ab, did AB just put himself in our age cohort?
AB: I'm
one below
Brian2: Two below
AB: I'm, I'm old.
I'm old.
Yeah.
But it's, it's weird when you use these,
Troy4: I'm not, I'm not a
boomer Brian.
Brian2: So Anna said, I said we might do a Gen X episode.
She said, isn't Troy a boomer?
Troy4: That's
Brian2: before be.
I laughed so hard.
AB: I think what's always interesting is when you try to use a product that is getting a ton of traction and you can't, you just, it doesn't make sense.
It's, it's a weird thing like Snapchat for example, like, I just, it just,
doesn't work for me.
So.
Troy4: Yeah.
Well, Brian, I, I just wanna go back to the Gen X thing for a minute.
'cause I was reminded today at a meeting I had that the latchkey kids that are Gen X are now having to kind of drag the bodies
from, you know, the digital wreckage and find, find new ways to eat, eat, hunt, eat and kill, or the other way around.
Kill, hunt, kill, eat.
Yes, there's more and more of us.
Brian2: Wait, explain that.
What, does that mean?
Troy4: What, what I mean is there's no institutional protection for any of the Gen Xers anymore.
It's over.
Brian2: No, this is, this is all I, the New York Times had a great, piece that got sent to me by like several people about the creative class of Gen
X that got the sort of their knees cut out for, from under them right when they're in the prime earning years.
It was a tough one.
AB: I can tell you from what I'm seeing, like a lot of these traditional media, either the public companies are gonna be splitting themselves apart again
to find value or any combination is so much of the potential value upside after the combination or decoupling is through headcount reductions.
And it's that that middle staff, right, that are people.
Late thirties, maybe forties to mid fifties, who, like you said, Brian, are in their higher earning years and there's just duplicative staff.
Um, there's ways that they're in technology is getting necessarily, they don't are necessarily needed anymore.
And so, and there's not new net new jobs in traditional media space.
Obviously this happened in newspapers, it's happening in tv, radio, there's just, there's not a need to have.
Extra bodies around it.
It's the only way when you have headwinds from advertising revenue and declining audiences to make these businesses work.
Last week, I think it was reported that Apollo's gonna start shopping Cox Media Group, which they acquired, I think four to five years ago.
And the question everyone has is like, who's going to buy that?
The strategics in this space might get some regulatory relief from Congress to be able to buy more TV stations, but otherwise, there's not another private equity firm that's there to buy it.
And when a strategic buys it, they're gonna be buying basically stations that they already like.
They're gonna be buying a station in a market where they might already have a station.
And So the only way to make it.
From an MA perspective is to just cut a bunch.
You're basically combining both stations together.
You're ripping out the entire back office, and the only thing that
you're keeping separate is the news product in a little bit of ad sales.
Brian2: So this is like the time for the, I mean, we talked about this with the cleanup, right?
And this is going to be, I guess what you're saying is it's gonna be broader than just some like struggling digital media publishers.
AB: Yeah.
I mean it's, it's already happened a lot in the newspaper space.
It, it happened in radio.
It's going to happen now in tv.
The main reason why it's happening now in TV is there's, there was a lifeline that traditional or local TV got, which is in the form of the retransmission
fees, uh, distributors . And what had happened is at the beginning when they first got those fees.
All the, big networks started charging an affiliate fee.
So they were get, so A, B, C, NB, C, they were getting part of their retransmission fee.
and over time the amount that the kind of the corporate overlord was taking from the local TV station has crept up.
And so that line of revenue has gone from a big contributor to the bottom line to, to basically nothing.
And so the only real way to make these stations work and politicals up and down over time.
But the
only way to make this these stations work
is to just cut
costs out.
It's like the last of all the local media.
Troy4: and the pol the political money was a big part of the
Brian2: Yeah.
And also, I don't know if the political money comes back as strong because Trump and the Republicans prove that TV advertising in, in, in politics is totally overrated to some degree.
I mean, he was able to, he's a unique candidate.
He was able to earn a lot of it, but they got outspent like tremendously and they poured a lot of money and energy into, you know, get out the vote.
And, and those, the kind of like ground operations, that they were always weaker on, I thought.
But it's interesting to see how that'll affect the TV market.
AB: Yeah.
I mean, there's a dirty little secret.
A lot of general, they're called GCs of campaigns take a percentage fee from traditional TV
ad spend, and so
Brian2: They're all loaded for that.
I mean, this is a best business to be some political consultant and be like, yeah, I
got just the guy who can handle the, the media bar.
AB: Yeah, and then their buddy from college makes the TV commercials, and so they spend 80% on ad buys.
They take, I think, less from the digital advertising, so I think there's still a longer tail in.
Political ad buying, but the rest of the market, like for e everybody, even like smaller advertisers, the internet's easier and easier to advertise on.
So I think long term and just the number of subs is going down, the number of subscribers, I think, I remember looking at the research when full distribution was over a hundred million households.
It's now down to like 55.
And at the time everyone thought, okay, this is like, I'm, someone's predicting it's gonna go down
five to 10% a year.
And, and it's happened.
And people are getting
reconnected in a lot different ways.
Troy4: Hey, ab, what pronouns do you prefer?
AB: He, He,
Brian2: and b.
AB: he,
we're in Trump's Trump Trumpland.
So
Troy4: Okay.
what else hit the market this week?
AB.
AB: I dunno.
I got the Cox.
The Cox Media stuff is people are trying to figure out what's gonna happen there.
I think there's, there's more news on the TikTok stuff of who's in that process.
It sounds like they haven't really gotten that much information, but it sounds like there's more investment
firms trying to pair up.
As we talked about before, it's a, it's a pretty large purchase.
Troy4: Any smaller stuff.
AB
AB: I think you'll see a couple of these like.
Remaining orphan
digital assets get sold in the next month or two.
I know a lot of these processes are just finishing
up.
Troy4: you do those though.
That's your stock trade, right?
Ab,
Brian2: Orphan digital assets.
What is, can you define an orphan digital asset?
AB: just think of like the platforms that got built
up.
Five years ago that have been se Yeah.
So orphan like at Yahoo, you know, they have much stronger or larger strategic priorities.
And so if something's non-core that's losing money, that, you know, they're, they're selling these assets and
I think the values that they're selling them at are pretty low.
They're just trying to get 'em to a home where
someone's not gonna just completely blow it
Troy4: Now, did they shuffle that one off to the glue factory
or what?
What's your take on
that one?
AB: Yeah.
but they're unsustainable businesses, so it's sort of the only place they can end up by Glue Factory.
it's just operators that are gonna spend less on content, lean into different distribution platforms like Google News and Google Discover, and then probably add a bunch more ad units to the page.
Brian2: Yeah.
AB: Yeah.
but that's, that's the only way that traditional or digital media works these days.
I, I don't think there's too many profitable people that don't have subscriptions that are actually
making it work.
I,
Troy4: You know, that's, it's funny, I just wonder if slathering a bunch of, ad units and
floating video players on a webpage makes anything more effective, it seems like a shell game.
AB: Yeah.
And it's gonna be more of a shell game when half the traffic are, or, or more are, are the different agents running around retrieving information
for people and it's not a real person?
Oh,
Troy4: what the most dangerous thing is, is
that publishers are consoled by Google Discovery traffic as a core serp, high intent traffic wanes, and they're just gonna get hit again when the whole page changes and discover evaporates.
Brian2: discover is like the Achilles heel that's keeping afloat A lot of
AB: Everybody, everybody right now, because if you, you think about it, you're running at a 20%.
We're just gonna take some very broad tr assumptions here, but if you're running at a 20 to 30% margin in your business and you're all programmatic
revenue, and Google Discover is 20 to 30% of your traffic, if that goes away, your business just went unprofitable.
I think the deal to talk
about this week is the Rocket Mortgage deal with Mr. Cooper.
I don't think most people have ever heard of Mr. Cooper.
Troy4: Was Mr. Cooper the banker on
it?
AB: Exactly.
I did work for Mr.
Cooper before, but, so
Brian2: Rocket Mortgage for those who don't know.
AB: public company, big, big mortgage company.
I think one of the top
three or top five.
Brian2: Yeah.
but they've been buying assets.
AB: So they bought
Redfin
Brian2: What
AB: you know.
Brian2: do?
AB: Was meant to make the, yeah, it was meant to make the home buying experience better.
So they had their own agents.
They were like, look, most people don't like this experience.
Most consumers are finding the houses on their own.
Why do they need an agent?
So let's just charge less.
It worked.
Okay.
They hired some of their own agents.
But I think what this year's turning into, there was like a headline that said, deal volume is less in Q1 this year than it was last year.
I think that that's.
An easy headline.
I think it's a little bit different when you look by market, because some markets are up, some markets are down.
But what you're seeing with like a rocket mortgage, this sort of deal is similar to like the gen digital money line deal, where people that have
large audiences online and that are starting to transact more online, want to basically own the full ecosystem.
So with Rocket Mortgage combining with Redfin and Mr. Cooper, which is a big loan servicing business, you basically complete the funnel.
So one of the biggest things in in mortgage is refinancing and, and people believe as the rates go down, that refinancing business will get bigger and bigger.
And so you can see rocket Mor mortgages in the perfect position because they know they can con contact the consumer because they have all this loan servicing data.
They now own a part of their business, Redfin, that makes money on future sales or future buying.
And so it's this really.
We'll see if it works.
But it's a very large company in the real estate space that basically owns every single part of the consumer journey and the lifecycle.
And it's a, it should be a little bit more immune to having to pay Meta or Google for net new customers or any other person in this landscape that drives leads.
So that's sort of the thesis.
Their belief is even if we can get a little bit of Mr. Cooper's business to help to refinance via Rocket Mortgage and our platform, that won't be paying anything for customer acquisition.
And so it will be, it will drop straight to the bottom line in terms of contribution.
And then owning Redfin is like the perfect way because it's like you get pre-approved for a house.
I think a lot of times people take that pre-approval and then use that bank to finance their eventual purchase.
So you can see when you're looking for a house, you'll automatically know what you can pay.
Hopefully the data gets good enough where you're already approved and instead of waiting 60 days, you can close much quicker.
'cause you'll probably have already uploaded all your information.
You're basically collapsing the home, fine, finding part with the financing part,
and then it'll be serviced by Mr.
Cooper.
I.
Brian2: I
mean, does this fit, is this a media business?
I'm just wondering.
Troy4: it is.
It's median transactions.
Brian2: Well, that's what I, I, I sort of, to tie it back to like Nick, that's what I I sort of, you know, media has never, I don't say never, but it's, it's very powerful still.
It's just, it doesn't work as a standalone business in most cases.
AB: I think the reason why it's scary for media companies is, you know, rocket Mortgage, I'm sure sponsors
some sort of sort of sports stadium or something like that and they probably pump a lot into different.
Publications where they think the consumers are gonna be looking for homes or whatever, high propensity to, to get a mortgage.
And so as they have these ecosystems, they'll need
to spend less to find new customers.
Troy4: Well, that's a good ab
I look forward to getting your feedback on the Nick Denton conversation.
AB: good.
So what else is he?
Long Gold.
What else?
Brian2: gold?
I, that's all we talked about.
Yeah.
Well, Tencent, BYD
Troy4: I'm gonna get his portfolio and, start tracking it.
AB: Is he in Newsmax?
Troy4: No,
AB: Okay.
Brian2: so,
Troy: That's it for this episode of people versus algorithms where each week we uncover patterns shaping media culture and technology.
Big thanks as always to our producer, Vanja Arsenov.
She always makes us a little clearer and more understandable and we appreciate her very, very much.
If you're enjoying these conversations, we'd love for you to leave us a review.
It helps us get the word out and keeps our community growing.
Remember, you can find People vs.
Algorithms on Apple Podcasts, on Spotify, and now on YouTube.
Thanks for listening and we'll see you again next week.
Troy4: that's it.
Thanks guys.
Brian2: All right.
Bye.