The Power of Billionaires and News Influencers: A Deep Dive into ‘Anti-Scale’ Media

I always emphasize the importance of distribution over just the surface. The way content is distributed shapes what is created, and it’s crucial to consider how to reach different audiences across various media platforms. While the temptation to go viral by being polarizing exists, it’s essential to resist that urge and focus on delivering high-quality insights to a diverse audience. Jonah Peretti’s experience with BuzzFeed and Facebook highlights the ever-changing landscape of digital media distribution and the need to adapt and evolve to stay relevant. If Mark Zuckerberg had continued to fund BuzzFeed, they could have had more charisma and success. It’s clear that different choices could have been made to make the Facebook blue app more successful. Netflix pays a lot for content but doesn’t invest in news. YouTube has allowed individuals to build successful businesses, but has created a system where media companies struggle to survive. The tension between making advertising for the companies covered and monetizing platforms at scale remains unresolved. The traditional advertising business relies on reaching valued audiences, while Google, Meta, and TikTok dominate scaled advertising. Building a successful advertising and convening business is one solution. The relationship between convening events and covering them is intriguing and complex. You had to go weeks without insulting me to get me to come here.

[Laughs] Or did I have to nag you every single day until you showed up?

Tell me about the revenue split between journalism and events. Are you making more money from journalism or events?

Is there a preference for one over the other, or are you trying to grow both equally?

We’re a startup. We’re opportunistic. The events business grew faster, led by my partner, Justin Smith, who has experience in building such businesses. We initially focused on events as it was quicker to make profitable compared to digital advertising, which requires building a digital audience. The events business has exceeded our expectations, to the point where we are now competing with Davos sooner than anticipated.

When we launched, we initially planned to transition to subscriptions and build an elite audience. We also considered focusing on newsletters instead of a website.

In my experience, being ideological about revenue streams is not practical. Both advertising and subscriptions have their advantages and challenges. We aim to build a successful media company without limiting ourselves to one revenue model.

Our long-term goal is to build a global company over decades, and subscriptions may limit our growth in some ways. However, if subscriptions make sense in the future, we are open to exploring that option.

We were ambitious from the start, aiming to cover under-reported regions like Africa and the Gulf to provide unique information and build a loyal audience. This strategy has proven successful, with our presence in Africa and plans to expand to Europe and Asia. Our approach is not about a hub-and-spoke model but building a network of diverse reporting locations. We are working on building a network of audiences in various locations. Is this causing you to allocate resources differently? If the audience in Africa is growing faster than in the United States, will you invest more resources there?

Yes, we are closely monitoring what is effective. The US is the largest media market globally, with more than half of all media revenue coming from there. Despite this, we believe that investing in other markets is a valuable long-term strategy.

In the past, we have experienced challenges with resourcing operations in different countries with lower advertising revenues. However, we have seen strong audience engagement in various international markets. We have learned to be cautious in managing costs and generating local revenue to support growth.

Our approach now involves building global networks through events like gatherings in Silicon Valley and Washington, which have been beneficial. We have also implemented the Semaform, a method of separating factual reporting from journalist analysis to provide a more engaging and balanced perspective for our audience. This also shows a bit of humility. In the past, we would simply call this blogging. I used to jot down my thoughts constantly, which was likely influenced by blogging. It’s almost embarrassing to admit that we used to have blogs, as we are all old bloggers now. I still stick to the core of expressing my thoughts, just like reporters do. Someday, people will be explaining that they used to have podcasts. It’s possible that in the future, our VR avatars will be conversing with each other. It’s amusing to think about how things evolve over time.

The format of our content has been well-received by our audience. We aim to be humble yet assertive about our opinions, while remaining open to disagreement and being clear about the distinction between facts and analysis. This approach is ingrained in our DNA and is reflected in everything we do, including our events.

As for the structure of our team at Semafor, we have about 60 journalists and over 100 employees. Our team consists of both journalists and a commercial team, including revenue and events production. We handle everything internally, which can be a challenge in the news industry due to the lack of talent on the business side. However, we have been successful in recruiting top-notch commercial operators and revenue-focused individuals. This has allowed us to excel on the business side and focus on producing quality content.

In terms of decision-making, I tend to make decisions quickly and in large volumes. However, I value the input of those around me and am willing to reverse decisions if needed. I prioritize hiring excellent journalists and trust the expertise of my team members. I prefer to be surrounded by people who are experts in their respective fields and am open to different perspectives.

This new approach to decision-making reflects the dynamic nature of our business as we continue to grow and expand into various areas. Ethics play a significant role in our operations, and we strive to maintain a high standard of integrity in our work. While journalism ethics can be challenging, it is essential for our credibility and reputation. That’s just the way it is. In journalism, it’s essential to ask the hard questions, even if they may seem uncomfortable. Senior leaders are prepared to engage with these challenging queries, as it’s part of their job. Avoiding tough questions is not productive, as CEOs and political leaders are eager to address them. It’s crucial to approach these individuals as important decision-makers in the midst of significant stories. Maintaining respect and independence in journalism is key, rather than demonizing or conspiring against the subjects being covered. It’s important to challenge executives on their values, not just their business decisions, as this can lead to valuable conversations and insights. Embracing the media as a sales channel is a strategy employed by successful business figures, who understand the importance of engaging with journalists and the public. The legacy media is in decline, and new outlets are emerging, but at their core, they are entertainers without a deep theoretical understanding of media that drives them to enact change.

Elon Musk stands out as an exception to this trend, with the rest of the new generation of business leaders having a more conventional relationship with the media.

The rise of news creators and influencers is an intriguing development. They operate independently from traditional media structures and are not influenced by gifts or access. They struggle with the idea of compromising their integrity for a larger audience.

Courage in upholding journalistic principles and delivering truthful, independent content is essential in competing with these influencers. It’s clear that audiences appreciate hard-hitting questions and genuine reporting.

Access can be a double-edged sword. Influencers who prioritize conflict and sensationalism may lose credibility with their audience. Journalism is not just a skill learned in school; it’s a service to the audience that anyone can provide with the right approach.

The dynamic at the Pentagon, where video-first journalists were rewarded for creating conflict, highlights the performative nature of modern media. The clip economy drives content creation, sometimes at the expense of journalistic integrity.

The audience, algorithms, and personal motivations all play a role in shaping media content. It can be challenging to differentiate between genuine journalistic pursuits and sensationalism in today’s media landscape. Do you not prioritize scale when managing video content?

No, we actually put a lot of thought into it. Instead of chasing a large audience, we focus on having high-quality conversations with leaders in media and business on shows like Compound Interest and CEO Signal. We believe there is a significant, albeit not the largest, audience for sophisticated discussions.

In terms of monetization, we strive to reach a premium audience. We work with direct-sold advertisers on integrated campaigns and utilize host-read ads to generate revenue.

The changing landscape of media has led to the integration of advertising into content, with platforms like Google and Meta reshaping the economics of the web. This shift has made it challenging for creators to earn money without engaging in advertising. However, we aim to create advertising that is effective and beneficial for both our audience and advertisers.

Our goal is to build a successful business by appealing to a valuable audience, rather than focusing solely on scale. That’s not the only way to build a media company, but it’s the focus of our company. It’s working well for us, allowing us to hire great journalists and break stories. We are transparent about any potential biases, ensuring our audience understands our perspective. We disclose any conflicts of interest, believing our elite audience can discern the biases present. We strive to maintain journalistic integrity, despite the prevalence of undisclosed advertising in other media platforms. Our goal is to provide real, unbiased information to combat the widespread belief that everything is corrupt. Transparency is key in our approach, even when swimming against the cultural tide of skepticism. Our events are marketed as opportunities for real, in-depth discussions, similar to how you don’t accept freebies in gadget reviews. Lean into the fact that people like journalism and don’t want to be lied to. The current social media landscape is filled with fake content, but there is a growing discontent with influencer marketing and undisclosed political advertising. The younger generation, raised on social media, might not fully grasp the importance of ethical journalism. However, there is hope that regulations will be put in place to address these issues. In politics, the line between communication and policy has blurred, with tweets shaping reality more than actual policy decisions. The current administration is reactive to media and social media, often lacking rigor in their policies. In this environment, tweeting something into reality has become a common practice. Elon Musk was known for making policy decisions based on tweets he saw. However, the current sentiment is that people are growing tired of political influence operations, and there may be regulations implemented to address the issue. The current federal government is facing challenges in executing tasks effectively, leading to a decrease in productivity at the White House.

There is anticipation for a reckoning where the truth is sought after, as trust in tech companies wanes. The role of journalism is questioned in amplifying populist reactions, as social media easily validates such sentiments. The upcoming midterms may see a shift in alignment due to issues surrounding surveillance and data centers.

The regulation of AI technology is a pressing issue, with the federal government taking a more active role in shaping technological policies. The idea of running as a populist while investing in AI companies raises questions about the redistributive nature of such moves.

Overall, the landscape of politics and technology is evolving, with significant structural shifts that will impact future policies and decision-making processes. The Kushner family is heavily involved in that.

When you have that money in your organization and those individuals on your various boards at events, and journalists on the ground in those locations, how do you reconcile it with the ideals of independence?

We extensively cover Saudi Arabia and the United Arab Emirates with a robust approach. We have hired top reporters from Bloomberg and The Wall Street Journal in the region. Despite having no investment funds from the Gulf and many sovereigns, we maintain independent coverage. While there are executives from that region on advisory boards, our reporting remains impartial, similar to other reputable news outlets like the Financial Times and The New York Times. Operating in regions like the Middle East and China comes with challenges due to strict local laws.

Our coverage delves into unique stories, such as the Emirates’ restrictions on photojournalists distributing images. This underscores the complexities and risks faced by reporters in these regions, necessitating caution and adherence to journalistic standards.

Regarding the Trump administration’s treatment of journalists, the situation in the United States, while flawed, is far from the suppression of free speech seen in autocratic regimes. The personalist rule and familial connections prevalent in some business dealings mirror practices in other parts of the world, including the Trump administration.

The utilization of AI in newsrooms is a topic of ongoing debate. While AI tools can enhance efficiency and productivity, ethical considerations must be paramount. Implementing AI in news production requires a balance between technological advancements and journalistic integrity. I am quite optimistic about AI, but I believe that the essence of reporting lies in uncovering new information that is not readily available on the internet and then sharing it with others. The process in between, which involves production, is susceptible to AI. However, I think the core aspects of reporting are quite secure.

The conversation we just had is similar to the discussions we often have over beers. It’s a good argument, and I will eventually come around to it.

Regarding the AI tool for podcasts that allows you to fix mistakes without re-recording in the studio, I think it’s acceptable as long as it is not deceiving the listeners. Editing for minor errors is fine, but creating a false narrative is crossing the line.

Ultimately, the key factor is whether someone is being misled. If the guest is being deceived, then it is definitely unethical. Television practices of reshooting questions are common, but in today’s climate of transparency, full transcripts are often required.

Thank you for the engaging conversation. It was a pleasure to be on the show, and I appreciate the opportunity. Feel free to reach out to us at decoder@theverge.com with any questions or comments. We make it a point to carefully go through each and every email that comes our way!

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