Bit of a slow news week in terms of quantity, but a couple stories that have me feeling like we’re on the edge of some big paradigm shifts… Would love to know your thoughts: just hit reply to get in touch.
The Commerce Bubble
I’ve spent the past few weeks writing technology buying guides for a new section at a big publisher. It’s a fairly common strategy these days, thanks to the massive revenue you can make from affiliate e-commerce deals: with Amazon you get up to 10% kickback for referring a customer to the site.
My vested interest in the topic meant this tweet from Rafat Ali (founder of Skift) struck a chord:
I haven’t fully reasoned this out yet, but do think the commerce bubble for publishers will also burst in the medium term, whether coz brands being sold thin down or companies like Amazon change the terms, or some other reasons yet unknown...
I think he’s probably right. Affiliate deals have all the hallmarks of an industry that’s growing just a bit too quickly: Marie Kondo just raised $40m because she’s apparently a great influencer; and there are too many competing buying guides, many of which are shockingly low-quality.
Amazon are in a position where they could massively cut the amount they pay out, and it wouldn’t surprise me if Google started to clean up search results to improve the quality of the buying guides they feature (and stop showing so many duplicates). Either could really hurt publishers that have become increasingly reliant on affiliate revenue…
PS: BuzzFeed’s Jonah Peretti published a strategy memo this week (pretentious title, decent content), in which he mentions e-commerce a bit. BF are going to start offering a sponsored content and affiliate combo deal, which seems smart – a way of diversifying from being reliant on just one revenue source on product-based articles.
Privacy is the new sharing?
I’m sure you’ve seen Zuckerberg’s big announcement that he’s pivoting Facebook towards privacy: an increased focus on private messaging and small private groups. There’s been some debate about how serious he is about this (read this from Casey Newton about that), but let’s assume he’s being honest about his intentions.
The obvious comparison is that Facebook is trying to emulate WeChat, aiming to shift its revenue model from advertising to payments. That could maybe work, though I’m sceptical about whether FB has the trust needed to do it…I sent some friends £1 through Messenger Payments once as a test and none of them claimed the money because they didn’t want to give FB their bank details. Anecdotal, but might be a bit telling.
More relevant to The Intersection is how this might affect publishers, who obviously derive a lot of their traffic from the News Feed: if that stops being prioritised, will it hurt publishers? Axios’ Felix Salmon thinks no, saying most shares come from “dark social” anyway (private messages and emails), and that’ll only continue, if not increase.
But The Guardian’s Chris Moran thinks it will cause problems, citing News Feed’s importance to surfacing content to readers that might not otherwise see it. I think he’s probably more right – though maybe Facebook will continue its trend of copying Chinese apps and put out a Toutiao lookalike soon too…
PS: Rafat again, suggesting Google Maps might already be a WeChat-style superapp.
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Tidbits
WSJ is setting up a bunch of new departments: the one focussing on building young audiences is particularly interesting and a fantastic idea (The Times and Telegraph desperately need to do this).
Google’s game controller has been shown in a patent…expect to hear more on this and their game streaming project at GDC next Tuesday.
Also on the subject of game streaming, Sony’s just released Remote Play support for iOS, so you can play your PS4 from anywhere…
JP Morgan thinks Disney+ will get 160 million subscribers (more than Netflix has). Analyst Rich Greenfield sums this prediction up nicely: “this is a time capsule keeper #special 🤣🤣🤣”.
Apple's still being puritanical about their original video content. Sure, networks have always interfered...but part of the reason creatives love working with netflix is bc they don't interfere!
An interesting thread from Antti Oulasvirta on the science and physiology behind AR and VR interaction (and why nothing out there works very well). I think he's right about holodeck style interfaces, but I've never thought of that as being the primary interface here...I think it'll end up being a lot more passive and voice controlled.
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Final Thought
Lots of publishers are moving increasingly away from media, and that’s become more clear than ever this week. The FT bought TNW (seemingly for their events business), and Advance Publications (best known for owning Condé Nast) just bought ed-tech plagiarism detection company Turnitin. Money might be flowing into media, but it’s not being used for content creation…
Have a wonderful week!