Dana Blankenhorn

The Coming Streaming Shakeout

Streaming is about to learn what the printed web learned 20 years ago.

In a world of unlimited content, the gating factor for your audience is time.

There’s a corollary. Don’t depend on ads to make up for this. There’s just too much inventory.

I have a bad tendency to be early to things. I screamed about the dot-com bubble in 1997. I’ve been yammering about the coming streaming crash since 2019.

But now it’s here. First Netflix (NFLX) fell from grace. Then Disney (DIS) did the same. The Cloud Czars are worth half what they were now that you can get paid for having money. When interest rates were 2%, a price to earnings multiple of 45 looked OK. With money at 5% you need to be below 20 to be competitive.

Positives of a Tech Recession

Despite some stunning investment losses, I’m enjoying the latest tech recession.

No one likes a recession, but sometimes it’s like spring cleaning, necessary to clear the excess. There were a lot of zombie technologies, zombie companies and zombie assumptions that have been overrun since the Fed decided that money should cost money and there should be less of it around.

Web3, the metaverse, and crypto were all fake from the jump. Advocates for streaming and podcasting didn’t understand that the gating factor is time, not money. A lot of companies were selling themselves based solely on sales growth, ignoring the need for profit.

This means there’s now opportunity, in the form of talent, for new ideas that will power the economy forward. The main trends I described in 2019 – the end of oil, the Machine Internet, and DNA as a Programming Language – they’re still on. But there’s a lot more, too.

Fixing Twitter on Mastodon

Twitter is broken beyond repair.

But it can be fixed. On Mastodon. If users learn something I learned back in 1988.

I’m @danablankenhorn@journa.host on Mastodon. Journa.host is run by Adam Davidson, formerly of The New Yorker. It’s one of thousands of servers supporting Mastodon on the Internet.

Users can block users on Twitter. But on Mastodon servers can also block servers. Users can also move between servers. This means people choose whatever server conforms to their standards on what should be blocked and what allowed. You can have alt-right servers, alt-left servers, and alt-bicycling servers.

A lot of people, looking at Mastodon over the last few weeks, have looked askance at this. People are isolating behind their server walls, they complain. Or they might.

But that was always true for Twitter. It was designed to be. The problem is that many people didn’t use their block commands aggressively enough. Journalists amplified extreme views by retweeting them. Hate was amplified by user outrage.

Urban Game Changer

I’ve been a bicyclist my whole life. My present one dates from 1981, and it works great. (Here it is in Centennial Olympic Park last year.)

I know most people aren’t me. Bicycling remains a niche activity. Bike lanes are rare because there is little demand. Rail lines scale, but they’re inflexible. Cars offer comfort, but roads don’t scale. The urban environment is little changed from when I came to Atlanta in 1981.

I’m getting older. At 67, the heart rate needed to maintain a good speed for a half hour is near my limit. All I’m good for at the end of 10 miles today is a nap.

But electric bikes are a game changer. I finally bought one this week, a Lectric 3.0. It unfolded from its box in about an hour and took no tools to set up. The battery runs 20-40 miles between charges, for which you use a 3-prong wall plug and a power supply just like your old laptop. Anyone can get it to go 10 mph, even over hills. You can buy a passenger seat or grocery baskets.

A Community Model for Web Publishing

Even before the Web was spun, I was arguing against the standard publishing model for the Internet. (Picture from Wikipedia.)

That model was built on advertising. You aggregated people based on their location, industry, or lifestyle, by covering their interests and advocating for them. You then sold billboards alongside that content and, if charging for the paper, only get back its distribution costs.

What I argued for instead, as early as the mid-1990s, was for a marketplace model. You’re still collecting readers, but your content leads them down a sales funnel, and you’re seeking commissions on those sales from your business partners based on your credibility.

One of my favorite memories is of the 1995 Christmas party of the Atlanta Press Club, where James Cox Kennedy, then the local paper’s publisher, claimed he could repurpose content online by putting different URLs in front of it, like yall.com. I laughed so hard I cried. I nearly doubled over.

By the time publishers expressed interest in the marketplace model, of course, it had become useless. This was thanks to Doubleclick, which was founded in Atlanta and later bought by Google. Google made it possible for anyone to aggregate their own audience and buy it at a run-of-network rate. The fact that you’d need 10 times more impressions to get the same impact was seen as a feature, not a bug. And the price of those ads continued falling, thanks to the Web’s unlimited inventory.

The Enemy is Religious Nationalism

The 2022 election mostly put Trumpism into the rear-view mirror.

What it revealed was the larger political battle of this decade, between secular democracy and religious extremism.

I’m not against God. But there are two problems with religious nationalism.

First, it’s intolerant. Wherever one religion rules, its adherents outlaw any faith but their own. This is true for Hindus in India, for the Russian Orthodox, even for Buddhists in Burma. It’s true for Jews in Israel and for fundamentalist protestants in the United States.

This remains true despite every great religious teacher, from Gautama to Vishnu to Confucius, from Moses to Jesus to Mohammed, all the way to Joseph Smith, teaching first the way of tolerance. Love your neighbor. Care for the less fortunate. Seek the enlightenment of faith for yourself.

It’s the leaders of these faiths, the Popes and the Mullahs, the Rabbis, and the Brahmins, who twist it into something else. There is a reason for this. Those faiths that adhered to tolerance were, over time, wiped out by leaders of the intolerant. This is the true original sin.

The Coup Succeeded

January 6 wasn’t THE coup. It was a coup, an attempted coup, a failed coup.

But there is a coup that succeeded, that toppled American democracy, possibly for all time.

This was the McConnell coup. By succeeding, during the course of 4 years, in getting three unqualified political hacks onto the Supreme Court, Mitch McConnell won the power to redefine the Constitution and destroy American democracy.

That work has barely begun.

Is This The End of Crypto?

I wrote about cryptocurrency a lot, late in the last decade.

I finally decided it was trash.

There’s no there, there. I can find no blockchain applications superior to what you can do in other ways. Bitcoin and Ethereum claim they’re better than other coins, but the market remains crooked and opaque.

All this came crowding in this week when FTX collapsed. FTX was the creation of a 20-something (now 30) named Sam Bankman-Fried, whom my son now calls Bank Man Fried, as in French fries.

Hopium and Copium

As the election approached, my fear rose.

I gave up on the news. I turned off the TV. I hid myself away and got high on Hopium.

Hopium is a warm feeling of hope, the idea that people are good, that they’ll see things as they are, that they’ll do the right thing. It came mostly from Twitter, then mostly from Simon Rosenberg, who followed the early vote for The Democrats. They were coming out, he said. Coming out in numbers. Coming out by the millions. Coming out nearly everywhere.

I don’t recall there being early voting when I was young. In New York everyone did it on the day. I remember an Election Day line in 1976, when I was at Rice, but it wasn’t very long and the weather was warm.

Lies Unmet Become Truth

In politics, lies that are not met with truth become the playing field.

There are some huge ones this year.

The Economy

We’re told, and assume, that the economy is terrible. It’s not.

There is inflation, but full employment and pay raises means the impact on most families is modest. The U.S. GDP rose 2.6%, on an annual rate, in the last quarter. Thanks to the government, millions of families have savings, a cushion against hard times, to see them through, at least for a while.

But this year has sucked for one group of people. Investors. Especially rich investors.

The men who control the Cloud Czars have lost trillions of dollars in market cap this year. Elon Musk and Mark Zuckerberg have each lost $100 billion of their fortunes. But these losses are dwarfed, in impact, by the trillions more lost by smaller investors, and speculators, in SPACs, in crypto, in stocks and in bonds.

We don’t live on our investments. We’re not supposed to. Those who are near retirement, like me, are supposed to move into cash and interest-bearing accounts for living expenses. Those who have done so are doing OK. For the first time in decades, we can get a return on our money. The return is guaranteed when you buy I-Bonds, government paper whose interest rate is indexed to inflation.

But the rich are “suffering” and they are busy convincing the middle class they must make up the difference, and that until the poor truly suffer the Fed can’t be expected to ease off. Remember, the rich demanded the Fed fight inflation, last year. The Fed has and they haven’t responded. It’s their own fault.