Thought starters: growth of Substack, dominance of NY Times and China vs USA

A look at some of the stories that have caught my eye over the last couple of weeks. These include the impacts of the coronavirus, the growth of Substack email newsletter platform and competition between China and the USA.

It’s no secret that the coronavirus has seen ecommerce experience something of a purple patch in 2020. Benedict Evans does a good job of pulling figures together from the UK and the US. It will be interesting to see what happens when lockdowns ease and fears of infection subside:

Substack is the new kid on the block providing a new outlet for journalists and commentators to reach audiences and earn a crust. Clio Chang looks at the opportunities it provides but also suggests that it doesn’t necessarily upend barriers to new voices emerging:

Substack, established in 2017 by three tech-and-media guys—Chris Best, Hamish McKenzie, and Jairaj Sethi—is a newsletter platform that allows writers and other creative types to distribute their work at tiered subscription rates. Newsletters go back at least as far as the Middle Ages, but these days, with full-time jobs at stable media companies evaporating—between the 2008 recession and 2019, newsroom employment dropped by 23 percent—Substack offers an appealing alternative. And, for many, it’s a viable source of income. 

You can find more commentary and writings about Substack here. Among the writers who have joined Substack recently is ex Vox editor Matthew Yglesias who writes about the dominance of the New York Times in the US media ecosystem:

But fundamentally the digital media startup dream of obtaining massive scale and disrupting the incumbents hasn’t really worked. So we’re left with a giant that’s incapable of self-scrutiny, because that might lead to implosion, paired with a set of institutions that increasingly all reflect the same worldview and do so in very strange ways.

Language is often not as neutral as we would like it to be and the technology sector is certainly no exception. The NYT Open Team look at what theyre doing to create more inclusive language in the way they talk about technology:

Whether it’s terminology like “master” or “blacklist,” words with harmful connotations have been baked into tech communication for decades. Words like these bring with them the weight of slavery and discrimination, and signal that those who have held power in the tech industry have had the privilege to ignore the impact of these antiquated terms. People of color are still underrepresented in tech, and the industry’s continued use of these terms acts in direct opposition to an inclusive and equitable culture.

America’s handling of the coronavirus epidemic hasn’t exactly done wonders for the country’s international reputation. Despite this, Tyler Cowen still sees the country in a favourable position when compared to its key global competitor, China:

Overall, it would be a mistake to be pessimistic about China. Its on-the-ground campaign against Covid-19 was very effective, its leadership pays great heed to science, it just signed on to a large Asia-Pacific trade deal, and its economic growth has resumed. Chinese supply chains proved remarkably robust through the major global crisis of the pandemic.

Still and all, the fact remains: When it comes to the ideas and the people that matter, America and the West are not losing the lead.

US government imposed restrictions on the supply of technology to Huawei have exposed how vulnerable elements of China’s economy is to global supply chains. Pranay Kotasthane and Rohan Seth take a look at the challenges the Chinese government faces in developing a semiconductor sector that would free it from the dependence on US technology:

Does this silicon rush mean that China will become self-sufficient in semiconductors soon? Not quite. China’s state-backed funds may well spur private investment, even producing a few champions, but such moves are unlikely to result in a self-sufficient Chinese semiconductor industry any time soon.

The Republican Party has traditionally been happier to cosy up with big business. Given this, it’s interesting to read research which suggests American CEOs are increasingly favouring the Democratic Party in a trend that pre dates the arrival of Donald Trump. I like to think we might see a growing counterbalance to the likes of the Koch Brothers and other associated libertarian and conservative voices:

We demonstrate that since the early 1990’s, it is becoming increasingly common for firms to be run by CEOs who are aligned with the Democratic Party, which we refer to as the blue trend. We find evidence that at least one factor driving this trend appears to be the rise of the role of women, who tend to have values that align with the Democratic Party. Further, we find that the blue trend is stronger in industries that are more considerable to women as a source of employees or customers (e.g., hospitality, computers, etc.).

The rise in Donald Trump, Brexit and various other contentious subjects has not always helped in the fostering of intelligent debate. Paul Graham’s hierarchy of disagreement provides a valuable way of filtering out those critics who are well off the mark:

I have found debates over Corbyn’s sacking and reinstatement both interesting and tricky given the need to differentiate between anti semitism and criticism of Israel’s policy towards Palestinian territories. I found this post definitely saw me take a more critical stand towards Corbyn and David Schneider’s write up helped in understanding where lines are that should probably not be crossed:

It’s obviously not my place to tell Palestinians how they should define their oppression, but for the rest of us, people need to be able to criticise Israel and Jews need to be reassured at a time of rising antisemitism.

With careful language, we can do both.

Sarah Zhang provides a thoughtful look at the introduction of widespread prenatal testing for Down Syndrome in Denmark. This has seen the condition become increasingly scarce among the country’s children:

Denmark is unusual for the universality of its screening program and the comprehensiveness of its data, but the pattern of high abortion rates after a Down syndrome diagnosis holds true across Western Europe and, to a somewhat lesser extent, in the United States. In wealthy countries, it seems to be at once the best and the worst time for Down syndrome. Better health care has more than doubled life expectancy. Better access to education means most children with Down syndrome will learn to read and write. Few people speak publicly about wanting to “eliminate” Down syndrome. Yet individual choices are adding up to something very close to that.

Any media consumption now has to compete with our ever present smartphones for attention. Kyle Chayka points to Emily in Paris as an example of the growth of ambient TV thats designed to complement the distracted viewer rather than require close attention.

But all of that barely matters. The purpose of “Emily in Paris” is to provide sympathetic background for staring at your phone, refreshing your own feeds—on which you’ll find “Emily in Paris” memes, including a whole genre of TikTok remakes. It’s O.K. to look at your phone all the time, the show seems to say, because Emily does it, too. The episodic plots are too thin to ever be confusing; when you glance back up at the television, chances are that you’ll find tracking shots of the Seine or cobblestoned alleyways, lovely but meaningless. If you want more drama, you can open Twitter, to augment the experience. Or just leave the show on while cleaning the inevitable domestic messes of quarantine. Eventually, sensing that you’ve played two episodes straight without pausing or skipping, Netflix will ask if you’re still really watching. Shamed, I clicked the Yes button, and Emily continued being in Paris.

Header image: Mural by Thierry Noir by Zetland House in Shoreditch, London

Thought Starters: young people’s media and device use, Facebook Messenger’s evolution, grey zone conflicts and the gender pay gap

Thought Starters provides me with a chance to look through articles, research and opinion pieces, highlighting interesting trends, developments and changes in the world you and I live in.  Among the stories and research we look at in this edition are the habits of children and young adults, the growth of Facebook Messenger, grey zone conflicts, the gender pay gap and lots more.

There’s been growing speculation that Twitter may increase the character length of its posting as it looks to get ahead of Facebook in its user growth stakes (see below).  Shira Ovide gives a strong argument for retaining it as it is, although I would argue there’s definitely scope for excluding links, images and video URLs from tweets’ character limit:

Comparison growth monthly active users of Facebook and Twitter

Younger audiences given an indication of future habits of  the general population. Dan Kopf analysis young adults habits in the American Time Use Survey which unsurprisingly points to growing gaming, computer use and reading and decline in time spent watching television:

Which leisure activities are twentysomethings spending more time on?

Benedict Evans on the other hand has used Ofcom’s Children and parents: Media use and attitudes report to look at the habits of British children which points to the substantial transition to mobile phones and tablets:

What would children miss

Flurry has released their analysis of Europeans’ use of smartphones and tablets based on their app data which shows wide variations in device penetration as well as giving clues on how mobile devices are being used:

Smart device penetration in Europe

Facebook has done a great job of transitioning to a mobile world with 78% of its ad revenues now coming from mobile. Facebook though is not one to rest on its laurels, with Facebook Messenger seen as a key component in strengthening its hold on mobile consumers. Facebook has just published a review of highlights for Messenger from 2015 which gives an indication of the social network’s ambitions for the mobile messaging service:

Facebook Messenger 2015 highlights

As mobile phones approach market saturation in developed markets, consumer electronics brands are looking to new categories for a boost in their revenues. Unfortunately for the brands, Accenture‘s global research profiled by Matt Rosoff  suggests that consumers aren’t getting caught up in the hype for new products despite a growing array of offerings:

Consumers are bored with today's tech and nervous about tomorrow's

Gartner’s CMO Spend Survey points to growing marketing budgets and an emphasis on digital commerce, innovation, sales conversion and customer retention. You can find further analysis of the survey results from Simon Yates who points among things to the blurring distinction between offline and online marketing:

Marketing budgets continue to grow

Interested in knowing what jobs are likely to keep you employed into the future? The Federal Reserve Bank of St Louis has analysed employment and unemployment rates for jobs on the basis of how routinised and levels of cognition which might give you some pointers whether you need to be retraining:

Routine vs Non Routine Cognitive vs Manual EmploymentFigures from Bloomberg point to the substantial cuts in employment some banks have taken post financial crisis. It might be rather too optimistic to hope that those people whose actions fueled the crisis might have been among the first to leave:

Staff cuts at the World's biggest banks

Cass R. Sunstein profiles Gabriel Zucman’s The Hidden Wealth of Nations: The Scourge of Tax Havens, examining the growing role that tax havens play in enabling corporations and the wealthy to avoid paying their fair share of taxes. Zucman’s analysis provides a guide to the scale of the problem and also points to the successes and failures different institutions have had in addressing the problem of tax evasion:

In the aftermath of the financial crisis, you might expect that there would be an international crackdown on the use of tax havens, and as we shall see, international attention is indeed growing. But the numbers demonstrate that no crackdown has occurred. In Luxembourg, offshore wealth actually increased from 2008 to 2012 (by 20 percent). In Switzerland, the increase has been comparable; foreign holdings are now close to an all-time high. Disturbingly, the new wealth is coming mostly from developing countries, which poses a serious problem in light of the severe strains on their limited budgets.

China’s economy is going through a rough patch, with the share market in a nose dive.  Given the over inflated valuation of many of the assets. Given the overinflated value of many of the assets in the country’s equity markets, this trend is unlikely to change (unless the government chooses to prop it up):

China Battles to Shore Up World's Priciest Stock Market

High profile Silicon Valley venture capitalist Paul Graham’s recent blog posting in which he argues that income inequality per se is not a bad has inevitably kicked up a storm of reactions. Among the more nuanced responses is Ben Thompson’s analysis who points to the risks and benefits associated with a more deregulated economy and calls out for the need for a strong social safety net that is independent of our employers:

Technology is changing the world, and it is naive to not expect the world to begin to push back. Rather than always be reactionary, it is past time for the technology industry broadly and Silicon Valley in particular to get serious about what that world will look like in the future, especially given the fact there is actually a way forward that is a win for not just technology companies and their investors, but for those who are impacted — i.e. everyone. Just as we should separate the means by which Uber allocates drivers from the ability to pay for a ride, it makes sense to separate work from the provision of a social safety net, and those most able to capitalize on this new world order should be the most willing to pay.

The conflict in Syria and the resulting flood of refugees fleeing to Europe is unfortunately leading to an anti immigration backlash in many European countries. Victims aside from the refugees fleeing harm in the middle of a European winter include the Schengen Agreement which previously allowed the free flow of people across much of mainland Europe:

Recent changes to crossing Europe's borders

Peter Pomerantsev uses the examples of China in the South China Sea, Russia in Crimea and Syria and ISIS with its terrorist attacks to highlight the growing importance of messy grey zone conflicts around the world:

It’s a brave new war without beginning or end, where the borders of peace and war, serviceman and civilian have become utterly blurred—and where you and I are both a target and a weapon.

Whilst we’re on the subject of globalisation and its impacts, The Economist has updated its Big Mac Index, pointing to who is paying over the odds for their guilty pleasure:

The Big Mac Index

The Freakonomics podcast is one of my regular listening appointments and this week’s edition looking at the causes and effects of the gender pay gap is well worth downloading.

The featured mural is by eko from his Flickr page.

Thought Starters: looking critically at mobile apps, venture capital, how Volkswagen ***ked up and the decline of pornography

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

Consumers are spending more of their time on their smartphones in mobile apps which inevitably leads many media owners to see the development of their own as a means of increasing consumer engagement. Priya Ganapati warns that this approach is flawed in many cases with the development of mobile web offering providing a much better use of resources:

“Apps aren’t magical universes. They are part of a platform that is not viral, resource-hungry and hard to grow. So why not bet on the mobile web instead?”

Sam Altman and Paul Graham look critically at the financial fundamentals of startups in a market where valuations don’t necessarily match up with future prospects:

“Here’s a common way startups die. They make something moderately appealing and have decent initial growth. They raise their first round fairly easily because the founders seem smart and the idea sounds plausible. But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderately appealing) the growth never comes. Now they’re rapidly running out of runway. They hope further investment will save them. But because they have high expenses and slow growth, they’re now unappealing to investors. They’re unable to raise more, and the company dies.”

Also looking at the startup universe is Ben Thompson who points to less successful venture capitalists as being increasingly squeezed between angel investors below and more traditional investors above:

“So it is with venture capital: once startup funding requirements were reduced, the superior information and the willingness to hustle of angels and incubators earned the trust of the big companies of tomorrow, reducing more and more venture capitalists to dumb money hardly worth the 20% premium. The inputs to the Silicon Valley system have been changed, and we’re only now seeing the effects, and that should be a cautionary tale for just about everyone who thinks they and their industry are safe from the Internet’s impact.”

Matt Roskoff contrasts the falling prices of consumer electronic hardware with the rising price of television and radio services:

Prices for Electronic Goods and Services

Paul Kedrosky suggests that the Volkswagen emissions scandal may have been the result of cultural norms within the engineering department rather than a deliberate move on the automotive manufacturers management:

“It is still possible, of course, that we will learn that the engineers were under orders from management to beat the tests by any means necessary, but based on what we now know, that seems implausible. It’s more likely that the scandal is the product of an engineering organization that evolved its technologies in a way that subtly and stealthily, even organically, subverted the rules.”

Credit Suisse in their annual Global Wealth Report looks at the current spread of financial wealth across countries and regions including the disparities between the wealthy and the poor:

Global Wealth Pyramid

We are seeing a broader array of jobs affected by technology, as smarter systems enable more technically complex tasks to be automated. MIT Professor David Autor looks at the costs and benefits of these changes, suggesting that the opportunities will outweigh the threats if societies ameliorate the negative effects with education, taxation and transfer programmes.

The migrants pouring into Europe has focused largely on the plight of refugees fleeing civil war in Syria. What Alex Tabarrok points to is that by focusing on the plight of refugees, we fail to acknowledge the benefits that more open borders would provide both to people trapped in less developed societies and to global society as a whole:

“Closed borders are one of the world’s greatest moral failings but the opening of borders is the world’s greatest economic opportunity. The grandest moral revolutions in history—the abolition of slavery, the securing of religious freedom, the recognition of the rights of women—yielded a world in which virtually everyone was better off. They also demonstrated that the fears that had perpetuated these injustices were unfounded. Similarly, a planet unscarred by iron curtains is not only a world of greater equality and justice. It is a world unafraid of itself.”

Pornography has been getting plenty of column inches lately thanks to Playboy’s announcement that it will no longer be publishing full nudity, reflecting falling profitability of ‘legitimate’ operators (no tears shed here). Whilst the industry has long been pointed to as technological leader, recent changes mean that the sector is becoming something of a technological laggard according to Cade Metz:

“With the rise of mobile devices and platforms from the likes of Apple and Google, not to mention the proliferation of free videos on YouTube-like porn sites, the adult industry is in a bind. Money is hard to come by, and as the industry struggles to find new revenue streams, it’s facing extra competition from mainstream social media. Its very identity is being stolen as the world evolves both technologically and culturally.”

Another area where technology has changed the balance of power is music where we’ve seen a democratisation of the tools of production. Art Tavana looks at GarageBand’s role as a stepping stone for many budding musicians looking to get their music out and about.

If you find yourself in London between now and the start of January, I’d definitely recommend visiting Ann Veronica Janssens’ yellowbluepink installation at the Wellcome Collection. A great exercise in disorientation:

The featured image is the SatOne mural Insomnia in Mannheim, Germany and published in Graffuturism.