Judgment Day Arrives at the Washington Post

And updates on seven other recent articles at The Honest Broker

Predicting the future is risky business. But it’s even more dangerous nowadays, because everything changes so quickly.

I can look like a fool or genius within 48 hours of publishing an article. And there’s no hiding—everybody else gets to measure my results against real world results.

I’m happy with my track record. But it’s always useful to look back and see what actually happens after I give my verdict. That’s why I provide updates on previous posts.

Below I revisit some of my most controversial recent articles, and examine what happened subsequently.

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JUDGMENT DAY ARRIVES AT THE WASHINGTON POST

In my article “Judgment Day Has Arrived for the Journalism Business,” I argued that most newspapers and media outlets have failed to understand the changing economics of journalism.

I pointed out that the only real growth businesses in journalism right now are built on the subscription model. Chasing ads and clicks is a losing strategy. If you can’t convince people that your writing is worth paying for, your prospects are dismal.

The latest news from the Washington Post makes clear how bad things have gotten at legacy media—especially when they fail to attract subscribers. Subscriptions at the Post are down 15%, and total readership has dropped an agonizing 28%. Clicks and advertising not only fail to compensate, but (as anticipated) make the problem worse—digital ads at the Post are down even more than subscription revenues, collapsing by 30%.

As a result, the Post plans to eliminate 240 jobs—around 10% of its 2,500 employees. Metro coverage will see a savage 25% reduction.

This is exactly what happens when you zealously use a paywall, but don’t build subscriptions.

But the CEO of the Washington Post offered a different interpretation:

“This is a really good business that we overshot on expense,” Stonesifer said at a company-wide meeting. “And so we’re trying to right-size that to make sure we can plant the seeds and make the investments in the things that we need.”

I’m curious to learn how this is a “really good business” if every revenue source is shrinking.

But that’s what denial looks like.

And when you’re in denial, your problems get worse, not better. In this case, reducing news coverage will merely accelerate the decline in subscriptions and advertising.

So it’s still judgment day for newspapers. Meanwhile alternative platforms for journalism are not only growing, but some are growing rapidly. I plan to write about this bifurcation, and what it means for media, in the near future.

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SOCIAL MEDIA GOES TO WAR AGAINST WRITERS

In September, I wrote about social media going to war against writers.

The war has escalated—and reached absurd levels. Consider this chart:

Source: Axios

That’s all driven by Mark Zuckerberg and Elon Musk—who want to stop people from accessing news. Any media outlet that is outside their control is the enemy.

And they are actually getting more tyrannical. Twitter now won’t even show headlines for news articles.

This is bad for writers. But it’s even worse for society. Journalism today is far from perfect, but when you remove news from public discourse, the void is filled with all the toxic stuff that is the specialty of social media—rumor, insults, lies, spin, and other garbage.

That’s the state of play at the so-called free speech platform—which has launched the most intrusive shadowbanning campaign I’ve ever seen. I refuse to use the name X for the platform, but that may be a fitting symbol for a company that crosses out anything it can’t control.

Postscript: On a related note, I am now active on the Bluesky social media platform (tedgioia.bsky.social)—where news headlines haven’t been banned—as well as on Substack Notes. I recommend both, but Bluesky still demands an invitation to set up an account. So Notes is your best bet for news links and analysis.

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THE SONG BUYOUT MANIA HITS A WALL

Almost immediately after I published my assessment of a major investment fund selling songs in its portfolio, the situation got much worse.

• First, the chair of Hipgnosis Song Fund Andrew Sutch announced he was leaving—likely in response to shareholder frustrations.

• Then shareholders moved to block the planned sale of songs—raising concerns that music was being sold for less than its market value.

• A few days later, the CEO of Hipgnosis Song Group Kenny MacPherson got accused of sexual assualt and harrassment. He immediately took a leave of absence.

Can things still get worse? They absolutely can—the whole fund might get dissolved.

Needless to say, I continue to stand by my negative assessment. I love old songs, but just for listening and not investing.

Postscript: Just a few hours after I published this, Hipnosis Song Fund cancelled its dividend, and the share price dropped to a new all-time low.

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50 YEAR CYCLES OF HOT AND COOL CULTURE

In a highly speculative two-part article (here and here), I claimed that we are living a culture that shifts from hot cycles to cool cycles—each one lasting around 50 years. We are currently in the middle of a hot cycle.

I know this sounds like poppycock. But I reached this conclusion while researching my book on the history of coolness. I can’t overstate how shocked I was to discover that the cool ethos permeating American culture during my formative years was just a passing phase.

I had assumed that everyone always wanted to be hip and cool. But at the very moment when I started researching and writing the book, something was shifting. Hipster even turned into a term of abuse. But in a hundred other ways, I saw the culture getting hotter and hotter—promoting aggression, not coolness.

Now I’ve encountered a social scientist with a very similar story to tell. Peter Turchin has spent decades creating an enormous database in order to determine the laws of history, drawing on advanced data analytics. In fact, he is so ambitious that he is studying ten thousand years of history, and forcing it to reveal underlying rules and patterns.

Turchin has just published a book that shares his findings. It’s called End Times: Elites, Counter-Elites, and the Path of Political Disintegration.

And guess what? Turchin also discovers 50 years cycles of hot and cool—but he draws on completely different evidence than mine. I was looking at music, movies, books, fashion, and cultural style. In contrast, Turchin was studying wars, politics, and historical conflicts.

But we reached identical conclusions.

Here Turchin tries to summarize what Big Data tells him about societies in crisis—explaining it in the simplest terms possible:

When we look closely at the disintegrative phases, we discover that they are not uniformly grim. Instead, the level of collective violence tends to follow a rhythm. One generation (“the sons”), scarred by violence, keeps uneasy peace. The following generation (“the grandsons”), who grew up not being directly exposed to violence, repeats the mistakes of the grandfathers. This dynamic sets up a recurrent cycle of violence of roughly fifty years in length (that is, two human generations), which persists until the structural conditions are somehow resolved, leading to the next integrative phase.

I find it curious that I’m studying Miles Davis, David Letterman, Lenny Bruce, hippies and flower power, etc. and intersect exactly with Turchin’s data anlytics of battlefields and political dissolution.

His entire book is well worth reading.

I continue to stand by my prediction that society is going to get hotter and angrier. But the trend must eventually reverse, maybe as soon as 2025. Coolness and conciliation will finally return—I just don’t see that happening in the coming election year.

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STREAMERS IN PANIC

I’ve warned repeatedly that streaming economics are broken, and customers will see sharp increases in subscription prices.

This was proven true, when most of the streaming services (both video and music) announced significant price boosts.

But even that wasn’t enough. The latest word is that Netflix must raise prices again.

I note that Netflix permanently eliminated its mail DVD service a few days before word spread of the new price increase. It’s easier to put on the squeeze if users have no options besides streaming.

This validates my longstanding position that streaming enticed customers with misleading promises. People dumped their physical media, and decided they could trust tech companies to provide them with cheap and ample entertainment. Yet now it is not quite so cheap, nor as ample.

Most consumers will never return to physical media. But with each passing month, books, vinyl, and disks look like safer, more robust options.

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THE TAYLOR SWIFT ECONOMY

My “Open Letter to Taylor Swift” got a lot of attention. It may be the most widely read article from The Honest Broker this year.

I asked Swift to use her talents and influence to launch a co-op music platform that would be run by musicians for the benefit of the entire music ecosystem—serving artists, fans, and the broader society.

Most readers supported this. A few thought it unrealistic—and those people tended to attack Taylor Swift personally, questioning her abilities and motives.

So it’s worth adding an update on this.

The latest development is that Taylor Swift is already giving a huge boost to movie theaters and fans. Her Era’s tour film quickly sold more than $100 million in tickets—and that’s was a full week before the movie was released.

Swift could have cut a deal with a streaming platform. But she didn’t.

Source: TikTok

Instead she helped theater chain AMC (which has been struggling for survival) to enjoy the biggest sales day in the company’s history. Taylor Swift fans are now giving a financial boost to 7,500 local movie theaters all over the world.

And in a related move, Beyoncé announced that she also would release a concert film for distribution in movie theaters.

That’s how it’s done. Everybody benefits—except maybe Amazon, Netflix, and Apple.

And if Taylor Swift and Beyoncé can have this much impact on the movie business, imagine what they can do for music, which is their specialty.

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IS APPLE STILL A FAST GROWTH COMPANY?

In my article on why Apple will acquire Disney, I pointed out that both companies benefit from this deal.

But some readers were upset when I said that Apple’s growth rate was slowing dramatically.

So it’s worth pointing out that Apple’s CEO Tim Cook sold 511,000 shares of the company’s stock at the start of October. That was a $88 million transaction.

It doesn’t look good when the CEO dumps a lot of stock. Of course, we will know more after Apple announces its quarterly results on November 2.

I don’t expect impressive numbers.

I continue to stand by my prediction that Apple will struggle to grow sales just 5-10% annually—unless they make a bold move. By comparison, Steve Jobs generated 44% compounded growth during the last five years of his life.

Apple still has the reputation of a fast-growing innovative company. But that’s not reality. The House of the Mouse will look more attractive with each lackluster quarterly announcement.

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SPOTIFY IS USED BY CRIMINAL GANGS TO LAUNDER MONEY

I’ve often been suspicious of Spotify, and have criticized the company on many occasions. But I did not anticipate the latest development.

A wild news story tells of an ambitious money laundering scheme. Here’s a description, from David Renshaw in The Fader.

Gang members take the money they make through criminal activity, including drug deals and contract killings, convert it into Bitcoin, and then pay for false Spotify streams of songs published by artists with ties to the gangs. They then take the money paid out by the platform having had it effectively cleaned in the process.

Four gang members, plus one member of the police, verified that this method has been in wide use across Sweden's criminal underworld since 2019, with some of the gangs linked to bombings and shootings in the Scandinavian country.

I doubt Spotify management is responsible or encourages this in any way. But it’s alarming that the company made no response when a police officer allegedly told them about these gang activities.

The investigative police officer quoted in the report claimed he had contacted Spotify to alert them to the criminal activity in 2021 but had failed to receive a reply.

Spotify now denies that law enforcement agencies ever contacted them, and dismisses manipulation as "an industry-wide challenge” that represents a tiny portion of its streams.

But it would be better for everyone if streamers were forced into more transparency and disclosure. Until that happens, I anticipate more scandals of this sort.