Did Zuckerberg invent a Twitter killer?
Threads made its debut Wednesday night with a bang. Meta’s new social network has already collected more than 10 million sign-ups within seven hours of its launch, and has attracted celebrities and politicians such as Oprah Winfrey and Representative Alexandria Ocasio-Cortez, Democrat of New York.
But the presence of big-name advertisers like Procter & Gamble and Ford points to the larger business interests in the battle between Mark Zuckerberg’s new platform and Elon Musk’s Twitter.
Meta bills Threads as a “friendly” forum, but the social media giant is hunting the blue bird. Mr Zuckerberg wants the platform to become “a public conversation app with more than 1 billion people”. And he engaged with his nearly 600,000 Threads followers, answering with a laughing emoji when it was suggested that the new social network could be the undoing of Twitter.
Advertisers are watching closely, even if they can’t buy ads there yet. “Threads could really fly and people are obviously concerned about brand safety on Twitter,” Martin Sorrell, the longtime advertising mogul who now heads S4 Capital, a digital marketing firm, told DealBook.
Twitter’s new CEO, Linda Yaccarino, joined last month in a bid to patch up relationships with big brands that left the platform after Mr. Musk bought it and removed an army of content moderators. “Conflict is negative and not something brands want to deal with,” Mr Sorrell said.
Meta has had its own problems with privacy and dataand some have already expressed concerns about how it will deal with misinformation on the platform. But the company has taken steps to improve and is seen as a real alternative, Mr Sorrell said, adding that the timing of the launch, just as Twitter aims to limit how many tweets users can see, is “advantageous”.
Meta is also able to leverage the strength of its platforms and advertising operations. The company imported features from Instagram, which is used every month by about two billion people. And it’s targeting the same lucrative audience of digitally savvy creators, Adam Mosseri, the head of the photo-sharing app, said in explanatory video.
One sticky feature: If a Threads user wants to delete the account, she must too delete her Instagram account. Would that invite scrutiny from the FTC, which has promised to break about companies that are too laborious to leave a service, DealBook asks?
Mr. Musk was unimpressed. “It is infinitely preferable to be attacked by strangers on Twitter, than to indulge in the false happiness of hidden pain Instagram,” he tweeted.
Not everyone can use Threads. It is available in 100 countriesbut not in the European Union as Meta and privacy watchdogs battle over the company’s handling of user data. There are also no direct messaging or direct options, unlike Twitter.
THIS IS WHAT IS HAPPENING
Fed officials suggest multiple interest rate hikes are coming. Minutes from the central bank’s rate-fixing meeting last month show some officials favored raising rates rather than holding steady as efforts to tame inflation show slow progress. Economists and investors will be watching Friday’s jobs report for further signs of how aggressive the Fed will be on rates this year.
The Biden administration is appealing a decision limiting communication with social media platforms. The Ministry of Justice is looking to overturn an injunction blocking a host of government officials from encouraging companies to remove certain types of content. Meanwhile, the State Department reportedly canceled regular meeting about hacker threats and the 2024 election with Facebook executives.
Donald Trump earns more than $35 million in the second quarter. The amount it was almost double what the former president had raised in the previous three months and shows how multiple accusations do not seem to hurt him politically. Meanwhile, Governor Ron DeSantis of Florida is still struggling to make a strong case against Mr. Trump.
Interest in ChatGPT and others seems to be cooling. Both of them Web traffic and application downloads as the wildly popular AI chat and peers like Bing have declined, according to new research. That suggests the novelty of ChatGPT is wearing off with mainstream users, even like the tech industry remains wildly enthusiastic about artificial intelligence.
Two major entertainment moguls are teaming up
After stepping down as one of Paramount Global’s top executives last year, David Nevins has found a new resting place: CEO of The North Road Company, the studio founded by fellow entertainment veteran Peter Chernin.
The hire gives North Road a chief who has helped produce some of the biggest series of the past two decades, DealBook’s Lauren Hirsch and The Times’ John Koblin report.
Industry officials wondered where Mr. Nevins would go after Paramount. He rose to prominence producing shows like “ER,” “24” and “Friday Night Lights.” He then joined Showtime’s entertainment division in 2010, overseeing hits like “Homeland,” “The Affair” and “Yellowjackets.”
For the time he left last yearMr. Nevins became chief creative officer of scripted content for the Paramount+ streaming service.
Mr. Nevins teams up with a highly regarded Hollywood veteran. Mr. Chernin, who was Rupert Murdoch’s top deputy at News Corp., founded Chernin Entertainment in 2010, producing the likes of “Ford v Ferrari” and “Hidden Figures.” He then created North Road, which includes Chernin Entertainment, last year to establish an independent studio aimed at feeding the appetites of Hollywood.
To build his new venture, Mr. Chernin acquired companies including Kinetic Content, which produced “Love Is Blind” for Netflix, and the documentary maker Words + Pictures, which was behind ESPN’s “30 for 30.”
North Road has a lot of money behind it. It raised $150 million from the Qatar Investment Authority this year, valuing it at about $1 billion. That’s on top of $500 million that the investment firm Providence Equity Partners put into Northern Way at launch, and $300 million in debt financing from Apollo.
Mr. Nevins joins Northern Way at an inflection point for the entertainment industry. After years of rampant spending on content in the name of subscriber growth, streaming services are on the decline as Wall Street has tightened its grip on the strategy.
Mr. Chernin claims that entertainment giants will increasingly focus on working with independent production companies with quality content and solid financing.
“This is going to be a good time to be a well-funded” standalone company, Mr. Nevins told DealBook.
New story for Taylor Swift and FTX
The sudden collapse last year of Sam Bankman-Fried’s FTX caught the attention of a host of celebrities who became paid ambassadors for the crypto exchange, including the famous quarterback Tom Brady and his wife at the time, the supermodel Gisele Bündchen.
One superstar who escaped the mess, however, was Taylor Swift. The pop singer won plaudits for her business acumen after Adam Moskowitz, a lawyer suing Brady and Bündchen over their FTX ties, said Swift passed on a similar sponsorship deal. The truth is more complicated, report The Times’ Erin Griffith and David Yaffe-Bellany:
In an interview with The New York Times, Mr. Moskowitz said he had no inside information on the talks.
In fact, Ms. Swift’s side signed the sponsorship deal with FTX after more than six months of discussions, three people familiar with the deal said, and it was Mr. Bankman-Fried who pulled out. The last-minute reversal left Ms. Swift’s team frustrated and disappointed, two of the people said.
A spokeswoman for Ms. Swift declined to comment.
Canada makes the news
Battle between Canada and Big Tech generated more headlines on Wednesday, after the country’s government pulled advertising from Facebook and Instagram. The reason: Meta, the parent group of the social platforms, said it would block access to news in Canada because of a law that requires technology companies to pay media owners for links to their news content — a regulatory process that is ongoing. closely watched by lawmakers worldwide as a possible model.
The law will come into effect in about six months. The Canadian government says digital platforms, such as Meta and Google, have benefited from free content while eating into publishers’ advertising revenue. The tech companies counter that their platforms have stretched publishers’ ability to reach audiences.
A push to regulate is gathering pace. In 2021, Australia introduced similar regulations. Meta blocked news there, only to relent after tweaks were made. The company and Google later negotiated deals with Australian media companies and publishers made millions. The Canadian law built on the Australian modeland other countries weigh their own measures.
Canada is particularly upset about Meta. Pablo Rodriguez, Canada’s heritage minister, accused the company of being “irrational and irresponsible” for not engaging with the government, unlike Alphabet, Google’s parent group. He added that pulling the ad would cost the company millions.
US lawmakers are watching. California introduced a similar bill in March and some federal lawmakers indicated their support for Canada’s approach. “It is unacceptable for companies like Google and Facebook to abuse their power to prevent access to news. Leaders are right to stand firm against these tactics,” Senator Elizabeth Warren, Democrat of Massachusetts, tweeted. Senator Amy Klobuchar, Democrat of Minnesota, who has co-sponsored a similar bill to the one in Canada, told The Globe and Mail newspaper that legislators must resist company pressure: “Of course monopolies will fight us every step of the way.”
Meta did not respond to a request for comment. A Google spokesperson said the company hopes conversations with the government could help resolve concerns so it doesn’t end up blocking information.
THE SPEED OF READING
JetBlue said it would to withdraw from an alliance with American Airlines after a judge blocked the partnership amid opposition from the Justice Department. (CNBC)
The Raine Group, the commercial bank focused on sports, media and technology deals, raised $760 million for its latest mutual fund. (Raining)
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