Can You Monetize Everything You Do?

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00:04 Aaron Powell: But what all of these things, all these technologies do is they enable us to better monetize value.

00:11 Will Duffield: And you see a clash between a sort of organic means of advertising that developed on these platforms, and what the normal consumer safety or awareness rules look like.

00:28 Paul Matzko: Welcome to Building Tomorrow. Today we’re talking about commodifying daily life. And with me today, we have…

00:37 Aaron Powell: Aaron Powell.

00:38 Paul Matzko: And…

00:39 Will Duffield: Will Duffield.

00:40 Paul Matzko: Welcome guys. So we’ve got an interesting couple of topics. When I say commodifying daily life, that’s a big all-​encompassing umbrella. But underneath of that we have smart TVs spying on you. We have special new browsers that give you control of ad revenue, and we have the way in which being a Twitch streamer can be a very stressful and unpleasant way of making a living, but a way of making a living. So let’s tackle those one at a time. So first, there was an article in the New York Times by Sapna Maheshwari, how smart TVs in millions of US homes track more than what’s on TV tonight. In short, it’s an article about how when you set up your smart TV… And it really doesn’t matter who you buy it from. It could be Samsung, Vizio, Philips, you name it, there’ll be a screen often where it says, would you like to opt into a service that will help you better match your interest with potential shows? Like we’ll show you smart recommendations. 90 plus percent of people opt-​in to this program not realizing that what they’re actually opting into is a record-​keeping surveillance of everything that they watch. The point of the article is not only that you’re allowing a third-​party marketer to watch you as you watch television.

02:03 Paul Matzko: It’s also that now this is bleeding over into the Internet of things, that when you set up, say your smartphone as a controller for your television, or you use a Amazon Fire Stick or Apple TV or any of these devices that are now connected to your smart TV, they’re actually sharing data with the TV that is then being shared with these third-​party marketers, who pay TV manufacturers for the privilege. The TV company is getting a cut of this money. But you yourself aren’t seeing this revenue. So what you think guys, is this how… First of all, where are the problems in this trend and then what’s the potential though, for consumers pushing past problems?

02:47 Will Duffield: I think the issue here is a lack of transparency. Even the screen that was shown to users as they were trying to set up their TV and watch something that explained this process did so fairly opaquely and didn’t seem to highlight what would be for most users, the most concerning aspect of this program. This firm, Samba, not only tracks what you watch on TV, but what you do on other devices connected to the same internet connection as your television. The article quotes Jeffrey Chester, Executive Director of Center for Digital Democracy, saying that the TVs device map, which matches content to mobile gadgets according to a document on its website, can help the company track users in, “Their office, in line at the food truck, and on the road as they travel.” And while that was spelled out pretty explicitly in this internal document at Samba, users weren’t getting such a 4th right explanation of what was happening to them. And when someone feels as though the wool is being pulled over their eyes, they’ll usually react poorly to it.

04:05 Aaron Powell: Okay, so I get that. But I guess I’m skeptical that even if you told people it would make much of a difference as far as them feeling like the wool was pulled over their eyes. So as we record this today, and it’s what, Friday, July 6th, one of the many things in the news that doesn’t have anything to do with Trump is that people have suddenly figured out that when you give third parties, permission to read your email in Gmail, third parties are reading your email in Gmail. [chuckle] And that people are panicking, this is kind of the next phase of the Cambridge Analytica Facebook thing, but this is an instance where when you go… So I use a third-​party email client that connects to my Gmail account, and when I install it, and when I log in to Gmail with it, so I can add the account, a dialog pops up from Google and it’s very clear, it’s crisp white with nice icons, not a lot of text, and it says, this app would like permission to, and the first one is manage and read your email, and then it has a couple more like delete email, see your contacts.

05:25 Aaron Powell: There’s no hidden language behind lots of legalese. There’s probably 40 words total on this dialogue and I have to say, yes, I want to grant it these permissions. So everyone who has granted these app permissions has seen this incredibly clear dialogue that says, “Do you want to let this third-​party app read your email?” And yet, everyone is panicking now because third-​party apps can read their email, so I don’t see, I guess what difference it would make that I don’t see the problem here being that it’s opaque, that you know the thing you’re opting into because people seem bafflingly unable to understand what they’re opting into even when it’s only a handful of words.

06:07 Paul Matzko: I don’t know if it’s so much the length as that the… Like it’s not, like what’s being done by say, Samba TV, as described in the article is not… It’s not about the length of what you’re… I mean, in fact, they show a picture of the opt-​in screen in the article. You don’t even see the terms and conditions. There’s like a option you can check where you can voluntarily pop them open and read like 40 something crazy number of pages of text. What they basically do is they say, is that they obfuscate what they’re going to use the informa… What information they’re gathering from you and what they’re using it for. So rather than saying we’re going to use your information to target ads at you, they say we want to enhance your experience with the television. The exact line is something like, get recommendations based on the content you love and give you more control over your television experience, which like, no… I mean even someone who knows what’s… Who is vaguely technologically literate, what does that mean? It doesn’t mean… I mean I don’t read that and say, “This means they’re gonna target advertisings at me. They’re gonna watch me, so they can… ”

07:18 Will Duffield: And track your phone. It doesn’t seem to jump to… Off of the television platform on to other things. Now, yes, people might react as they do with regard to Gmail and the third parties you’ve consented to provide access to there, but in this case it wasn’t so clear cut a provision of authority. And I think that will always rankle people, whether if you were to provide a more explicit explanation of what you were doing they’d be happier, I don’t know, but this kind of obfuscation can’t help.

07:55 Paul Matzko: Well, and your point though… I think the point where I’d agree with you, Aaron is that, terms and conditions are just something we’re all kind of trained like Pavlovian dogs, just to click on… We see it and we click. We see it, we click and we don’t give it a second thought. We just kind of assume that they’re operating in our best interest because why wouldn’t they. And then we find out that actually something in there gives them the ability to do something we don’t like. Then there’s lots of public shock and surprise. The argument would be, is this really any more hidden, they’re obfuscated than what we’re all doing constantly whenever we use a new app or whenever we use a new program.

08:36 Will Duffield: Even when it comes to using a new app, often the design of the service and what it’s going to provide to others isn’t very upfront. I was very surprised to find the other night that as I’d signed up to NextDoor, this neighborhood social media app, it’s been great, enjoy using it. But only by looking at someone else’s profile who hadn’t explicitly opted out of providing their exact address did I learn that I and the others, most of the others using it around me, had auto opted in, or weren’t presented with an explicit opt-​in, provide their specific street address which maybe isn’t something all of those users intend or desire to provide to anyone else on the platform.

09:29 Aaron Powell: One wonder I have about the more explicit terms, the more… So we can lay out, we could lay out everything that this thing’s gonna do with knowing what your devices are doing, and what information it’s gathering, does that have the effect of potentially scaring people away from a service that they wouldn’t mind in retrospect? So, did they… At some later point you’re like, “Oh the way that your TV has been giving you personalized recommendations is because it’s aware that when you’re using Apple TV, you’re watching these shows and that you have asked it to look up the following sorts of things and it’s gathering that data.” And people might be like, “In the context of how I’ve used it and seen how that plays out, that’s pretty cool.” But if you front-​load it and say, here’s all the things that we’re gonna do in this explicit way that it might scare them off, it kind of primes them to think like, “Oh God, this is stuff I really have to pay attention to.” And so they’re not going to necessarily get the benefits.

10:35 Aaron Powell: And this isn’t something like, I’m not… This isn’t necessarily my position and I’m not making this as an argument, I’m just tossing this up as like, would we be potentially giving up long-​term benefits because that the norms would naturally adjust, like people… Or have seen it and used, they’re like, “Oh, that’s fine.” But if you make the warning explicit up front we won’t have… Will lessen in the opportunity for the norms adjustment from which the benefits eventually flow.

11:00 Paul Matzko: It’d be like, imagine if someone at the FDA, and they went back to college, and they were assigned Upton Sinclair’s The Jungle. They read all about how… About meat cutting and the production of meat products and how filthy they are. And so they said, “You know what, consumers need to know. So we’re gonna pass a rule that before you eat at a hotdog stand, the hotdog stand must play a little video where they show how they make these hotdogs.” And like no one who watches how a hotdog or a sausage link is made feels like eating one of them afterwards. But we’re fine to eating it. Sometimes, you don’t wanna know how sausage gets made you just wanna eat the sausage. So, that’s a metaphor that comes to mind, that people want benefits, certain benefits provided by these services. They want smart recommendations, arguably they might even want targeted ads like all things being equal, I want an ad that’s actually targeted to fit my interests more than a dumb ad meant to fit the interests of some generic mass of American consumers. But they don’t know how that thing’s produced. You pull back the curtain a little bit, it freaks them out some, but that might be a function of their kind of lack of understanding or technological literacy, rather than a true gauge… Right so, there’s something to be said for that argument. I can see it, though, I think a lot of the concerns… Sorry, were you gonna say something?

12:29 Will Duffield: Yeah, just to take your sausage analogy and run with it, particularly as liberals or libertarians, we should be aware and concerned by Otto von Bismarck’s formulation of that, likening the law-​making process to the sausage-​making process there. As folks who aren’t particularly pleased with either the process or the outcome, I think we’d be happier if people knew a bit more about how laws were made and refrained from endorsing them or accepting their application on that ground.

13:06 Paul Matzko: I suppose the question is how we arrive. We should value transparency in process. The question is, how we arrive at that, like what’s… And whether we allow… There’s a potential for a panic to overwhelm the kind of rational faculties here. In which case, something that actually does provide benefits and could be improved with more competition or with more transparency, gets kind of cut off. The development gets stultified because of a broad social panic over what’s being done. The other aspect of the article that I think would arouse concern, it did a little bit for me at least reading it, was the device mapping. The idea that, okay, I’ve opted into my television reporting back information about what I watch. I’m cool with that, but when it starts reporting what I’m doing at a food cart or what I’m… Things I’m doing with other devices, wait a second, did I opt into that? And also, is a peek, possibly, into the future of the kind of surveillance that’s possible in the Internet of things enabled environment.

14:17 Paul Matzko: So someday… This is the buzzword, Internet of things. At some point, everyone expects that your major appliances, starting with your major appliances and your phone and electronics, but at some point even your light bulbs, your circuits, your… Just really anything that’s electrically connected in your house will be communicating with each other and then also communicating with third parties. So that, for example, there’s a day in which advertisers would know what kind of foods you bought and put in your smart fridge, ’cause your smart fridge tells you when you run out of stuff. But it will also be able to tell them what you actually ate versus what you aspirationally bought to eat. So you bought that kale, but then you didn’t actually eat it. And they can tell how quickly you ate that… Or you drank that six pack of whatever… Of Bud Light. I don’t know who bought a six pack of Bud Light, for example. But they did, and they drank it really quickly.

15:12 Will Duffield: Me. What’s wrong with that?

15:13 Paul Matzko: So they know what you…

15:14 Aaron Powell: I thought you always bought it in like 24 packs or larger.

15:16 Will Duffield: Well, yeah, when I can.

15:17 Paul Matzko: Buy the case, man. Buy the case. So they would be able to know… Or then when you use your… You ask Alexa for what the weather forecast is, and then after doing so, they get that forecast, you then say, “Okay, where’s the nearest park?” Dog park or something. They know from that, when the weather’s like this, you do these kinds of activities. There’s the potential for an expansion in vacuuming up consumer information as a matter of course. And that’s gonna be, I think, scary to a lot of current consumers in the digital age. Are we right to be scared about that? And what aspects of that do you find scary or potentially overblown as something to be worried about?

16:03 Will Duffield: I guess I find it more needless than scary. I can’t ever imagine wanting to purchase a smart fridge. None of that functionality is remotely appealing to me. I’m, I guess, bracing myself more for this sort of culture war concerns we will see surrounding how these systems are designed. The inevitable is your fridge telling you to eat less, the patriarchy sort of takes. As for the harvesting of user data, yes, it’s going to happen. Now, how that will be abused or misused, I’m not sure. I’m again really still just struggling to figure out why anyone would find it valuable.

16:58 Aaron Powell: Oh, I can think of lots of ways that having your fridge track what you’re putting into it, when you’re taking it out, how much of it you’re consuming would be valuable. If you’re, especially, a family, there’s lots of people eating… Having something that syncs up like, “Oh, I’m going to the grocery store, my fridge can tell me these are the things you’re out of,” would be incredibly useful, because not everyone is all that diligent about saying, “I used the last of the milk, we need to get more.” Or knowing… All of us do buy, as Paul said, things aspirationally. But if I know that the last six dozen times I bought that kale it never got eaten and have something that can remind me of that, then maybe I’ll be like, “Okay, I’m gonna admit defeat”.

17:45 Will Duffield: Don’t you have rotting kale in your fridge?

[chuckle]

17:48 Paul Matzko: You’d be amazed at the human ability to ignore the fact that you let it rot the last six times and… But no, “But this time I’m gonna eat the damn kale.” [laughter]

17:56 Will Duffield: Okay, I can see some of the family stuff.

18:01 Aaron Powell: I’m always just skeptical of, here is a new technology and I can’t imagine what use we would ever have for it. I mean, history is full of technologies that we can’t live without that people said the same things about.

18:14 Paul Matzko: So, there should… I can imagine uses for consumers, you can imagine the usefulness for advertisers too, right? Where they can now, they can say, “Okay, not only do we know this when one purchases kale, but they don’t actually eat the kale. So maybe at certain times they’re probably getting… But they’ll buy Dove chocolate, so we’ll target them for a… There’s all kinds of potential micro-​targeting that can be done. At the same time, I think the first objection that comes to mind as an objection to being overly worried or paranoid about that prospect. We already do this with the internet, right, like everything you do on the internet is being… Unless you use Tor, and you use a VPN, and you use special browsers and the like. Everything you do in the internet is being tracked and watched for the sake of advertising. That is the fundamental commercial bedrock on which the internet’s built. And there are issues with that information being misused, the Cambridge Analytica and Facebook and what not. But at the end of the day, the benefits outweigh the cost and there’s no reason to suspect the same thing wouldn’t be true with, smart fridges and…

19:24 Paul Matzko: So, while this smart TV device mapping, we could quibble with the particular thing that they’re doing, like maybe they need to be a lot, Well, not maybe they should be more transparent, they should let people know what they’re actually opting into, they should… This whole taking information from other manufacturers devices that aren’t part of that agreement, that’s all really sketchy. But the basic concept, the concept that all of your devices will communicate and that that produces value both for you and for advertisers? Bring it on, I mean…

19:57 Will Duffield: I get it. It seems to go beyond advertising, as well. I mean think of the insurance market benefits. You’ll certainly see more efficient insurance markets. You also probably see a secondary market in cartons you can stick your junk food in to trick your smart fridge, into thinking reading something healthy. So, your insurance rate won’t go up, and that seems like a lot of work to deal with.

20:22 Aaron Powell: This content communication fits in, I mean, one of the benefits of free markets and prices as information. The core argument for the value of having the market set prices, is that they act as a means of moving information between actors in the market in an incredibly and efficient way that can’t be done in a centralized fashion. And so the more information you have, the better all these efficiencies. So you gave the example of the insurance, but there’s all kinds of efficiencies, there’s all kinds of new products that can grow out of this, there’s all kinds of wealth creating mechanisms that can spring forth the more information you have, the problem is if you get overloaded with information, then you can’t really act on it. So one of things that prices do is in this really elegant way, they can take extraordinary amounts of information and get just the right information to just the right person at just the time in a way that they can act on it in a fruitful manner. So there’s the concern that we just gather too much, but as the technology gets better and better at managing the information too and passing it around, I think we can see tremendous benefits.

21:35 Will Duffield: I agree with that completely, and my concern is much more selfish. There are certain inefficiencies in the market that exists now as a result of incomplete information, that benefit me personally, and I’d like to maintain them. I don’t want that information out there, ’cause there’s a cost to me for that. Now, right now, I might be a free rider in a sense, but I’d like to maintain that status as long as possible.

21:57 Paul Matzko: Right, and like maybe you don’t want the person who is choosing… That is recommending television programs for you and your family about some of the things that you asked the Alexa to buy for you. Or about, you know… I mean there’s potential information that things cost more because you want them to be inefficiently, you know, like provided, things you’re embarrassed about things that… So, those kind of things are easier to expose in a world in which everything’s talking, communicated, but is that…

22:30 Will Duffield: Aaron is rightly frustrated that he may be subsidizing my insurance at the moment, or other inefficiencies that exist.

22:38 Aaron Powell: Yeah. We all know what a the accident prone lifestyle you live, Will. So…

22:43 Paul Matzko: Now it’s out there, everyone knows it now.

[laughter]

22:48 Paul Matzko: One of the other potential benefits that I thought of is that, okay, so there’s a revenue stream, and that revenue stream is getting bigger, because now you can target ever more specifically. That’s worth money to advertisers right now that money flows through these third party marketing organizations like Samba. The question is, as that pool increases, can consumers take some of that money for themselves? Cut out the middle man redirect that flow to to their own pockets. So like right now, a lot of that’s indirect. Indirectly Samba pays some indeterminate sum of money to a television manufacturer, that television manufacture… And margins are very, very slim on TV sets, because of that they can drop the prices on their TV by some fraction. Our TVs are cheaper because of organizations like Samba. That’s indirect, though. And the question is, if you can cut out the middle man, you’re cutting out some slice of the profit they’re taking, more of that money can go directly to the consumer.

23:54 Paul Matzko: So you can imagine a world in which you get the opt-​in and it says you can opt out, and have all your privacy and desperately try to find what the Netflix program you wanna find next is through all of the direct that’s in the back catalog on Netflix. Or if you opt into our program, we will pay for Hulu, for you, for free, or HBO Now, or we’ll provide free subsidized benefits because of the value you’re letting us take from you. So there’s a way in which this excess revenue being generated doesn’t have to stay in the pockets of organizations like Samba or other marketers.

24:34 Aaron Powell: Yeah, I think there’s a lot of really interesting tech in this regard. The next thing that we had in our list is Brave Browser, but this is… Brave is just one example of many sorts of things like this, but this idea that, right now, the advertising model and it exists this way, because of technological limitations and responses to technological limitations. Right now, the advertising model is, advertisers want to reach consumers, and so advertisers give money to publishers, whether that was print magazines or classified ads in newspapers or online ads now or television ads, they give money to the content publishers and the content publishers have an audience, and so then they put the ads in front of the audience.

25:28 Aaron Powell: But what we can do technologically now, and increasingly, is we can kind of cut out the need potentially for money to go to publishers or all of the money to go to publishers. So you can have a system where the advertiser is basically paying the consumer to see the ads, and the publisher still can take their cut, too, because they are creating the content that is drawing the person. We can imagine of some sort of dystopian future where you can opt-​in to spend four hours in front of the TV, just watching advertisements and take home some money from that, but that’s probably not what most of us wanna do.

26:11 Will Duffield: It seems like an architecting question more than anything else because the moment the portals through which we view and consume this sort of content, you’re using, say, Google Chrome to watch or read the New York Times, it doesn’t allow you, it doesn’t give you the capacity to retain control over your data. But this web browser looks like it changes things.

26:39 Paul Matzko: Maybe Aaron… Do you mind explaining Brave, I know there’s other options, but why don’t you explain Brave for our listeners.

26:45 Aaron Powell: So Brave is a project to build a browser, but the real thing that’s building the browser is a way to get to the core of it. And the core of it is a new way to address, call it the attention economy, online, which is what advertising all is. It’s an attention economy, people are paying for the attention of viewers and listeners and so on, and readers. And so, what Brave does is it bakes into, in this case, the browser. So Brave is a browser, you can download it now, you can install it on your desktop, you can install it on your phone or your tablet, it works just like every other browser. It’s got some extra neat privacy features built in, so it’s got slick ad and tracking blocking. The newest desktop version is now supporting… Any time you pop open like a private viewing window, typically, your browser if you open a private viewing window all that really means is that the browser doesn’t retain the cookies that you generated during that session, but there’s all sort of other ways to track you. Brave now bakes Tor into the private viewing window. You’re automatically using this much more secure and private network, but the core of it is this basic attention token, which is it’s a cryptocurrency, it sits on the Ethereum blockchain, it’s a token. But this token is supposed to be the core of the new attention economy for browsing.

28:13 Aaron Powell: And so, initially, this plays two roles. The first is, I can have a wallet of basic attention tokens and I can spend real money, to buy more tokens to put into my wallet and then what I can do is, is effectively share a portion of that wallet each month with the publishers that I visit. So the Washington Post right now, is signed up with them, so if I have $10 I’m giving out each month I’ve chosen to give out to publishers in my wallet, and I spend 10 percent of my browsing time that month on The Washington Post, then the Washington Post will automatically get one dollar worth of my tokens transferred to their account. And so, the more places I browse, the more it’s spread out and so on, but that’s the…

29:00 Aaron Powell: I have to not just opt into that in terms of like, “I wanna give permission to give this money, but I have to opt into the sense that I have to put my own money in. So it’s more of a tipping system than an advertising system. The other part of it though is that the Brave Browser, in a local way, so within my system, not shared on third party servers and all that, can build a profile of me. The kind of data that any other… That like Facebook would gather about you or whatever else, ’cause the browser knows obviously what I’m browsing, what I’m clicking on. So you build this profile of me, and then in a secure way, it can, Brave the company can sell advertisements. So advertisers come to Brave they sell advertisements that appear in the browser or can appear on publishers websites and those advertisements are targeted to me, based on data that’s stored locally in my browser. And then…

29:54 Paul Matzko: So brave doesn’t know what’s on your system.

29:58 Aaron Powell: Is my understanding, yes.

30:00 Paul Matzko: Right…

30:00 Aaron Powell: And then the advertisers are basically buying the ads using these tokens, and then when I see one of these ads a portion of the money, so I think 70%, something like that, goes to the publisher that the ad appeared on, and Brave pockets it’s 30% fee for this service. But you could also very easily turn that into a portion goes to the publisher, who showed me this ad that was targeting me in a privacy-​respecting way. And then a portion also goes to me, it goes into my wallet, because I’m the one who saw the ad and this seems like, I mean, we know that obviously our data is valuable, right? Like we are generating… Facebook is in business because we, the users are generating a tremendous amount of value. And this is simply a way that the users can get paid for generating the value.

31:06 Paul Matzko: Yeah.

31:07 Aaron Powell: Which is… I mean that’s… It’s always been that way in the sense the way that you use a social media network is by creating content on it in the form of posts, in the form of comments, in the form of likes, you’re creating content. Content creators have been paid in the past, obviously, but there’s like a floor like you need to be a certain level of famous or a certain level of having a big audience in order to get paid, otherwise your content creation is free. Tech like this allows you to kind of get rid of that floor so that every one down to no matter how obscure you are, you’re not gonna make a lot, but you’re gonna generate… You can generate income based on how valuable whatever content you happen to create is to the publishers and ultimately, the advertisers.

31:50 Will Duffield: Do you think it might have, specifically thinking about social media and current complaints about anti-​sociality on it, have a pacifying effect on some of that if people were seeking a monetary reward rather than a sort of social impact or recognition reward? If you were simply paid for having read someone’s post rather than expecting payment in the form of the followers you might get if you left a particularly amusing or snarky comment underneath?

32:31 Aaron Powell: I can see that being a tricky problem because you as a user slash content creator, you’re playing both roles, when you’re using these networks. The advertisers ultimately… The advertisers are only gonna pay an amount that they think they’re gonna get a greater return. Like that’s their goal is to get people to buy their products, and so they’re not gonna pay out more than they’re earning from the sales of their product, so they want… They will increasingly wanna pay for effective advertising with effective targeting and so on. And so the thing is you get paid by the value you create, but the value you create is not… It’s not quite clear how to measure that. And so I could see it on the one hand, leading to a pacifying effect that if the economy is set up to encourage good behavior, and good behavior is rewarded then you’ll get more good behavior, but if it’s…

33:35 Aaron Powell: Value creation can be an unpredictable thing. So it might be that the people who draw the most attention, that’s who advertisers want to target, right? Influencers. You wanna get your stuff, so the metrics behind the scenes are saying like advertisers wanna target their ads to people who have larger audiences or get more re-​tweets because those people then create kind of downstream value for the advertisers. In which case you might get the opposite effect that it might ratchet up, because not only right now that attention, those lots and lots of re-​tweets that you get for your snarky comments the value to you is gratification, is feel goodness but if suddenly on top of that there’s a monetary gain then you might see even more of it, but then you have the effect of just that then devalue the network as a whole because it drives away other uses. It’s like… So I can see this being…

34:33 Will Duffield: A worse tragedy of the comments.

34:34 Aaron Powell: I can see it ended being very, very screwy and seeing lots of extremes. I expect that as the technology gets better, and as people get used to the system, it evens out, but it strikes me as unpredictable.

34:46 Paul Matzko: It certainly have a heightening effect rather than something new or different. Current trends in this space would be exaggerated. And in this space it’s already has some exaggerations, and actually that’s our last topic here from the article by Adrian Chen, Ice Poseidon’s Lucrative, Stressful life as a Live Streamer. So we’re talking about content creators who need large audiences but that in theory those audiences don’t have to be as large in this brave new world. What we currently have, streamers and this Ice Poseidon’s a guy who’s a Twitch streamer. He was an in-​real-​life streamer, so he is not streaming games. Most Twitch streamers are gamers.

35:25 Will Duffield: I’ve just gotta read the opening passage here.

35:28 Aaron Powell: Yeah. Read the opening for us, Will. Yeah.

35:29 Will Duffield: Because it’s wonderfully written. A strange creature stalks Los Angeles, hunting for content. He is pale and tall, as skinny as a folded-​up tripod. His right hand holds a camera on a stick which he waves like an explorer illuminating a cave painting. His left hand clutches a smartphone close to his face. Entering a restaurant, he wraps his left wrist around the door handle, so that he can pull the door open while still looking at the phone. Chaos follows him. So this fellow Ice Poseidon, streams most of his waking life, whether he’s inside playing video games or wandering the greater Los Angeles area, seeking out human interactions, which will delight and titillate his followers, and draw greater attention to his project, getting him greater advertising revenue. This has obviously had quite a profound impact on how he lives his life as well. And the article illustrates some very interesting dynamics, and incentives created by this mode of both content creation and essentially his work.

36:54 Paul Matzko: Well there’s this… As I was reading Ice Poseidon, about Ice Poseidon, it was first I’d heard of him. I watch a little Twitch myself. I’m familiar with the community a little bit. So there’s a toxicity throughout the article. Both he and his followers, engage in, shall we say, anti-​social behavior. So his followers were constantly… He gets… People are swatting him. They’re calling the SWAT team and saying, that he’s holding someone hostage. Someone swatted him every day for a month. I mean, these are his own followers.

37:24 Will Duffield: And then part of the appeal for them I think is not just to view his life, but to viscerally take part in it. And…

37:31 Paul Matzko: They made him break up with his girlfriend. There’s a lot of… And so you read it, and you say, “Well if the future is more of this, well we’re in trouble,” because… [chuckle] But I do wonder to some extent if what we have is kind of a false picture of what this looks like going forward, that it for a variety of contingent reasons this lifestyle, this technology, is in the hands of… Or has been first wielded by kind of an unpleasant community. The reason why he’s toxic is because he’s a toxic guy, attracting toxic people. It’s like all this technology could be used by more… This doesn’t have to be the community…

38:14 Will Duffield: I also wouldn’t be so hard on him, and his community, the people who follow him seem to derive a lot of value from it. And often seem like pretty lonely people who find a friend in a community in this.

38:26 Aaron Powell: So one thing that I think distinguishes this from the prior two things we talked about, so the smart TVs, the Internet of things is gathering data on you, and then the… Putting the users into the ecosystem for advertising, making them participants, or earners as well, is that, toxicity aside, all that aside, what this guy is doing, doesn’t scale. So all of us could be earning money in advertising dollars, from our use of social media. And all of us could be opting in, and getting better and better recommendations about television shows to watch, and in fact all those things potentially get even better the more of us who opt in, but…

39:06 Paul Matzko: Not all of us can be Ice Poseidon.

39:08 Aaron Powell: Not all of us can be live streamers, even if we wanted to. Most of us wouldn’t want to. But most of us are not interesting in the way that, I guess, this guy is somehow interesting to his audience. It’s more like all of us tell jokes all the time, but that doesn’t mean that we all could become stand-​up comics, and that’s someone like this needs… You need a critical mass of followers in order to earn even enough to make doing this worth while in the first place, ’cause as the article mentions, he’s using a lot of very expensive equipment, there’s all sort of upkeep costs, and so on. So I think that this is A, something that was always gonna remain relatively obscure because it’s just not financially sustainable at scale. And B, I think that as it attracts, as this sort of stuff grows, or at least the potential money in this sort of stuff grows and catches the attention of what I’ll call the professionals who tend to be… I mean, amateurs make good content, but professionals are often better at… There’s a reason that we go, and watch blockbuster movies made for a lot of money by professionals as opposed to public access television. And so, I suspect that this kind of live streaming will end up looking more like slickly produced stuff over time. As the professionals get more and more involved in it.

40:32 Will Duffield: Don’t we already have that though? I mean, on MTV, with reality TV, Jersey Shore. Part of the appeal of this would seem to be its amateur-​ness, the fact that it does feel real, in a way that one expects that most of these slickly produced stuff, is also fudged or faked in some sense, the drama less true.

40:57 Paul Matzko: It’s professionalized amateurism. You mentioned, when we were talking about the idea of the show, you mentioned JenniCam, an early streamer who streamed her life in the ’97-’98.

41:12 Aaron Powell: ’96 was when it launched.

41:12 Paul Matzko: ’96 when it launched, okay. So very early, it was like a screen shot every 14 seconds.

41:17 Aaron Powell: Yeah, it was… She was a student. She was in college, I think at the time 19 or something like that, and she just set up cameras and streamed her entire life and I remember I would have been, what seventeen? At the time. I remember hearing about it, I remember trying to log into it, probably because there were rumors and I guess they turned out to be true, but rumors that she was sometimes naked on it, but it didn’t… I remember it being… It was a… The tech was not quite there to make something like this work well.

41:52 Paul Matzko: Truly titillating, yes. [chuckle]

41:55 Aaron Powell: But yeah, I think, I mean to my knowledge that was the first of these live streamers.

42:00 Paul Matzko: Yeah. And that evolves then, I mean, you can even see it. I went and watched like a greatest highlight reel of JenniCam. And you can see the process… Her becoming… It becomes less of an amateurism and something a lot closer to your current vloggers your… But that over time that process has become more routinized. It’s become more professional. And now you actually have like… There are outfits. I mean, I’m thinking here of the Logan, Jake and Logan Paul. They like select people and then, “Okay, we’re gonna turn you… ” It’s becoming essentially like record labels but for YouTube. And so the process of discovery and of turn… And the professionalism… The amount of capital that goes into actually producing the show etcetera. It’s all becoming a lot less like JenniCam and a lot more like Hollywood or like the music industry.

42:56 Will Duffield: Yeah, you see people even mocking the formalization of share, like, and subscribe. That becoming an almost industry-​wide sign off as it were.

43:08 Paul Matzko: And the same thing we could expect to happen to Twitch and the like.

43:12 Will Duffield: However, on the advertising side of things people seem to like the informal. It gives them a sense of participating in something being not just a consumer but a member of a community. New York Select All has an interesting piece on Instagram, empty photos. So the consumers of often cosmetic or makeup products will post images tagging the brand they purchased the product from of the empty bottle. Now, sometimes these are major influencers. Sometimes these are just individuals who like the product. For the makeup brands, it’s very valuable made of advertising because that photo of the empty bottle, while I guess someone could have gone out and poured a bottle out, to most viewers demonstrates that someone has used up all of this product. They’ve liked it enough to use all of it. And in exchange for posting these things the firms will often send the Instagram user a replacement. So you’ve demonstrated to the world the value of this product to you here in a sort of ex-​ante compensation, not contracted in any sense. We will give you some more of it. People seem very comfortable with that, warm feelings all around.

44:48 Paul Matzko: Other than with the FTC but…

44:51 Will Duffield: Well, when there is a contractual relationship and it is undisclosed the FTC takes a very dim view of these things. And you see a clash between a sort of organic means of advertising that developed on these platforms and what the normal consumer safety or awareness rules look like.

45:14 Paul Matzko: Well, even here and although it’s less of a problem just because the expense involved is less there’s still a scale problem. Now it doesn’t… The scale problem isn’t as big as would be for Ice Poseidon who’s making a living off of this but those things still cost money. And right now them giving away free product to Instagram influencers and fashionistas it works because there’s only so many of them, right. And they are basically relying on them through word of mouth and through their social media network to spread it to people who aren’t on Instagram, people who aren’t engaged in this new advertising landscape. But once everyone’s part of that world the value of that goes down dramatically. Again, it doesn’t scale up as much as, you know. This is… We’re not gonna be in a world where everyone who wants free product on… In digital life it’s gonna get free products. Where just right now we have a large number of consumers who aren’t plugged into this community but as millennials and Gen-​X-​ers and Gen-​Z-​ers as we age they’re gonna have a scale issue.

46:20 Paul Matzko: The other thing I thought of as I was reading the Ice Poseidon article was that we’ve democratized celebrity life, right. So, his behavior is not all that different from say like the Kardashians. So the Kardashians made their way… They became famous for being famous using an older medium, right. They relied on essentially all the the glossy magazines that you get at the grocery checkout counter, Us Weekly and etcetera. And then they relied on reality television which evolved out of the kind… You know, JenniCam, the kind of thing we were talking about before to make themselves famous, influential and wealthy. Ice Poseidon is like the evolution of that. So now someone who doesn’t even have the Kardashians relative level of minor, I mean, they’re like D… I mean prior to this they’re like C-​lister famous because their father was an Olympic champion, right like Caitlyn Jenner.

47:17 Will Duffield: And it is the tech shift, the advancement in technology that drives this. Anyone can behave outlandishly. However previously you needed to be able to both behave outlandishly and appear in Us Weekly or wherever else. YouTube has changed that because everyone from Jake Paul to Ice Poseidon can tap into or example those behaviors and receive celebrity in exchange for it.

47:47 Aaron Powell: And I think the optimistic take on everything that we’ve discussed today is that the perfect, I mean, the perfect utopian economic system, right? If we could imagine an economy in a world, it would be where everyone can make a living doing what they love doing. So that everyone feels really fulfilled in everything that they’re doing. And unfortunately for the vast majority of us, that’s not an option. We can’t… We have interest, we have hobbies, but those aren’t the things that we can make a living doing. So we’re still not anywhere near that utopian world, but what all of these things, all these technologies do is they enable us to better monetize value, and get money to people who are creating value for other people. And the tech is like breaking down barriers to that, making us better able to identify it.

48:49 Aaron Powell: And so what it’s done is you can now… If you simply are the kind of person who the things that you do are other people to enjoy, they create so… And it doesn’t even have to be creating a product anymore. It can just be like I’m someone who talks into a live cam for a while, or I have a strange life that people think is fun to watch. Suddenly, you’re enabled to keep doing that but get compensated for the value you created in a way that you never could before. And even if that isn’t spread to everyone like these… What we’re watching is more and more capability to somehow earn a living while specializing in directions that better align with your particular and sometimes weird and idiosyncratic bliss.

49:40 Paul Matzko: Well, it’s not like the behavior being described here is new, but what used to be restricted to a handful of say, aristocratic second sons who they could be the… That they didn’t have to go into the family business, or they could rely on new innovations, stuff like a stock market in a bond system which allowed family wealth to be heritable and passed on without going through land. Well, that thing that was restricted to a very small number of elite wealthy folks has been expanded bit by bit with each new technological form. So that now where… It’s a process of maximizing the number of people who get to do the things they enjoy for a living. And maybe not everyone, but more people. So if you enjoy playing video games, you can go on Twitch and stream and potentially make a living, like something like 14,000 Twitch streamers make a living off streaming themselves playing video games. Something that that number would have been a handful prior to this new technology in this new form. So there’s value in that. People become happier when they get to do more of the things they enjoy doing and get to do them for a living at the same time.

50:56 Paul Matzko: So that’s a win. I think we count that as a win as libertarians, a world that is both more prosperous because we extract more of the income for ourselves, world which we get to do more of the things that we enjoy doing. Hey, that sounds like a pretty good world to me. Well, thank you for listening to Building Tomorrow. And until next week, be well.

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51:16 Paul Matzko: Building Tomorrow is produced by Tess Terrible. If you enjoy our show, please rate, review and subscribe to us on iTunes, or wherever you get your podcasts. To learn about Building Tomorrow or to discover other great podcasts, visit us on the web at lib​er​tar​i​an​ism​.org.