Machine. Anyway, we have our first guest of the show, Doomberg, the anonymous poster and analyst with us in the waiting room. We'll bring in Doomberg to the TV theater film. Doomberg, how are you doing? Stunning. Hey guys. Doing great. Thank you so much for taking the time. I love an animated avatar. What can you tell the audience about who you are, why you chose anonymity, pseudonymity, any of that? Just as a way of an introduction. Sure. Brief intro first. Thanks for having me. Great to be here. Thank you. Yeah. We are a anonymous team of former industry executives that write about the energy markets. When we launched Doomberg five years ago this month, we had nothing. So we decided to build Doomberg on Twitter. Back then, the choice came down between another middle aged white guy in a tie or a green chicken. And you can't be remembered if you don't stand out. And so that decision actually accelerated our early growth. And then once a brand kind of, kind of blows up, we observed other. Other Twitter accounts de anonymizing and it kind of destroys the brand mystique. So it's nothing more than that, really. Just why is. Why is the chicken green? Well, another master stroke of marketing by our co founder and editor in chief. Love it. So our ideal clients have Bloomberg terminals and the colors on the Bloomberg keyboard are pretty iconic. I get it. And the most dominant color on that keyboard is a close proximity to the green that we currently wear. So yeah, a brand is the gut feeling you induce in people when they interact with your product. And if our ideal clients have a Bloomberg keyboard and they see the green chicken, you know, Doomberg Chicken little gets a terminal was our first. First tagline. And they don't know why they like it. It's some combination of the colors and the stunted eyes, we think. Yeah, it works. And when you got a winner, you know, just keep riding it. I love it. I love combining this high level. Right. Which is like serious content with. Sorry. Yeah. I want to talk about energy and AI, but I also want to talk about the workflow here because am I just watching a looping animated gif or mp4 file or. Can you actually puppeteer this like a vtuber? Or have you considered that this is very low tech? Okay. There's no new Coke yet in design. Okay. This is a GIF animated as our background zoom. Cool. And I'm speaking to you through a Roland VT4 slightly modified in real time. Sure. The latency is perfect. Yeah. To build on your last discussion. Yeah. We've had a couple guests come on and want to do voice changers. And no one's landed the plane like you have. So congratulations. And for dialing it. Technology is one of the five pillars of any business. And we decided to invest in our technology plan to execute the vision of the green chicken. Come on. I mean, it works. Every time I see a advertisement of all these serious finance people in suits and ties speaking at a conference and then a green chicken sitting there. Let me take this suit off. It makes me. Makes me laugh every time. That's so good. Talk about the other four pillars. Brand channel technology, demand creation, and operations. Okay. Makes sense. And we have a plan for each. One of the hallmarks of Doomberg's execution on substack is that we openly shared how we built Doomberg from the beginning. Sure. In a series of monthly pieces called the work of my life. Yeah. And it's been fun. Been a fun ride. We've got almost like 400,000 email subscribers now. That's amazing. Congratulations. Crazy, crazy Run. You said it's just a couple people, right? Our official statement is that you. You could count them on one hand with a few fingers left over. Sure. Okay. I like that. Leaving some ambiguity. But with a few is a few. Three. Yeah. Let's start with energy markets. Let's start with the strait of Hormuz. I've heard it's closed. Is that good? How bad are things? How serious is the situation in the. In the oil and gas markets? And then we can go through some of the knock on effects. But just in terms of like, like, you know, a lot of people have been tracking this, but where are we on the cutting edge right now in terms of where this all goes? Yeah, we're launching a piece tomorrow. Look, if you had given us this fact set in February and asked us to bet the over under of 150 on oil, we would be homeless because I would personally have mortgaged the house to greedily bet more on the over. Right. And would have lost. And I think one of the great mysteries of this whole affair is why is oil still so cheap? Yeah. And it's a really interesting. Mr. Go ahead. Yeah. And that feels like that's true for. Also just like the broader market, like the market is not processing in the same way. And maybe it's like the AI narrative which we can get into, but it feels like there's a very, very big historically significant thing happening and everyone's just sort of like closing their eyes. I don't know. How do you explain it? So we've done a deep think on it. Nobody knows. So one of the things about the oil markets is everybody lies. That's the first thing. And one of the sort of theories I was bouncing around with a guy who traded oil for 50 years over the weekend was there was an enormous excess of oil all of last year. China bought most of it. They lied about it and they're bleeding that into the market now to keep a lid on prices. Got it. That's one sort of conspiratorial look. And sorry, just to double tap there, you're saying they were lying about the levels of their oil reserves. So saying like, you know, basically under. Underselling. Yeah. So there's a lot of dirty oil. There's a lot of dirty oil on the market and they were buying it, you know, sanctioned oil, shadow fleet, Russian oil, Iranian oil. Sure. And. And so you. Yeah, because back at the beginning when it first closed, weren't people saying China has 40 days of oil or something like something. They have. They have 1.8 billion barrels is our best guess. They probably bought a million or to a million and a half barrels a day extra all of last year. Wow. And they're using that for geopolitical leverage now. They're cutting refined fuel deals with Australia. They're helping out their neighbors, looking like the mature stable have a Truth Social account to post on during the day. Ascending power with Trump going there this week. Look, I just want to say, in a world where oil is more expensive, oil doesn't matter like it used to. It used to be 55% of global energy, now it's 30 and change. And so the stock market, look, the AI revolution is powered by coal in China and natural gas in the US and natural gas in the US has been made cheaper by this war for reasons that we can explain. And coal is basically insulated from oil. And so I don't think it's all that crazy. Of course, with the benefit of hindsight, doesn't mean we would have predicted $100 oil 60 days into the Strait of Hormuz being closed, or 75 days, whatever it's been. But anybody saying that they would have not predicted a calamity is lying. Going back in time, are you learning any lessons or pulling any historical lessons from the previous wars in the Middle East? I grew up at a time when the war in Afghanistan, the war in Iraq were breaking out and the protest signs said no blood for oil, which is a completely reasonable thing to say. But I was surprised by the fact that if you look at the oil markets during that time, it feels like, even if you took the cynical approach that the US was going there to steal the oil, it didn't seem like that oil was successfully stolen and flooded the market. And I'm wondering what else you've learned from history and the various conflicts in the Middle east about oil prices that you can like, draw on today, if anything. Well, for that war, James Baker went around the world and told all of our allies to start pumping ahead of it to insulate the world from it. The real comparison everyone draws is the Iran embargo following the war in the Middle east in 1973. Okay, but the big difference between then and now, aside from the fact that oil just matters so much less, less is that there's an organization called the IEA that exists the and they have worked with the developing world to ensure that countries have a stockpile of oil for this exact situation. And they flooded the markets shortly after the strait was closed with 400 million barrels. There's still, when you do the math, oil prices should be higher and they just aren't. So there will be lots of time for an after action report when this war is done. But for AI and for the tech world, natural gas in the US being cheap and coal and China being cheap means those data centers are humming and all is good. What's driving nice natural gas prices right now? Great question. So the shale revolution in the US not only made the US a net oil exporter, it twinned the production of natural gas and oil. It used to be that natural gas was drilled for on purpose, oil was drilled for on purpose. And now in the shale patch in the same well, you get natural gas and oil. Got it. Especially in the Permian. Yeah, we're drowning in natural gas in the Permian. So when the strait is closed, oil spikes, drilling goes up, and you've got all this natural gas to get rid of. Got it. It's co production economics, which is actually not widely understood. And that's like pulling on our industry days whenever you have to compete against a co producer. It's terrible because if either of the markets are hot, they're producing too much and they're flooding the market with the unwanted byproduct, which happens to be what you make. And so when the war broke out, we correctly predicted that natural gas in the US despite a global energy shortage, prices would go down. And in fact, as we're talking today, natural gas is trading in the US for like 3 bucks a million BTU, which is about $18 a barrel oil. And in the Permian Basin, it's negative spot prices. They're giving it away. They're drilling for the oil. The natural gas is a nuisance. And so it's possible there's a superintelligence that's already in control that wants to feed on natural gas. And so they're playing. Yeah, this 40 chest. This is the ultimate, you know, clod agent gone over. I am, yeah, yeah. How is China? Is China potentially the biggest loser here? Because I imagine that coal and oil cannot be co produced in the same way. And so you don't have that dynamic playing out. Are they being squeezed? Like who, who is suffering the worst from the closure of the Strait of Hormuz? I suppose Europe and Australia. China is going to come out the big winner in this. Okay, why? A variety of reasons. So first of all, China has been building out something we've chronicled to the tune of hundreds of billions of dollars. The ability to convert coal into oil products. Oh, interesting. The only two regimes to have done this historically are the Nazis and apartheid South Africa. It's quite the exclusive club. The Chinese have decided to join. You do that out of necessity when you're worried about losing access to oil. It's very expensive, very environmentally taxing. It's not something you would do spontaneously to create shareholder value. You do it for geopolitical insulation. But also China's sway in the Middle east is going to grow if Iran continues to resist the US Israeli strikes and controls the Strait of Hormuz because Iran is being backstopped by Russia and China. And so in a world where the US has lost some geopolitical leverage in a zero sum game, China benefits and we'll see what happens this week. I think this is going to be a historic summit. Yeah, that's what I was going to ask you next. What are you expecting? Before we dive into that, I did want to one, one more question around oil. How are you forecasting whether we get high prices or massive shortages with, you know, oil, you know, everything from gasoline to other oil based products? Because I think they're, I think America, like a lot of people right now are kind of projecting, hey, we're just going to pay more at the pump. But then there is some scenario depending on how things play out, where you actually have, you know, you can't just go to, you know, we were talking yesterday and you know, maybe there's a scenario where depending on the last digit of your license plate, if it's an odd or an even number, you can only go on certain days and you get actual rationing that's not going to happen in the US it depends where you are. So the US is a net oil exporter. It's a bit complicated. We're detailing it all tomorrow. You. Trump is playing a careful game where he is allowing the export of gasoline, diesel and jet fuel to try to help the rest of the world. And the US is still well supplied, but is paying more. So we see $5 gas, six, $7 diesel. Trump could reverse that at any time just by limiting the exports of refined products. He's choosing not to yet. But if you're in Australia, you're already in a situation where you have to have urgent intervention by the government, who have done a great job by the way. And Europe, when you don't make your own hydrocarbons and you're beholden to the rest of the world, well, if everybody turtles up and says we're not going to export until our domestic demands are met, then you will see real shortages and no amount of price will clear. North America is fine. If you draw a circle around Canada and the U.S. the two countries are self sufficient in oil, diesel, gasoline, jet fuel, fertilizers, wheat, corn, sulfur, helium, all the things that people are worried about globally. We have not yet instituted export controls. But before the stocks would run dry, especially with the midterms coming up, you would assume that Trump and Carney would collaborate on such a, such an action. Have you been tracking the Diet Coke shortage? I have not been tracking the Diet coke shortage. Apparently 8% of aluminum goes through the straight of her moods. The cams are in short supply now. Yeah, and this is top of mind for us because John could run to the studio if he didn't have gas, but you know, the show wouldn't be possible without him going through three or four of these. Well, I got one word for you too. Plastics. Plastics not going to be popular with something. Oh yeah, you technically can get a Diet Coke. You can get a DC. You could just buy a 2 liter bottle or maybe fountain. Maybe fountain is the future. Fertilizer was my last, last question around. Yeah, how, you know, how are you? I don't know if you're covering, you know, future, you know, food prices, commodity pricing, et cetera, but we sure are again North America, both in, well in nitrogen and in phosphorus and potassium. The big three, Canada and the US are self sufficient. Canada has the world's biggest, most fantastic potassium deposit, potash deposit up in Saskatchewan. We wrote about this a couple of months ago before the war. The U.S. you know, ammonia is basically just a natural Gas play. And the US is drowning in natural gas. Sure. Through the Haber process. You just take natural gas, long story, but you make ammonia that way. There will be shortages of fertilizer around the world. There will be food shortages and all that really means is it'll be more expensive for the rich countries and there won't be food in the poor countries. This is what we see historically is the market clears and the poorest countries in the world suffer and the rich countries complain. Black pill. Do you have any white pills? Is there a good ending that you are guiding towards, optimistic about? Is there anything that you're optimistic about right now? Yeah, I think a major deal is in the works between. Look, I don't think Trump would be going to Beijing. I know we wanted to talk about that. Trump wouldn't be going to Beijing if there wasn't a major deal. And the list of CEOs going with him is quite the tell. Broadly, you don't have the President of China and the President United States get together in such a high profile visit without a bunch of stuff worked out in advance. And I would, I personally being vehemently anti war, would love to see a solution to Iran and Ukraine all tied up in a nice bow. And the US focus on its neighborhood here in the Western hemisphere and, and we get back to growing and computing and competing and drilling for energy and you know, making money in stocks and you know, let the president make all the money he wants in crypto, I don't care. But another war in the Middle east was not on the one. It's not on the bingo card for us in 2026. I don't think many people voted for it. Well, let's shift over to what's happening in America. If we can get back to domestic policy. What are you tracking on the AI buildout? How important is energy? Everyone's been going back and forth on the channel. Chip bottleneck, the energy bottleneck. The chip bottleneck, the energy bottleneck. Do you have a viewpoint? Has it evolved? Where do you see the build out going these days? Yeah, we're an energy newsletter. And so holding that hammer, all we see are energy nails around the AI space. Look, I think natural gas is so cheap and abundant. So then, okay, what's the constraint downstream from being able to produce electricity from natural gas? That's gas turbines sold out. So then, okay, can I make electricity with anything other than a gas turbine? All right, well, solid oxide fuel cells by Bloom Energy, their stock is booming. Okay. If I wanted to get sophisticated, half the Energy used at a data center is for cooling. And boy, there's an awful lot of natural gas in British Columbia. And last I checked it's colder up there than in Texas. And so maybe I might want to look at British Columbia, Alaska, Iceland, cold places to build my data centers. And you're seeing some of that. Yeah, but there's just so much fuel that has become almost taken for granted in the US that this is the fuel of choice. And now you're running into grid connection issues. And so one of the pieces we wrote again before the war changed everything was called irreconcilable differences where we predicted that most data centers would have to go off grid because like the clearing price for retail electricity is not what a data center is willing to pay for it. And no politician can absorb those increases for industry and for you and I at home. And so we sort of envision these buildings where natural gas goes in one end and data comes out the other and everything happens under the same roof. So in your. What's the what's. Sorry to interrupt, but what's the downside there? Hasn't it been in some instances generally beneficial to bring a bunch of new energy production onto the grid just due to more supply? Overall, prices are set at the margin and the rate of demand for electricity for data centers is growing faster than the bureaucratic ability to bring on new grid connected power. The way in which the grid is operated, managed and built out in this country would shock you and it is utterly incongruent with the Silicon Valley break it, you know, move fast and break it mindset and so little Freudian slip there. Sometimes just go, just break it. Just break it. Yeah, you might be moving slow, but you're still gonna break it. Try to fix it. That's the massa sun funded I'll just pour money on the founder until they get it. Look, we wrote a piece called the Exception that Proves the Rule where we showed that, you know, Elon Musk built this major natural gas powered data center for XAI in Tennessee by breaking all the rules. Right. He just built his own natural gas power plant and it proved to us the exception that proves the rule, that the current rules need to be broken for stuff like that to happen. And so since Microsoft and Google aren't ever going to behave like Elon, you need to do this stuff off grid. And so there's a hybrid solution where most of the power is off grid, but they still connect for backup. And you build these at old shut down coal plants. That's Another trend that we're seeing in Appalachia near the big natural gas shale patches up there. So you have an old coal plant with all the connections there, it's shut down. And you build new natural gas plants there powered by local natural gas, and you use the connections to the grid for backup, but you're not leaning on the grid for most of the power. And that's kind of a win win. Walk me through what off grid natural gas powered data center in Alaska would look like. I'm a big Alaska fan. But do they have natural gas deposits up there that you would need to go set up drillers and then turbines? How would that work? And what is the timeline for that versus something like nuclear? Much, much quicker, depending on bureaucracy. One of our operating mental models is that the US has an infinite supply of natural gas. It's just a matter of going and getting it. And so if you made it, for example, if we made it a. Let me put it this way, if Trump issued a nationwide price floor of $5amillion BTU for natural gas, the US would be the drilling stampede that would erupt, would blow the world's minds. The US Produces so much natural gas. I'll just give you some numbers. The entire European Union's dependence on Russia before the war was like 15 billion cubic feet per day. And the US alone produces 110 billion cubic feet per day. It's just this mammoth machine of fuel. And so, yes, there's plenty of natural gas in Alaska. You could build it in British Columbia next door. What about the infrastructure? Like, isn't part of the strategic importance of the Strait that they have the infrastructure to, what is it? Liquefy the natural gas so it can be transported? Are we, are we way behind on that infrastructure? The US Is stampeding to the lead in this regard. So when I was in industry, Freeport LNG. But when did that stampede start? 2015. Okay, so it's been in process. When I was in industry, Freeport LNG was meant to be LNG import terminal. And then the share revolution happened. So just to go back to those same numbers, by the end of this decade, the US plus a sprinkling from Canada, Mexico will have gone from 0LNG export capacity to 30 billion cubic feet per day. And in QATAR Today, about 15 to 20% of the world's LNG capacity sits at a place called Ros Laffen. And a couple of trains were blown up there, 2 out of 14. But LNG is still a small part of the global natural gas trade. So the Strait of Hormuz is not really a natural gas problem in the way that it's an oil fertilizer, refined products problem. Qatar is, let's say, just to make the numbers round, Qatar's 20% of LNG and LNG is 20% of natural gas. That means Qatar is 4% of natural gas. What has the environmental pushback been around natural gas? It feels very intuitive. It's burning fossil fuel. Sure, it's not scarce, but it feels like it could create global warming. And yet I've been shocked that there's been so much focus on the water that's consumed by data centers because that feels much more plentiful and much easier to. Yeah, there's a certain irony that fear around global warming has been replaced by fear around AI, at least mainstream media narrative. Yeah. Yet the. So, yeah, there's. Yeah, there's an always a fear campaign around whatever America's excelling at. That's sort of our mental model. Like, hey, America's dominating with AI and data centers. We better whip up some fear. Yeah. Sort of like a tall poppy syndrome in our culture. It's, well, who knows, foreign actors who don't necessarily want to see the US succeed. Sure. So to your specific question, natural gas is super clean. Burning produces the least amount of CO2 per energy. That's good. In fact, well, you can cook with it in your homes with no ventilation. Nobody would say that you would bring your barbecue indoors. Oh yeah. Which is basically coal. Right. And so you have natural gas in your furnace and you have it on your stovetop, you have it in the restaurant and it's just burning away nice and cleanly. There is one made up problem with it. Well, I say made up. If natural gas leaks, it's considered a very potent greenhouse gas. Methane leaks. They've even launched satellites to try to track where industry is leaking methane directly into the Amsterdam. Yeah. We were talking with Will from Planet Labs. He was saying you can use sort of like real time satellite imagery to track natural gas leaks. And they've been pretty effective, I think, at helping countries and companies identify these leaks. This will blow your mind. Natural gas is so cheap historically and such a nuisance that they would just release it invented into the air to get the oil. This is where the Peaker plant, right before people cared about methane leaks, to be honest with you. And look, this is a much better, much smaller problem in the us US is very regulated. Environmental permits and controls are tough. Where it's a big deal is places like the Middle East, Venezuela, where there's you know, weaker governments, weaker environmental controls. Yeah. But you can go online and find a bunch of people really hyperventilating about methane leaks. Who else is big in natural gas across the world? Like, who are they? Do you know what country is number two? Three, Something like that. Yeah, I know them all. Yeah. So US is by far the biggest. Russia is number two. Oh, is that some kind of. It's an eagle. As an eagle for us, For America. Yeah. Chickens don't like eagles. Oh no, no. Yeah. So you kind of get kind of triggering me over here. So Iran, Russia, Iran's a big natural gas player, obviously. Canada is a growing natur natural gas player because of the shale patch they have up there. Australia is a big LNG exporter, Qatar is a big LNG exporter, but Russia is the second biggest. They probably produce about half as much natural gas as the U.S. and then, you know, a sprinkling throughout the old Russian, the old Soviet Union, the Confederation of Independent States, I believe they're called now. What are you tracking on the nuclear side? Every time we talk to a nuclear founder, they're ready to run through walls. They're, they're well funded, they're ex SpaceX, ex rocket scientists, geniuses. They're like. And then they're like, it's 2035. Yep. Is there any optimistic scenario where we get nuclear a little bit earlier? So there's only one way to do it, which is not seductive and doesn't require any technology, which is just build a lot of the stuff we already know how to build. So that's AP1000 and Candu reactors up in Canada. And there's no, like, fusion is a fake solution to problems that don't exist. Like, we don't really have a nuclear waste problem and we don't have a meltdown risk problem with the latest designs. And so all we have to do is build what we have. But that's not sexy and that's not a technology store you can sell on Wall street and have your IPO and you know, so that's our scientist. Well, there are some companies that are not trying to reinvent the wheel and are just saying, like, let's just do more of what we already know. Whether or not they should be venture backed is another question. I think there's better use for venture money than nuclear. Yeah. Where is solar and all of this? How much out of, out of all of your coverage, how much is dedicated to solar? I think that will. We write about intermittent renewables from a pretty critical lens. Broadly Speaking. There's an awful lot of misinformation and disinformation about solar. The biggest one is that the sun is free, as though the price of a fuel is the only input into the cost to use it. As we're learning with natural gas, it's free in the waha hub. Doesn't mean that you can buy your turbines and build your data centers. And the biggest challenge with solar is that sometimes the sun doesn't shine. And dealing with that intermittency is a real challenge. And the expenses associated with making room for solar when it's there and getting out of solar's way, you know, when it's really hot and the sun is really shining, but also standing in for solar when it decides not to show up for work. Those expenses are never ascribed to solar. They're just piled on to all the other technologies that have to stand ready. And so historically, whenever you reach a certain threshold of solar on a grid, things start to break. I could explain technically where that breaking point is, but it's probably beyond today. Doomberg. Is the name Doomberg, like reflective of your demeanor at all times? It's mostly tongue in cheek sarcasm. We're techno optimists and we are defensive pessimists. We spend a lot of time pondering worst case scenario risk and then once those are properly abated, we feel that we're in a position to take more risk personally. I'm personally a prepper, for example. That's good to know. I wouldn't have guessed that Doomberg was a prepper. Actually maybe I would have. I had one question, one last question and then I know we're out of time. Would love to do this again soon. I enjoy talking with the chicken. Although your eyes do make me kind of go cross eyed myself, which is a challenge. Do you believe that? We've seen videos online of people filming data centers with generators outside them. They seem to be not exceptionally loud, but loud enough to be mildly annoying. Lower decibel than sort of legal limits, but still. Maybe not something that someone wants. 59.9. Yeah, maybe not something that someone wants in their backyard. Do you think there's any innovation on reducing overall like noise pollution on that front? Or is that to date, you know, at least we talked to somebody yesterday who was like that's the least of my issue, you know. But it feels like something that probably can and should be worked on. Unless you're in Alaska. Nimbyism is real and I don't think should be dismissed. And I think local concerns are always worth listening to, especially if you want to be durable as a good neighbor and as a, as an industry that has, you know, persistence. Yeah, historically, like factories were very ugly, but they provided a lot of jobs. And so if you come through and you're like, hey, we're going to build a new factory, but it's not going to create a lot of jobs, that's not a super compelling pitch. Right. And it's going to be loud, you know. So I assume that the diesel generators are there for backup power predominantly. That's what we're looking at. Yeah, that's right. And I would suspect that there's all manner of venture backed companies pitching stationary batteries. You know, a stationary battery for backup at a data center is a different problem set than say a battery for an electric vehicle, which gives you some more degrees of freedom in design than, as you know, because with a car, for example, you care a lot about gravimetric energy density, whereas you might have different CTQs for a battery set up to provide backup power for a data center. And so there's lots of people working on it. I see some private deals floating around in our own personal lives. Look, the speed with which this revolution is unfolding means that you're going to break a few eggs like we were talking about earlier, move fast and break. Stuff is happening. It's real. And you'll see local communities embrace it because there are jobs, construction jobs and so on that come with these things. And they're not all yet staffed by robots. And we have lots of eagle eggs or both. What are we breaking here? I'm in the egg business. It's a renewable resource from where we are, it is a renewable resource. That's an optimistic. Last, last question. Do you think California will be producing more or less oil in 10 years than it is today? Oh, way more. Yeah. They're heading for a big crisis and you know, California needs to drill more, refine more, and connect pipelines to Texas. And I do think one of the big laments of the Trump supporters is that this Warner End may have squandered the opportunity to get domestic energy projects like that over the line. Where he had political wind at his sails. We'll see. But I think, let's put this. Well, I'll leave you with this. California has as much oil and gas as Texas. And the reason why Texas is a global energy superpower and California is a flaccid energy vassal is little more than politics. And you get a big enough energy crisis, politics is easy to wipe away. Hmm. Yeah. I had the pleasure of having dinner with a guy who had basically, like, an oil drilling SMB in California for, like, a decade and then ended up shutting it down about a year ago because of some new regulations. And he was just sitting there being like, I don't, you know, just kind of at, at a loss because he's like, we use so much oil. We. We depend on it. We should be making it here versus just importing it, so. Well, thank you so much for coming on the show. This was a pleasure, and we appreciate it. Guys, rest of your day. We'll talk to you soon. Thank you so much. Thanks, guys.

Because we have Roger lynch, the CEO of Conde Nast, with us here in the TVP in Ultradom. Roger, great to see you again. How are you doing? Good to see you. I'm all right for those. I mean, we were hanging out last week, but for those who don't know, introduce yourself. Let's go a little bit back in time. Take us on your journey and then we can get into all the hot topics in media. Sure. Well, yeah, I've been CEO of Cunninghouse for seven years, but prior to that, I spent my whole career, really in technology. And primarily a fantastic guitarist. Thank you very much. That was my life's ambition. That was an incredible performance. It's a little bit of just lore, I guess, but we can get into hobbies and things outside business. But, yeah, take us back. What was the first job in media? How did you get to where you were? First job in media? Yeah. Maybe that's a good place to start. Well, I mean, it depends on how you define media. Sure. I spent my career at the intersection of technology and media. So the first company that I ran was a broadband business. It was one of the first broadband businesses in Europe going back to 1999. And literally one of the first things we did is we did a deal with the NFL to stream live NFL games in 1999. That's crazy. How much demand was there for NFL in Europe at that time? Well, the reason the NFL was interested in it, this is back when Paul Tagliabu was the commissioner. He came over to announce this crazy idea that we had was they were trying to build the NFL in Europe and they had. They're like, I hear people love football over there. Why aren't we making money? Why isn't it our football? They had. I think there was a team called the Amsterdam Admirals at the time. There's a European football league they're trying to promote. And, you know, broadband was a really interesting technology and I was really excited to see how it could be used to change how people consume content. And that's why we did that, that deal. And then I started an IPTV company. First Video on Demand IPTV and then Sling tv, streaming tv. So always sort of at the intersection of technology and meteor content. Then I ran Pandora, the first company I ran that I didn't start. I loved Pandora. Yeah. Pandora is truly. When I think magical. When I think of magical. When I think of magical technology experiences in my childhood, I think of Pandora. I think of being in my garage with my dad. We'd be like playing pool Listening to music, so many obscure songs on Pandora is amazing. Was there some sort of unique opportunity with Pandora around treating it like a radio station? Because it feels like there was some sort of licensing deal on the back end that was not the same as Spotify or itunes store at the time. Right. Because, yeah, the trade off I remember I must have been intuitively at the time I was like, okay, this is a fair trade off. Like I'm used to going to itunes and having to pay 99 cents or I can just kind of like roll the dice. Maybe I'll get my. Maybe I'll get my favorite song on Pandora. So I found myself on Pandora a lot. Pandora took advantage of some rights that allowed them compulsory rights, allowed them to stream all of that content and. But you know, one of the trade offs was you couldn't choose the song. Yeah. And so they did launch a subscription this long before I joined subscription service. But were late for that game. They were quite late for that game. By that time, Spotify already had a very strong presence and some of the other big tech companies were getting into it. But you mentioned AI. I mean, to me, one of the key things with Pandora was the way it combined sort of human taste with AI. So we had a team of musicologists and one of the, you know, you mentioned, I've been a guitar player all my life. One of the best parts about that job is they were all fantastic musicians. So we do these company events and we'd play all the time. And these guys were so. And they were mostly men, were so good. But then we had the data scientists also and they would take the work that the musicologists did and create their machine learning algorithms around that. And each of the algorithms they had, I can't remember, 90 or so algorithms. Each one would get tuned for every individual listener. So it would be weighted a little bit more. Jordy likes this. John's like this. And so it creates a personalized experience. And to me, I still listen to Pandora. I also listen to Spotify, but when I want something just to put something on and let it play, I'll go to Pandora because I think those algorithms still outperform. Yeah, I mean, we've talked to this new co CEO of Spotify, but that AI driven feature, the promptable playlist, is just coming to Spotify this year. And I'm sure it's souped up and powerful and stuff, but it is remarkable how long that, like Internet radio, these things have long. These things have long lives. I'm wondering about your view on DURABILITY in media generally. It feels like anytime that there's some platform shift, there's endless. Think pieces about legacy media is dead, linear TV is dead, this is dead. Everyone loves to talk about that. But in your experience, how does the media industry actually change as technology arrives? You know, the media industry is as a history of not changing quickly enough. And you can start with the music industry. You know, music, recorded music industry peaked in 1999 and then, you know, Napster and that sales revenue. Yeah. And recorded. Recorded. Recorded music industry. Yes. We found out like last week or the week before that vinyl record sales are like something like 10% of streaming revenue, which sounds. So vinyl records. So that's an interesting trend to talk about. But what the music industry did or didn't do is. And this is one of the big mistakes and you know, like most lessons that you learn, you learn the biggest lessons from your mistakes. What the music industry didn't do is look at how their customers were behaving and say, okay, let me craft my business around that. They said, no, I don't like that behavior. I'm going to change the behavior. Let me sue these teenagers in Iowa who are downloading music or sue the ISPs or their parents or whatever. So I could change the behavior back because I really like it when they buy CDs. That's really good for my business. That was disastrous for the industry. So finally, once they had, you know, embraced, you know, downloads and then streaming, it started growing again. It's only just gotten back to the size it was in 1999. You know, 27 years later, there's more people and people still like music just as much as they did before. Of course, of course. But they fought it for far too long and it's a mistake. Vinyl records have grown every year for the last 18 years. And sales of vinyl records, and it was, it used to be people my age buying vinyl records and collecting them. Now there is many people in their 20s buying them as there are people in their 50s or 60s buying them. A lot of people in their 20s don't even own a record player. They buy the vinyl records. There's an interesting trend that we, and we see it a bit in our industry too. Like young people buying physical magazines. Yeah. Yep. It's like, why? Well, I think it's a search for authenticity. I think when you have so much digital content that is in your pocket and it's all free or free to consume, it becomes less valuable and, and maybe less authentic to you. And so, yeah, and there's, there's something that's always been missing from like part of the, the experience of being a music fan to never actually go and trade your dollars. Like I think people do like to vote with their dollars and express their interest and actually have this physical embodiment of their, of their taste. Well, they're doing it with live music now. That's where the money has gone. Yeah, the money is, you know, really moved to live. It used to be, you know, in the 90s and 80s and everything people would go on tour to support their record sales and now it's the reverse release the record so you can go on tour and sell tickets. And it feels like the in person events, stadiums are getting like the capex is just skyrocketing across the sphere. Sofi Stadium here in Los Angeles. There's like more and more ways to draw people in with like ever larger spectacles and these like shelling points where like did you see Taylor Swift in the eras tour? Like that was a key moment that even like the casual fans needed to find. So after Pandora, talk about the journey into Conde Nast. Yeah, it was, you know, I wasn't at Pandora very long because we sold it to Sirius xm. Yeah. And you know, I was thinking about what I wanted to do next and I was fortunate enough to be in process on four different companies. Two were in New York, two in LA, where we're from, LA. So LA had a lot of attractions for us and I was flying back and forth between New York and LA and having trouble deciding what I wanted to do. And my wife was like, usually you're so decisive. It's like, I know it's really tough. And then I finally realized on one of these flights that when I'm sitting here I had all the information on all these companies. Every time I'd go to the Conde Nast information I wanted to read about that. It was like. And that's literally how I made my decision. That's the most intellectually interesting to me. I'm going to go do that. But there were a couple of criteria I had for what I did next. One was I still like the intersection of content and technology and distribution models. But non exclusive content was going to be dominated by big tech companies. Music, films, tv, whatever. The stuff that I had been doing had all been non exclusive. Like I wanted to go somewhere where we had our own content, we had our own brands, we could control our distribution more. And so that was certainly one of the criteria. But also still the opportunity to innovate around technology, how you use technology to create new business models, distribution models, and you know, Connie Nast really fit that well. Yeah, yeah, there is interesting. I mean, we've talked about this a ton because, you know, thinking about all the new categories of media which we joked about, we put out this really like unhinged market map of media as a joke. And then unfortunately, people, we like, called ourselves neo traditional media, which was a joke. And then now people will tell us and be like, you guys are a pioneer of neo trad media. We're like, we created that category as a joke, but something that we've come back to over and over is just the value of these legacy brands that have been built across decades and how, you know, take away like the business models and how those are evolving. Like, it just seems like the value of a Vanity Fair or a Vogue or the New Yorker are, are shockingly durable because we're just. You can make more of these kind of properties, but you need decades. Right. And so I'm wondering your strategy around kind of how you think about counter positioning these brands against the content that is flowing so freely across. You're referring to the trough. What's that? Oh, yeah, yeah, yeah. The trough of social media apps. But yeah, but yeah, like even, you know, I've also talked about the, the challenges with substack around certain stories. Substack. If you're an individual selling a subscription, it will reward people that publish multiple times a week that sell a subscription. And yet there's so many stories that take months to tell. There's great stories out there that you'd want somebody writing, spending a year on it. Seymour Hirsch is not going to break the My Lai massacre on subscription. And so there's this opportunity of the value of brands and curators that is maintained. And we're not creating. We are like, again, I would say we're creating new iconic media brands, but it'll take 20, 30 years. Right. It's just you cannot do it overnight. And then how these things can operate as platforms where there are a lot of super talented writers that shouldn't be trying to publish every single week, because their calling is to publish maybe once a month or even once a quarter at different points. Right. And finding those lanes. So I'm curious about how you're thinking about the role of the different brands under Conde Nast and, you know, counter positioning against platforms like traditional social media or substack. Look, I think you bring up a really good point about substack in particular, which is it is a Great platform for certain creators. Yeah. And if you are, if you want to be on that, bit of a hamster wheel, meaning. But it may not feel like a hamster wheel to a lot of people. Like, they love to publish content multiple times a week. That's great. It's a great platform for that. If you want to spend 6 months, 12 months deeply researching something and Substack is not the medium for that, it won't reward that behavior. The New Yorker is, It really is. And we get rewarded for that by our subscribers when we come out with these really deeply researched investigative pieces that, you know, we have a huge army of fact checkers at the New Yorker that comb through every single word in that so that when it is published, it has really, really been thoroughly fact checked. When we publish that, we see the numbers spike on subscriptions. Our subscribers reward us for that type of journalism in a way that I don't think works so well with Substack. Other things work really, really well with Substack. Yeah, yeah. That said, there's been, there's been, you know, we cover tech primarily, so we've seen a lot of people from tech leave this sort of like brands or platforms to go to Substack. And some of the, some of the times they come out and they're just scooping every single day. And it's, it's amazing. But more often than not, I'm like, I actually wish that at least a few of you guys go to one company and I could subscribe to you and you weren't feeling pressure. Oh yeah. And I don't actually want like, for a lot of people, I'm like, I think you selling ads is a waste of your time. You should just be writing. Right. And a lot of them feel that. And then the hamster wheel thing, I was talking to, you know, really big substacker yesterday and they were feeling that, they were like, I don't, I don't want to publish every day. Right. But you built a business around that and then you're sort of like trapped to this business model. So, so anyways, I think we're going to. I've said it. I think in this age of AI, in this age of slop and sort of like ultra fast media, I believe that being a true journalist, being a reporter, being a writer is only gonna. I think it was always relatively high status, but I think it will even go up and up and up over and become more valuable. Yeah, yeah. And it's more valuable. It's like we want people that are Doing original journalism, fact finding, it's so essential. And then also, yeah, just spending the time. I mean, we're sort of a symptom of the Internet, right? We make ultra fast content. Right. I don't expect people to watch most of any of the shows from last week. Right. Maybe there's some interviews that are sort of durable, but the majority of the commentary, it comes and goes. Right. We expect people to watch it in the 24, 48 hours that we create it. But there's so much content that I think about sitting down on a, on a Saturday where I'm like, well, maybe I want to read, I have limited time, maybe I want to read something that somebody put six months into. Look, I think it's important to know what you're good at and take advantage of that and not try to be something that you're not good at. And you guys are really good at exactly what you just described. And so you've made the most of that and you've attracted a really important audience and it's really worked for you. In a business model for us to try to chase that would be to move away from what we're really good at and try to become something different. And I agree with you. I think where with the amount of AI generated content or low quality content that is being flooded into the market, that only I think accrues to the benefit of companies that can really stand out from that. And so don't try to be that. Like I always tell our we're going to always have human created content. First of all, I think it's what I know, it's what our audiences expect and want. Then secondly, we have no competitive advantage over just creating AI generated content that doesn't leverage any of the advantages we have. And so knowing what your advantages are competitive and really building upon that I think is always important in any business and for the industry changes that are happening right now, I think there's real value in it because unfortunately there's going to be fewer places that can do that because the ones that are more marginal may not survive the changes that are happening. And our brands have been really thriving in it. How do you compare your philosophy of running like a house of brands versus, let's say an lvmh. Is there similarities, differences? What is the philosophy? Yeah, I mean, when I first joined I spent a lot of time talking to those companies to try to understand how they were organized because one of the things I had to figure out is what I wanted to do with the way we Were structured because we were structured very differently. We were really a loose collection of companies all around the world. Every country operated entirely independently from every other country. Really? Oh, my God, it was crazy. There was no technology collaboration. There was no. They competed. Literally. I remember, literally three weeks into the job, I start traveling. I go to Milan. You know, I'm trying to visit all our different offices, and I get a call from my assistant like, you know, some of the team in Milan is upset you're not visiting. I'm like, I'm in the office. I'm here visiting them. Wrong office. I found out we had seven offices in Milan. Conde Nast US had an office there. Conde Nast Russia had an office. Conde Nast France had an office, all in Milan. All different offices. Because, of course, they couldn't be in the same office because they were competitors. Yeah. So a lot of changes to make in that model. But look, actually, it was a great strategy when the company was a print publication business. It worked by definition. Conde Nast became very big, successful company following that strategy. But it was not the right strategy for the Internet age and a digital age, and you know how. And how audiences had changed. Audiences moved from, oh, I read my local newspaper, my local content, to, I want to see what's happening around the world. I want to consume content from Korea or China or Sweden or Israel, wherever. Much more cosmopolitan in their approach to how they consume content. And so really, we use that as a guidepost to say, okay, how should we structure ourselves and just question everything about how we organize ourselves? And even the culture of the company, which was very, very territorial and fiefdom based to what it is today, which is much more collaborative. So obviously plenty of efficiencies across the portfolio. Geographically, the brands are power law driven. Right. You have a few brands that drive the vast majority of the revenue. Have you been in a portfolio expansion period or portfolio contraction period? Is there benefit to going more focused around the tentpole brands or do you want to expand further? How are you seeing, like the. What we find is, you know, certainly our largest, most important brands have done very well in this. You know, like, Vogue is our largest brand. Yeah, Vogue has grown every year I've been at the company. It grows revenue, grows profitability every year. And thank you. Good news. It is good news. And, you know, the New Yorker also. The New Yorker just had its most successful year ever by a long shot. Those brands, whatever's happening with search algorithms or AI, they seem to just be able to rise above it. Sure. We have smaller niche Brands. Pitchfork, a music brand, very small, it's 1% of our revenue, but it has a very strong, loyal audience in the category that it covers, it's doing very well. And so there's this sort of barbell effect that's happening at least within our portfolio. And then we have some that are in the middle that are impacted more. Either they don't have as strong authority in the category or they're a little too broad that they don't go deep enough in specific categories. Yeah, we were just talking about buzzfeed and it felt like for a long time it fell into that category of, you know, decent sized audience, but ultimately built on the shaky ground of another platform without that really strong core audience that would stick around through thick and thin. How do you think about talent identification? Going with sort of discovered talent, let's say a writer who's established, that already has a following versus somebody who has a lot of potential but maybe hasn't had a breakout moment yet. And then the same thing with executives. Yeah, I think first of all, for writers, we're a great home for the best journalists in the world, in part because I wouldn't have thought this was a necessary competitive advantage several years ago, but it is today, which is that we're not impacted by political influence. We're not under the FCC's thumb. We don't have licenses that they need. We're not trying to buy Warner Discovery and need merger approval. And we're owned by a family whose own company cutting ass for seven decades that, you know, I've been at the company now seven years and not once have they ever called to interfere with anything we do. Therefore, I don't need to do that with our editors. We can just hire the best editors and stay out of their way and let them do their job the best. So that is very attractive to journalists because they know when they come to our company, they're not going to get a call from the CEO or the board or whatever about, why did you say those things about this advertiser or whatever it is? No, the journalism comes first and will always come first. So that helps us attract very established writers. But at the same time, we also are a great place for people earlier in their career to learn because they can learn from the best. So we always try to make sure that we are recruiting really high potential new journalists into the company as well as, you know, the best external in terms of executives, you know, other than Anna Winter, every other executive has turned over since I joined the company. Every single one wow. And I did most of it immediately in two reasons. One, if you want to affect culture, change, change people change people that don't reflect the culture that you want to have. And when I got to Conde Nast, I felt like this is not the culture of. There were great things about the culture, you know, the focus on excellence, really, really deep at the company. But there are other aspects of it, very internally competitive and political that. That I didn't like. And I just decided I'm going to. I want to create the culture of a company that I want to work in. So let me find people who think similarly about. About the importance of culture. And then secondly, because, you know, we were going from, like, in the US it was a. Had its own CEO as a separate company from the rest of the world. It was very focused on the US Market. I wanted people who had much more global perspective and global experience. And so the skill set, I wanted to be broader than what the company had traditionally had. Probably 2018, this idea of content to commerce got incredibly popular. And even by the time we were starting this show, you're thinking, New Yorker protein powder. When's it coming? Yeah, yeah, love that. But even when we were starting this show, a lot of people said, wow, you have this audience of entrepreneurs. Why don't you build your own software and spin out software companies or develop stuff internally? And we said, with what hours in the day are we going to do that? And why would we deserve to win over a team that is entirely dedicated to a certain problem? Where has Content to Commerce worked within Conde Nasty? And where have you experimented or avoided it? You know, the. If you think about from an advertiser perspective, the reason advertisers have always come to Conde Nast is the influence that we have with audiences, right. That, you know, whether it's fashion or travel or home, you know, it's the influence that we have now. You know, that was very, very true in the print era. It's very true today. But they also have many more avenues to reach audiences than they used to. So for us, when we look at commerce, we think that ability to influence audiences certainly exists even more than before because of how much larger our reach is. And so we can use that maybe not to create the New Yorker protein powder, but to sell fashion, to sell travel. So we've been investing in commerce, but not creating our own products per se. Partnerships. Yeah, in partnerships. And that also has grown every year. And we announced it'll be launching soon, an initiative we announced last year called Vet, which is really at the intersection of certainly E commerce growth, social commerce in particular, and the creator economy. And so what VET is we have relationships with all the luxury fashion companies. We're using those relationships, creating a marketplace commerce platform that then creators can use to connect with their audiences. And so we'll be working with initially a small number of real taste makers in fashion and then using the relationships and the technology we've built to create this creator marketplace called vet. How do you think about journalists becoming influencers? Can be great. Develop their own audience and then that draws more people into their stories when they do have something to publish. Double edged sword. Because if they leave, they have an audience that might sign up on day one. They might say something that doesn't necessarily represent the views of the publication. There's sort of, you know, some, some organizations have gone back and forth on it either saying everyone needs to be posting on Instagram every day. To you can never post on Instagram any day. How have you toyed with that or dealt with that tension throughout your career? Because we have, as you said, a house of brands. Our brands are very different. So a journalist for the New Yorker may be very different than a journalist for Vogue in their approach to that question. So we don't have hard and fast rules that we would. So no one size fits all. Definitely not one size fits all. But we do know that journalists that are able to build profiles for themselves tend to be good for business. So we certainly support that. Got it. I want to talk about events. Are events more power law driven? Do you want to raise the long tail of events? Do more, more events and try and elevate to something where there's a Met Gala happening every week or something? I don't know. Where does the event strategy go? The events for us are one of the fastest growing parts of our business, but not because we're just doing more and more events. We're actually doing fewer events than when I started. We're doing fewer events, but we're focusing on events that really are what we call cultural moments. Matt Gala is a great example of that. You know, Met Gala was last week, you know, last Monday. Yeah. You know, in the first seven days. I just saw the numbers. Last night we had 3.1 billion video views of the content we created. That's remarkable. It is. It was up, I don't know, 60 over last year. And isn't a lot of it like off the record too? Like there aren't necessarily. I've never seen, like you can't just live stream it. You can't watch what happens inside. Or, like, there aren't, like, microphones on the dinner table. We do a live stream of the red carpet. Yeah, yeah, exactly. So it's even eliminated in terms of what you're sharing. Livestream had 200 million. That's amazing. Wild. So every year we do the Met Gala. Yeah. It just grows at a level that's hard to believe. And we finish it and we go, oh, my God, how are we ever going to exceed that next year? And then it grows 65% again the next year. Wow. And it was the same thing for the Oscar party. Vanity Fair Oscar party this year. 65% growth year over year. Remarkable. So I think we found a playbook on that, but it's not a playbook where you can say, oh, great, let's just do one a week. Yeah. You can't create cultural moments like that. What you can do, we found, is doing fewer and doing them at very high quality. Sure. And make them global events like the Met Gala is a global phenomenon now in a way that it wasn't, you know, seven years ago when I joined. It was an important, very important, you know, event that people in the US Knew about and people in the fashion community around the world knew. But by bringing the company together into one organization now, all of our brands globally promote it and promote the live stream and the content from it, and that's really helped elevate it to become now a global cultural moment. Yeah. Interesting. Help me. I don't know how much you'll be able to say here, but help me understand why BuzzFeed is worth something like 120 million. No, 240. About half the company, for one. Oh, half the company, yeah. 240. What's the revenues? Declining. Decent. You know, run rating. 60 million a year of losses, I would guess an aging audience. Do you have any idea where the. Where the value is? Well, look, the only thing I read about that is there was a $20 million going into it. If it was 120, there's a valuation of that. But there's a stage you guys may have written. Okay, okay. Yeah, yeah. But look, I can't speak specifics of that business. That was a business that did very well. They were very innovative around a different era of the Internet. And you could take search traffic and social media traffic and turn it into commerce dollars or other things. That era is gone. Why? Why? Yeah. What killed that era? Like, people are still spending time on social media. They're still searching on Google, and yet publishers have not been able to monetize traffic or generate traffic from the activity. My other thing is like I look at BuzzFeed as like, you know, I look at Conde Nast. This is like luxury media. That is what, that's my personal view on it. It's like this is the LVMH of media and buzzfeed was like a fast fashion. Just say you've never been to the BuzzFeed Gala. Think about, it's really interesting. We did this for a board meeting about six months ago, took a snapshot of search results from, I don't know, seven or eight years ago. And what you saw were a few sponsored links and then the 10blue traditional search page do the same search term today. You get an AI overview. Yep. Then you get rows and rows and rows of commerce links. Yep. And then you get, I was saying somebody, somebody last week was saying, how is search revenue up? I was like, have you, have you done a search recently? Yeah, I basically have to go to the second page to get an organic result. It's been good for Google. Yeah, it's been great for business. If you're a publisher, you've crammed down page. Okay. So if you were, if you had a business that relied on that to arbitrage that traffic to sell whatever, that business got very, very difficult. Yeah, yeah, yeah. So you know, and look, the changes in search traffic have certainly impacted our business, but not to the point that we haven't been able to grow our revenues and grow our profitability. But it's a headwind. Yeah. But you know, last year, so, you know, each of the last three years we would do our budgets and we put some forecasts in of search traffic declining. You know why? Just because we'd seen the pattern of algorithm changes and generally those algorithm changes were negative. They had negative impacts. So we're going to forecast it to be down and then every year it was down more than we forecast. So last year I told our teams, assume there's no search. You have to have your businesses planned as if search is zero. We don't expect it to be zero, but we, you know, don't bank on it. We expect it to be a single digit percentage of our traffic very low. So we started working on plans for each of our brands around that and some of the brands we looked at said they don't really have a good plan for that. So we're going to reprioritize on the ones that do. And, but if, you know, if you don't have those paths forward, you Know, if you don't have really strong authoritative brands or brands have very strong niche in certain areas or direct audiences, then you're just going to be fighting that all the way down. Talk about subscriptions, bundles, subscription pricing. In a time when we have little spurts of inflation here and there, how important has that been? How resilient has the subscriber model been? What are you seeing there? You know, it's a very important part of our revenue stream. And our Digital subscriptions grew 29% last year. Revenue. Wow. And you know, they're big, growing double digit percentages this year. So it's a really important growth area of our business. And we're launching more digital subscriptions for more brand like Pitchfork small brand just launched a subscription earlier this year. Tatler, another small brand in the UK launched it. But you know, our big brands, the New Yorker, you know, very, very strong growth vogue is showing incredible growth in digital subscriptions. So that's an area that's important for us. And we think we've built up some really good capabilities both on the technology side, but then also on just the people capability side too. And then do subscribers get stuck in a mentality of I pay a certain amount and they're resistant to a price adjustment in a time of inflation or is there some price elasticity there? You know, we have raised prices on subscriptions fairly materially over, over the last couple of years and you know, each year we think, okay, we're raising the price, we're going to, the retention is going to go down and actually the retention has gone, gotten better every single year. So the elasticity looks pretty good. That's good for us so far. Yeah, in some ways, you know, and we're the biggest fans of independent creators on Substack and other newsletter platforms. Like we, we really, we have a lot of them on the show, we subscribe to a lot of them. But in some ways they're helping your guys's like pricing dynamic. And they're like, Well I want $20 a month for my newsletter that publishes twice a week and I just kind of like write what I'm thinking. And you guys are like, well, we're going to give you all of these stories and all of this video and images and these deeply researched stories. And so you're product or a subscription for one of the brands starts to look like incredible value because you're like the alternative. My dollars are going to go way less far with an independent creator in terms of volume of stories. Now you don't get the Same dynamic that they have which people just like to support independent writers and content creators. That's a part of it. Just you enjoy saying putting, you know, kind of helping somebody be in business. But I think that's an interesting dynamic. Can you talk about the further niche ification of media? Architectural Digest, the New Yorker. These are already not niche publications, but they have a category, Vogue, gq. Right. There's a theme to the product and what we've been tracking over the last couple of years is that the Internet native media properties, the creators have been able to find even smaller niches. So we've talked to someone who just does car reviews or just does car dealership. The car dealership guy was a good example of like that would not be a national magazine but he's made a business work there. And I'm wondering if there's opportunity for more niching or if there's value in not over niching a product and how you're thinking about. Because you see all these niches and you think okay, maybe there's a roll up strategy or maybe there's some sort of synergy between them. But that's already sort of playing out on the platform in the sense that like YouTube is making money from both Doug DeMuro reviewing every car and the car dealership guy talking about the dealer side of the automotive industry. And these are separate from an automotive magazine that might sort of in previous era address both sides. You know, I think where publications can get hurt is if they're caught in the middle. Sure. If you, if you try to be too broad, too large of an audience. This is not the era for that. Yeah. You know, five years ago maybe that worked, but not today. You either need to be large and authoritative in a big category. Yep. Vogue is a good example. Or Architectural Digest. Yes. Or conjash Traveler would be another one. Or you need to be really nailing a specific niche where you have a loyal audience that's willing to pay and you know, ad supported only tough if you are. If you have a brand where you're investing in the journalism, if you have to make significant investments in journalism, supporting that just with advertising is. Is a tough place to be. But if you've got really content that people are willing to pay for but to do that, don't get caught in the middle. Yeah. Tough place to be. The Devil Wears Prada 2 box office hit. Do you expect that to be a pretty major catalyst for Vogue? You know, it's actually been a catalyst for Conde Nasty broadly. You know, obviously the movie is you know, based on Anna Wintour, and the company is based on Conde Nast. And. But, you know, I was, I was talking to our chief revenue officer a couple weeks ago, and like, you know, we had a really good first quarter. We exceeded budget and second quarter was looking strong. And I asked her, like, you know, what's driving the strength? And she stopped for a minute. She said, the movie. I said, what? Wow. Like, that's driving. Even other brands said, I think, think there's just more interest in Connie Nast in general now. I think it's more than just that. But, you know, I think the movie has created a lot of intrigue and it's been fun. I imagine it's good for hiring. But can you zoom out and talk a little bit about the hiring pipeline? There's so much uncertainty in the job market. Should you become a software engineer, are there going to be no software engineers? AI can write stuff, but can't really do investigative journalism. But there's still a lot of anxiety, like, how are you seeing the next crop of great journalists develop right now? Or advice that you give to new grads who want to work at Copy Nast? Well, we hire journalists and we hire software engineers, and it's different and everything in between business and finance and legal. Look, I remember my mom growing up, she always said, there's always room at the top. And it was good advice. If you can be the best of what you're doing, there's always gonna be room for you. That's remarkable. Moms have the best, best. So good. So for us, you know, journalists who really excel, I think they'll always have a home. You know, in terms of software engineers, you know, we, we, we brought in a new head of product and technology really fortuitously in December. And December was really. You guys cover this very well. Was agent moment a step function change? Yep. And so when he started, I told him, you need to question everything we do. Start with a blank sheet of paper, rethink everything that we're doing, how we do it, and how we can use AI. And the first thing he did is he started some small pilots, three or four people on a team, eliminating certain roles that would have been on a much bigger team to create new products. And he ran the pilot six or eight weeks, and like there was enough information already where we said, okay, let's go make big changes now. And so we just, you know, last month made big changes in that. In that org really centered around how we use AI at the core of not our content, but how we develop technology and products. So, you know, the result of that is there was whole departments that we no longer needed like we used to have. It might be a team of 10 or 12 people on a big project. When you have that big of a team, you need a technical project manager, you need QA engineers, you need product analysts and all these other things. Well, we just redesigned it and said actually you have a product manager and they're going to be the product analyst. Also, maybe there's a designer and there's an engineer and we're going to have AI create the software and also do the QA of it. And so these teams that were 10 or 12 people became three or four people and they moved at three times the speed. So what does that mean if you're software engineer? It means there's going to be fewer jobs. Without a doubt, fewer jobs for now. But if you're a product manager, you can do things that you could never do before because you could actually create the code yourself using AI. Well, yeah, and Conde Nast is a unique company because you guys don't sell technology, you, you sell content. And so you want to make great technology to serve the content, but it's not the core, that's not the thing that you sell. Exactly. Whereas, yeah, we've noticed something, is that we basically we hired a full time software engineer early in the company. Tyler sitting over there. Tyler. And we're the kind of employer that never would have hired a software engineer historically. Because for a small podcasts at the time. Why would you build software? Yeah, why would you build custom software? And so there's job creation happening by companies that never made sense to hire software engineers, but now they can. How are you thinking about. I imagine that at almost all the publications there's essentially no AI doing writing or creative work. But have you had to confront anything on the advertising side? Like I imagine if I flip over the back of the New Yorker, I'm sure I've seen a 3D render of a watch at some point. Will I be seeing an AI render of a watch? Does that matter? Does anyone care? It matters. Last June there was an ad that was run in Vogue print magazine and the ad used an AI generated model. That's right. And it blew up. Yeah. But people who are angry, they were angry a little bit at the advertiser. They're mostly angry at Vogue. Interesting. And I loved it. I thought it was fantastic because it reaffirmed what I hope was going to be the case, which is our audiences want human generated Content they want to know what they're reading and seeing is real and not AI generated. Interesting. So to me that was a really important indicator of frankly our future, that our future strategy about using AI in many, many places to drive efficiency, to reach audiences faster, speed up the velocity of what we do, all to enable us to invest more in human generated content. That, that was a really, especially clothing is really interesting. There's a slippery slope where let's say you generate, you know, you have a real piece of, of clothing and you say put this on this, you know, even if it's a real model, but put this on this model. And then what happens if like, you know, you could just prompt it and say make, make it fit like slightly different. It's like, well then now that you're, that's not the product that you're selling, selling a product that doesn't really exist anywhere. So there's certain, certain, certain categories that I think will. Yeah. And just. Yeah, it'll be a brand decision. And I think ultimately that is why I think your brands will endure because there will be plenty that make the opposite decision. We're going to lean into it, but there's always room at each end of the barbell. So lots of care with regard to AI advertising. Zooming out. Are ads a bug or a feature? If I open up a copy of Vogue. Well, in a print magazine, it's absolutely a feature. I think so. Yeah, without a doubt. I think for digital it can be both programmatic. Display ads may be more of a bug than a feature, but really quality, it's mostly the visual disruption of. I'm reading this beautiful story. I actually like it integrated, sort of a native ad from the publisher that was, you know, considered. But anything that becomes, you know, display ads, just the. So our biggest advertising category is branded content. Yeah. And it's, it's great because it leverages a big competitive advantage. We have our brands, our audiences, but our creativity. And so that's a, that to me is a, is a really great place to be in our business and to see the growth of it that every year, you know, of course we have display ads, we have print ads, some of which can be branded content. A lot of video. Video ads, yeah. Yeah. Anything else, Jordy? No, this was fantastic. Really glad this work. We'll wrap the show right now. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter tvpn.com and we will see you tomorrow at 11am Pacific Sharp. Goodbye.

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