Archive for the Business Category

Media by Comedians – Part I: Jon Stewart

Posted in Business with tags , , , , on March 16, 2009 by zolthanite

So the recent CNBC vs. Comedy Central fallout has created a wide variety of perspectives on the role Jon Stewart plays in the whole “responsibility of media” that allows him to publicly skewer CNBC while absolving himself of responsibility and critical attack.  There has also been a lot of discussion over what Jon did over the past week in order to bring events about as they did, and some fairly bold assumptions about what all of this means in the post-Cramer fallout.

By and large, though, it highlights one of the main reasons why the under 35 demographic gets its news from sources like The Daily Show and Colbert Report: Satire is not satire unless it has truth to it.  What happened Thursday night was something that only happens when people fail to realize just what they are getting in to or have too much pride to back down, and highlights why Tim Russert, when he was alive, was such a valuable journalist and interviewer.  Critical discussion with high-profile people about their actions is a rare commodity these days.  

A few assumptions of fact before I talk about my take on the past week on The Daily Show 

  1. Jon’s whole point, even during the Cramer interview, was that CNBC has a history of not only being grossly wrong when they have staff that should know better (citing Cramer’s hedge fund and Santelli’s derivative trading experiences), but that they play tee-ball with the CEOs and do not actually have a shred of journalistic acumen.
  2. Jon Stewart (And the other people I plan on bringing up later) is a comedian. He does not have the access and resources beyond what the news organizations put out and maybe a little bit extra from some staffing interns and the like.  He doesn’t do investigative reporting.
  3. Jon, when being serious, isn’t being a journalist so much as an angry citizen who is smart enough to call bullshit when he sees it.  He also makes no claim of being anything other than a comedian, ever.

So, on to the fun:

Relevant Video
Jon’s March 4th Callout of Sentelli
Jon’s Response to Cramer’s Article
Jon’s Response to the Cramer media rounds
Unedited Cramer v Stewart Interview



A large part of the article rebuttal (Link #2) was about the “Buy Bear Stearns” comment Cramer made on his show and when exactly that took place.  So to associate stock prices with each clip in the reverse order I spent a stupid amount of time trying to find free NYSE historical data.  It’s amazing how hard it is to find data associated with a delisted company when the symbol has been recycled into use:

January 24, 2008: Bear opens at $68, closes at $79, via closest data point from two-days earlier.  Not the exact date, but still it was there.

March 6, 2008: Bear at roughly $69 via the clip

March 11, 2008: Bear at $62.97 via the clip

The other thing is that Cramer, in the more candid and reasonable January clip, explicitly stated his recommendation was based on intuition, not on strong financials or anything that would quantitatively support his claim.  But actually, if you listen to the clip, he was being completely honest that the stock would pay off under the assumption that Bear Stearns would be for sale.  I’m assuming this would be no different than buying Take-Two stock prior to the EA acquisition announcement (That ultimately failed, but TT’s stock spiked fairly high for a long time as a result).

But Bear was holding semi-steady in those two months before it died.  No one actually expects a company to suddenly disappear overnight, despite the fact we have strong history to the contrary (Enron, if you really needed one).  So despite writing on the wall to the contrary, most market people sit in the delusion that size created financial invulnerability, when in fact the opposite is true.


The Meaningful Takeaway

First off a note on Cramer:  Cramer is an extremely intelligent guy.  The clips from him on The Street are indicative of how adept the man is at the financial markets and how the game is played.  He also has a lot of pull in the financial community.  In a sense, he serves as a symbol for much more of the financial industry than just CNBC.  For that night, however, he was as close to CNBC as Stewart is going to get.  Honestly, though, CNBC kinda threw him under the bus by doing that to him coupled with the lack of follow-up, and I have to give him credit for showing up when they knew Stewart’s position beforehand.  Chris Matthews probably wasn’t so lucky here.

Stewart also has gone after the media before.  Stewart’s 2004-ish appearance on Crossfire is pretty iconic of that.  He hasn’t said anything new, he just has a new example to work with.  That’s pretty key.  This isn’t an “anti-Obama” attack on Cramer specifically by Stewart because of the article, despite what people are saying.  Stewart and Colbert have an entire living based on mocking the media as well as what it reports.  More importantly, Stewart himself as a history of railing against mainstream media on a more personal level, which is a belief he holds and was indirectly mentioned in a 2003 interview with Chris Matthews on The Daily Show.

So what happened?  Really, what you have is an example of someone doing investigative reporting without actually requiring political or social access in order to do so.  That, in and of itself, is impressive.  More importantly, Stewart’s main point of CNBC’s trusting CEOs statements about their own companies and taking everything at face value is doing their entire organization a disservice.  They get no real information out of it and, based on bold face lies, attempt to make meaningful decisions.  It’s a punchline that the new breed of political comedian has used as a platform to very great success: Government is stupid, and the only thing dumber is the people who report on it.

The reason so many people, myself included, use The Daily Show as a primary news source (I also read the Economist, BBC, and a few other things as well) is because very few of the big-names in broadcasting take the time to report on the administration/politics/whatever based on anything other than face-value nonsense.  The juxtaposition of contradiction in statements is both comedic AND informative.  The Governor Bush vs. President Bush “debate” is still one of the best sketches I’ve seen on The Daily Show.  

But rarely does The Daily Show have the opportunity to do with other political figures what it did with Cramer, and in all honesty it shouldn’t have to.  That’s the job of the media.  That’s why freedom of the press is in the Bill of Rights.  Meet the Press did the same thing with guests on a regular basis (In the Tim Russert days, I believe the Cheney interview is the relevant one there, although Rumsfeld was decent enough as well), and Face the Nation did a similar thing with Rumsfeld and whether or not he had used the words “Imminent Threat” on Iraq.  Our media should protect us from everyone else.  Like Jon said, “I want this Jim Cramer to protect me from that Jim Cramer.”


Online Communities: Financially Dubious

Posted in Business with tags , , , , on February 12, 2009 by zolthanite

Today is a sad day.  Jalopnik is losing one of its regular weekly writers to weekends.  And it’s because of money.  This isn’t the first time this has happened on the Gawker domain.  Valleywag went from five people to a single editor merged into Gawker, Kotaku lost Maggie, Deadspin lost pretty much its entire weekend crew of good natured commenters and live-bloggers that would do posts, and god knows how many people the other domain sites had to let go.  Hell, Consumerist had to lay off all but two people, almost all of whom were rehired once they were bought by Consumers Union and left the Denton Empire.

And herein lies the problem:  The people that get axed are loved by people who only pay attention to those unique, individual voices.  Take Kotaku:  Leigh’s monthly post on culture in gaming is the only consistent source of real-world engaging, game-related articles.  Maggie would frequently bring in the study of Chinese history, cross reference posts from BrainyGamer, and actually provide some non-journo, intellectual posts.  Not to say Kotaku is bad, but they lost a fairly unique voice in a roughly homogenous group of people.  Jalopnik is no different with Murilee, who is pretty much the only source of older car articles (Down on the Street and Project Car Hell) in an otherwise modern car trend blog thing.  And now that is looking like mostly a weekend-only gig with the other editors filling in as best as Wert can manage.

The problem as I see it is this: You have a set of blogs that are only as good as the people writing them.  The strength of those sites is not the readers, its the bringing those readers together under the collective of different banners for the same goal.  The unique quality of all of these writers is the same thing that makes Top Gear special: snarky writing with a group of fairly heterogenous people who love what they do.  Everyone who watched Top Gear probably has one presenter they would totally nail for free (Although I love Clarkson, mine would probably have to be Captain Slow).  If you were to replace Hamster with Jay Leno, you would completely break Top Gear.  The fanbase would shatter, because then you’d have a guy that is pretty much an American James May, and the chemistry would be gone.  The Gawker Media sites are no different.

For celebrity gossip blogs like Gawker, the impact probably isn’t that large.  But for semi-niche enthusiast sites like Jalopnik, you have a problem.  The fanbase isn’t based on appealing to some lowest-common denominator, it’s appealing to a very specific subset of people who care about whatever is going on.  This set of people is not that large, and ripples in the pond cause major percentage changes in population, and subsequently page views.  People who live in the SFBay would read Valleywag, but it probably doesn’t matter to the average housewife.  For a financial model based on ad revenue, you are basically asking for trouble here.  You need to maintain high, daily page views, but you can’t do so without having more editors to have your readers check the site more than once daily.  More editors mean more money.  But with those editors comes new people, new voices, new contributors.  And cutting those new voices out is going to cut into the people that found that voice worth listening to.  It’s an evil Catch-22, because you ultimately need the community to grow and thrive to make money, yet you can’t do so without forking over even more money to maintain a cache of writers that appeal to as broad of a demographic as possible within your enthusiast niche.

By numbers:  Gawker Media had a round of layoffs in October, firing 19 people across all of the websites and a few internally.  Consumerist was forced to lay off half its staff, except for Ben and Meg, a month before being put on the auction block.  It was sold in January to Consumers Union, which was immediately followed by hiring another four editors, two of them coming from the prior layoff (extremely popular editors too).  The result is a fairly substantial increase in monthly page views, with February looking to at least match December’s numbers.  Contrast that with Valleywag, which fired 3 of the 5 members on staff in October, released the 4th after Thanksgiving, and merged the last with Gawker while still keeping separate stats, so as to gain the Gawker community on Valleywag for free, as it were.  Even though the numbers are ridiculously small, especially compared to the page views of the site it merged with, the impact of the merger doesn’t seem like it will affect the numbers of Valleywag all that much.

The problem of monetization is a serious one for people who YouTube, Twitter, Facebook, and run all other forms of social networking/communication-based web services: How do you get money from people talking to each other?  IMVU is doing a fairly good job at that, but it isn’t reliant on ad revenue.  Facebook, as much as any other website, is completely unsustainable without having a massive user base to pull ad revenue from, and all it needs to do is have more people add more friends who will use it.  If you’re Gawker, you have the same problem as Facebook, but now you need to bring people in.  And that takes much more money than you’re probably going to get for some of the audiences you would be trying to attract.

Will Gawker go down in flames?  Hardly.  The websites are (supposed to be) largely self-sustaining, so that wouldn’t be too much of a problem.  But when it comes to large-scale growth, the current city-state model probably won’t allow such a thing to happen in a meaningful amount of time.  And that is a problem, because Gawker Media is a business, it is expected to grow, and it probably won’t be able to do it effectively.