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Tuesday, February 27, 2024

Warner Bros. Discovery reportedly walks away from Paramount talks, ABC News boss Kim Godwin blasts Donald Trump's recent comments as "shocking" and "racist," OpenAI accuses The NYT of "hacking" its ChatGPT bot, Fox News host Brian Kilmeade (accurately) labels Steve Bannon an "extremist," and "Dune: Part Two" looks to breathe life into movie theaters across the globe. But first, the A1.

THE A1

The Social Distortion Field

CNN Photo Illustration/Matt Cardy/Getty Images

Social media companies are soaking up the billions in advertising dollars that once flowed to legacy media companies — a trend that continues to accelerate despite an ever-growing mountain of evidence indicating the Silicon Valley titans govern their ballooning kingdoms with little regard for how their products negatively impact society.

While the dramatic shift has empowered these companies, it has also simultaneously dealt massive blows to news organizations, most of which are struggling to survive as they see their one-time revenue sources sour on their products in favor of tech platforms.

Just two months into 2024, several news organizations are already collapsing in plain sight. The Messenger shuttered last month; an already-slimmed down BuzzFeed announced it would slash 16% of its remaining staff; and Vice Media said it would lay off hundreds of employees and cease publishing on its website as it pivots to an entirely new business model. Over the last few years, the situation has grown more dire, with nearly every major news organization cutting their workforces to survive — if they can. Hundreds of local outlets have not been so lucky, closing their doors as advertising dollars disappear.

Not only are these news organizations crucial to the communities — both local and national — that they serve, but they also diligently work to ensure that their platforms are grounded in facts and free of abuse. You're not going to find articles promoting body dysmorphia in the pages of The New York Times. The Wall Street Journal is not going to casually elevate carelessly risky investment advice. CNN will not enrich itself through imagery exploiting children.

And if any of these companies engaged in such behavior, it would be a major scandal that would not only leave their reputations scarred, but also chase away advertisers. As a result, these organizations invest heavily in content moderation, providing a stream of hand-curated content for their audiences and brands to advertise around.

But the technology platforms, for some reason, are judged by markedly different rules. It's not fair to say the road is littered with examples pointing to bad behavior. It's buried in them. Time and time again, companies like Instagram, YouTube, TikTok, Snapchat, and others have been caught allowing harmful content to exist on their platforms. In many cases, such content has not only been permitted to exist, but turbocharged via powerful algorithms. Child exploitation? Check. Promoting eating disorders? Check. Batshit crazy conspiracy theories that radicalize audiences? Check.

But when the executives of those companies, the very humans who control the platforms, find out about such content and are questioned about it? Well, plenty of evidence has shown they've often run the playbook of releasing vague public statements while failing to address the root causes in a meaningful way.

Just take last week for example. The Journal and The Times published reports (see here and here) indicating that Meta willfully allowed child sexual exploitation to exist on Instagram. The reports were both disturbing and damning, outlining how the popular platform is abused by some parents willing to sell content to predators. "The content, often featuring young girls in bikinis and leotards, was sold to an audience that was overwhelmingly male and often overt about sexual interest in the children in comments on posts or when they communicated with the parents," The Journal's Jeff Horowitz and Katherine Blunt reported.

The duo noted that Meta said it is committed to child safety and monitors its platform for abuse. But they also reported: "A review by the Journal of some of the most popular parent-run modeling accounts on Instagram and Facebook revealed obvious failures of enforcement. One parent-run account banned last year for child exploitation had returned to the platforms, received official Meta verification and gained hundreds of thousands of followers. Other parent-run accounts previously banned on Instagram for exploitative behavior continued selling child-modeling content via Facebook."

Of course, this doesn't represent the vast majority of the content on Meta's platforms. But could you imagine if a legacy news organization trafficked in such behavior, even on rare occasion? The company would immediately be abandoned by advertisers and publicly excoriated, with executives having to issue apologies and beg for forgiveness. But when it's Big Tech? Outside some brief boycotts that have sprouted up over the years and the occasional Capitol Hill committee hearing in which lawmakers (most of whom don't understand the basics of these platforms) implore them to do more, the world largely turns a blind eye and endlessly scroll.

In effect, a substantial portion of the advertising dollars that once supported the carefully manicured gardens of legacy media outlets have migrated over to a free-for-all hellscape ruled by mostly unregulated Silicon Valley deities who prioritize profits and growth over the public good. As a result, the news organizations which work tirelessly to behave responsibly are seeing their business models collapse and future jeopardized, while executives like Mark Zuckerberg tout record profits.

To be fair, brands would likely prefer to advertise on the platforms of responsible media actors versus the risky world of social media. But Big Tech offers these brands much more effective targeting, while boasting a larger and younger audience than legacy news organizations. To make matters worse, news companies have been far too slow to adapt to the changing technological landscape, often sporting ugly websites and apps (sorry, it's true!) and lacking the tools necessary to hone in on specific audiences advertisers want to spend their dollars to reach.

It's a cocktail for disaster — one that will have profound impacts on civilization in the years ahead. News organizations, crucial to a functioning society, are being hollowed out, if not outright dying. Meanwhile, technology giants, which have allowed for harmful content to gain a foothold in the digital public square, are thriving.

——— BELOW THE FOLD ———

CNN Photo Illustration/Getty Images

Warner Walks: No deal! Talks between Warner Bros. Discovery and Paramount Global about a possible acquisition have ended, CNBC's Alex Sherman reported Tuesday. The bosses of each company, David Zaslav and Bob Bakish, had held preliminary talks back in December, exploring over lunch at Paramount's Times Square offices whether there was an opportunity for the two companies to unite. But, as WBD's stock hovers around record lows, it has moved to stop pursuing such a deal, per Sherman. Spokespeople for WBD and Paramount declined to comment. But Zaslav told investors last week during the company's earnings call that while WBD does "have the optionality" this year to start "looking at other assets," any move would need to clear a "very high bar." Read Sherman's full story here.

🔍 Zooming in: That leaves David Ellison's Skydance Global as the only apparent serious player pursuing a deal with Paramount. According to Sherman, Skydance is "still performing due diligence on a potential transaction." Byron Allen has, as he so often does, made a very public bid for the company, but it's unclear how serious it is.

THE INDUSTRY

THE FOURTH ESTATE

👀 Google is paying several independent publishers to pilot an unreleased generative A.I., Mark Stenberg reports. (Adweek)
Sports Illustrated owner Authentic Brands has recovered via licensing deals the approximately $90 million it paid for the outlet back in 2019, Ben Strauss reports in a must-read deep-dive into the problems besetting the iconic magazine. (WaPo)
The Financial Times "launched a new venture to invest in high-growth media and tech companies," Sara Fischer reports. (Axios)
Julia Angwin launched Proof News, a nonprofit outlet looking to elevate journalism via scientific method. (Proof News)
Matt Pearce said he has left The LAT after more than a decade at the paper. "I've taken the buyout. It's been an extraordinary ride, but it was also just time to go." (MP)
MSNBC is surging on Saturdays. Its new show, "The Weekend," is averaging 43% more viewers than it did in December, before the program launched, Natalie Korach reports. (The Wrap)
The BBC announced the findings of a review and issued an apology to the family of the young person who filed a complaint about Huw Edwards, saying it should have moved faster to respond. (Variety)

IN THE MARKET

TKO reported its Q4 earnings (total revenue hit $614 million), delivering its first report to investors since Vince McMahon exited the company after being accused of sexual assault. It was also the first full quarter that incorporated WWE earnings. (THR)
IMAX posted its Q4 earnings, reporting that revenue fell 12% to $86 million. (The Wrap)
The battle between TikTok and Universal Music Group is heating up. The social media company has started removing music published by UMG, expanding the contractual dispute between the two companies. (Variety)
Playstation laid off about 900 employees, or 8% of its workforce. (CNBC)
Netflix is poised to raise prices for its streaming plans in 2024, Todd Spangler reports, citing reports by analysts. (Variety)

MEDIA MOVES

POLITICO created its first global audience team, hiring Zainab Khan to lead the team as managing editor for global audience and promoting Emma Krstic to director of engagement for Europe. (POLITICO)
The NYT named Dan Appenfeller Sunday editor in Washington. (NYT)
CBS News and Stations named Jamie Nguyen and Katie Krupnik as senior producers, while announcing that Maryhelen Campa will also oversee immigration. (Adweek)
The WSJ hired Bharbi Hazarika as a digital platform editor. (TBN)
Variety has promoted Rachel Seo to social media editor. (Variety)

THE INFO WARS

CNN Photo Illustration/Dia Dipasupil/Getty Images

Godwin Lays Down the Gauntlet: ABC News boss Kim Godwin sent a weekend note to a number of her staffers, which I obtained, blasting Donald Trump for recent comments he made equating the legal cases against him to the persecution of Black people. In the note, which weighed in on a larger editorial conversation, Godwin described the remarks Trump made at the Black Conservative Federation Gala as "mind blowing" and "shocking." The ABC News boss added that the comments "are as racist as they come."

🔍 Zooming in: What's quite strange about this story is that ABC News hasn't appeared to have reflected its own network chief's strong beliefs about Trump's remarks in its own coverage. A spokesperson for ABC News declined to comment when I reached out on Tuesday. But it's notable that ABC News described Trump's comments in its coverage over the last several days as widely criticized as racist — not outright racist, as Godwin candidly declared to her staff. In other words, as Semafor's Max Tani wrote, "Godwin's private comments ... are more critical than ABC News has been willing to go in its coverage of Trump thus far." Tani has more here.

IN THE BATTLEFIELD

It's not just us: Fox News host Brian Kilmeade on "Fox & Friends" referred to Steve Bannon and Matt Gaetz as "extremists" and warned Donald Trump not to listen to them. (MMFA)
Sean Hannity will interview Trump on Thursday at the U.S.-Mexico border, the right-wing channel announced Tuesday.
Lydia Polgreen echoed The NYT's Ed Wong, who requested a correction from The Atlantic over a passage written about him by Adam Rubenstein in a piece this week about the infamous Tom Cotton op-ed. A spokesperson for The Atlantic, however, told me that they believe the email in question was quoted "accurately." The Atlantic spokesperson added the "entire piece was fact-checked, as is our standard policy." (Threads)
One of the biggest stories in right-wing media over the last week is that Google's Gemini is supposedly "woke." The problems with the A.I. bot are, of course, deeper than right-wing outlets are making them out to be. But they do raise some important questions.
Megan McArdle's thoughts: "I am at a loss to explain how Google released an A.I. that blithely anathematizes half its customer base, and half the politicians who regulate the company. It calls management's basic competency into question, and raises frightening questions about how the same folks have been shaping our information environment." (WaPo)
Newsmax "deceptively" edited CNN legal analyst Norm Eisen's remarks "to claim he sided with conservatives when he actually did the opposite," Michael Luciano reports. (Mediaite)
Tucker Carlson claimed he was advised by lawyers at a "big law firm" that conducting an interview with Vladimir Putin would get him "arrested" by the U.S. government. (Mediaite)
U.K. pop star Shane Lynch accused Taylor Swift of performing Satanic rituals during concerts and hiding evil messages in lyrics. (Mail Online)
J.K. Rowling went after Sky News after the U.K. broadcaster referred to a person accused of murder as a "woman" and not a transgender woman. The Harry Potter author wrote, "I'm so sick of this shit. This is not a woman. These are #NotOurCrimes." (Variety)
Is Russia unblocking previously banned social media apps? Reuters reported that Instagram and Facebook "suddenly became available in Russia on Tuesday." (Reuters)

THE VALLEY

CNN Photo Illustration/Carlos Barria/Reuters

OpenAI Strikes Back: In a fiery legal filing made public this week, OpenAI hit back at The NYT, which is suing the ChatGPT-developer for copyright infringement, claiming the paper hacked its A.I. bot to build its legal case against the company. "The allegations in the Times's complaint do not meet its famously rigorous journalistic standards. The truth, which will come out in the course of this case, is that the Times paid someone to hack OpenAI's products," the Sam Altman-led company alleged in the filing. "It took them tens of thousands of attempts to generate the highly anomalous results that make up Exhibit J to the Complaint." The NYT, for its part, denied it engaged in any nefarious hacking. "What OpenAI bizarrely mischaracterizes as 'hacking' is simply using OpenAI's products to look for evidence that they stole and reproduced the Times's copyrighted works," a lawyer for the paper said in a statement. "And that is exactly what we found." The WSJ's Ben Glickman has more here.

TOO MANY TABS

In a stunning move, Apple announced to its employees that it is ending Project Titan, its decade-old electric car program, shifting some of its personnel to focus on A.I., Mark Gurman reports. (Bloomberg)
Peter Kafka: "Reddit is going public with a time-tested business model pioneered by the likes of Facebook and Twitter: Get people to give you content, for free, and sell ads on that content. So why is it losing so much money?" (Business Insider)
TikTok implemented a major C-suite shakeup, with Adam Presser now overseeing trust and safety and Cormac Keenan, who previously oversaw trust and safety, now taking on a strategic advisory role in the senior leadership team, Erin Woo and Kaya Yurieff report. (The Info)
Jim VandeHei and Mike Allen speculate whether generative A.I. will prove to be the savior or demise of humanity. (Axios)
Tumblr and Wordpress "are preparing to sell user data to Midjourney and OpenAI," Samantha Cole reports. (404 Media)
Mark Zuckerberg met with Japanese Prime Minister Fumio Kishida and had a "good, productive conversation about A.I. and the future of technology," he said. (Reuters)
Threads is now enjoying a daily download rate three times that of its rival, X, Sarah Perez reports. (TechCrunch)
Meta is defending its end-to-end encryption before a federal court after Nevada's attorney general filed to stop the company from offering the service to children, calling it a matter of "extreme urgency." (The Verge)

CURTAIN CALL

CNN Photo Illustration/Warner Bros. Pictures

Theaters to Ride the Sandworms: Movie theaters are set to come to life this weekend as "Dune: Part Two" hits big screens around the world. The delayed and highly anticipated sequel (yes, I have already purchased by Dolby Digital tickets for Friday evening) is tracking to post somewhere between $150-175 million at the global box office, THR's Pamela McClintock reported. And the film should have some legs in theaters, given it is boasting a stellar 97% score on Rotten Tomatoes. McClintock has more here.

OFF STAGE

Sean "Diddy" Combs is facing yet another sexual assault accusation, this time by his producer, Rodney 'Lil Rod' Jones. Diddy's lawyer called the latest accusations "pure fiction." (THR)
Chris Carter, creator of "The X-Files," has given his blessing to Ryan Coogler to reboot the series, he revealed to Sharon Knolle. (The Wrap)
Eugene Levy joined the cast of the fourth season of "Only Murders in the Building." (The Wrap)
CBS renewed "The Young and the Restless" for four more years. (The Wrap)
Amazon ordered Benito Skinner's comedy series "Overcompensating." (Variety)
John Waters will make his first film in 20 years, which is slated to star Aubrey Plaza. (The Guardian)
Michael Fassbender is in talks to star in George Clooney's spy thriller series, "The Department." (Variety)
HBO dropped the trailer for "The Lionheart." (YouTube)
Warner Bros. Pictures teased "The Watchers." (YouTube)

Thank you for reading! This newsletter was edited by Jon Passantino and produced with the assistance of Liam Reilly. Have feedback? Send us an email. You can follow us on Instagram, Threads, and LinkedIn. We will see you back in your inbox tomorrow.

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