Is New Media an Endangered Species?

AdMonsters Wrapper: The weekly ad tech news wrap up
This Week
May 22, 2023
The Death of New Media
Generative AI Regulations
Telly's Ad Supported Software
Around the Water Cooler
Is New Media an Endangered Species?
Is New Media an Endangered Species?

AdMonsters writer, Susie Stulz, has been reading Traffic, Ben Smith’s book on the start of Gawker, HuffPost, and BuzzFeed. The 2000s were heady days for “new media.” Its founders, ambitious and audacious in equal measure, figured out early on that sites that attract the most traffic win. Scorning traditional media, they invented listicles, published racy content (some of which was highly unfortunate), and figured out how to get Google to point traffic to their sites. In the process, they “dragged media into the digital age.”

New media organizations globbed onto social media, and in the early years, it delivered the traffic those owners craved. Unfortunately, that traffic didn’t always generate a profit. This past Monday, VICE Media, announced that it has filed for Chapter 11 bankruptcy. Struggling under a mountain of debt, the company will be sold to Fortress Investment Group and Soros Fund Management for $225 million. This follows on the heels of BuzzFeed shuttering its news division.

BuzzFeed may have started with listicles, but it grew into serious journalism. In 2021 the publication won a Pulitzer for reporting on China’s incarceration of hundreds of thousands of Uighurs, Kazakhs, and other Muslim minorities. VICE was founded originally to cover music, art, trends, and stories about the drug culture that other publications wouldn’t print. It’s not afraid to cover the most challenging issues facing America and the world.
Why This Matters
Although VICE Media anticipates emerging from bankruptcy, the financial troubles plaguing VICE and BuzzFeed are a worrisome trend for other media companies that revolutionized the publishing world. In its reporting, The New York Times called Disney’s investment in VICE one of the worst bets in publishing. Though it may not have turned the profits anticipated, VICE News has certainly turned out amazing content, such as in-depth videos on topics like the state of feminism in the US today.

For now, VICE Media fans won't need to worry about losing their favorite VICE brands. The press release announcing the bankruptcy stated that all of the brand's multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29, and i-D, will operate as usual. Unfortunately, we seem to have lost BuzzFeed News for good.

Feeding off the pioneering digital strategies of publishers like VICE and Buzzfeed, "old media" giants like The New York Times have managed to put together content strategies that engage consumers across a wide range of topics, making subscription sales a critical part of their revenue stream. With innovators like VICE and Buzzfeed facing existential issues with financial viability, where will the "new" in new media come from going forward?
Senate Hearing Weighs the Cost of Generative AI Regulations
Sen. Richard Blumenthal started the generative AI hearing better than any stunt queen could by playing an AI-generated audio recording of himself talking about the risks of AI and the need to regulate it.

The Infamous Recording: The clip stemmed from recordings of Blumenthal's previous floor speeches, and ChatGPT wrote the script based on how he might open a hearing on AI regulation. It's a stunt, by all means, but a well-executed one.
  • Blumenthal's AI-generated voice said, "Too often, we have seen what happens when technology outpaces regulation — the unbridled exploitation of data, the proliferation of disinformation, and the deepening of societal inequalities. We have seen how algorithmic biases can perpetuate discrimination and prejudice and how the lack of transparency can undermine public trust. This is not the future we want."
AI leaders don't deny they need regulation; sources say they are begging for it. Sam Altman, CEO of OpenAI, urges Congress to implement rules limiting the technology's dangers. Altman explicitly asks for "a new agency that licenses any effort above a certain threshold of capabilities." This will help test the risks of any AI models before deployment.

The Key Players: IBM Chief Privacy and Trust Officer Christina Montgomery and NYU professor Gary Marcus joined Altman to testify.
  • Montgomery warned legislators not to rush AI regulations. She proposed using existing agencies to take action instead of creating a new AI-focused regulator.
  • Marcus suggested safety testing the tech similarly to prescription drug testing. All three witnesses agreed that there needed to be international voices helping to regulate AI. Altman suggested the International Atomic Energy Agency as a model.
Why This Matters
The rapid advancement of AI has many industries and governments concerned. Just a few weeks ago, Top AI CEOs convened at the White House to discuss the future of AI regulation. Open AI's Sam Altman was amongst the guests.

Generative AI has swiftly infiltrated jobs and sometimes even derailed a company's business growth. For instance, Chegg's shares fell 49% due to ChatGPT. The CEO, Dan Rosensweig, realized that more students were beginning to use ChatGPT to answer questions instead of Cheggs study tools because the option is free.

Misinformation: While the students may prefer the free option, generative AI outputs are not always accurate or up-to-date. Open AI even offers a disclaimer on its website that backs this claim. It reads:
  • "All the information on this website is published in good faith and for general information purposes only. ChatGpt Connect does not guarantee this information's completeness, reliability, and accuracy."
For students, accessing misinformation most likely means you'll lose a few points on an assignment, but the spread of misinformation is a dangerous tool on a larger scale, especially when it comes to journalism. That is why regulation is a must.

The Lawmakers: The senate lawmakers asserted their list of concerns. Most of them do not contradict major industry worries, but the question remains of who are the right regulators and how the process should run. Their concerns are as follows:
  • Election misinformation and impersonation of public and private figures.
  • Job disruption and economic displacement.
  • Weaknesses in non-English languages, including Spanish.
  • Copyright and licensing problems.
  • Dangerous and harmful content.
There is already a partnership between the US and EU concerning AI regulation, but no concrete system exists for generative AI. The Senate hearing should get the ball rolling.
Telly Launches a Rebrand of Ad Supported Software
Platforms have offered free ad-supported streaming services for quite some time. For example, Spotify and YouTube allow consumers to use their media for free, with ads interspersed throughout the experience. But now, Telly is offering an ad-supported tier with a twist.

“You get a TV; You get a TV!”: Telly, launched by Pluto TV’s co-founder Ilya Pozin, decided to give away half a million 55-inch 4K televisions. The caveat is that recipients must install a separate second display underneath that constantly showcases ads and other information.
  • The second display sits directly underneath the main screen and the soundbar. The display can show stock quotes or sports scores in addition to the mandatory ads.
  • The company also requires consumers to take a survey when they sign up to implement the targeted advertising, allowing them to collect some form of consumer data.
The practice of using ads to subsidize tech is not new. Brands have used this method with cell phones and computers, but they were discounted and not free.

The fine print on the device is expansive, and the terms of the deal are subject to change at any time — if the practice is unsuccessful, for example.
Why This Matters
The CTV and OTT space has changed drastically over the last couple of years as streaming has overtaken the popularity of cable. The transition also changed the advertising practices of television.

For a long time, many streaming services stayed away from ad-tiered options. Netflix notoriously said they would never offer ad-tiered subscriptions, and we all know that statement didn’t age well. Of course, this is no shade to the streaming giant. It shows that all platforms want to balance revenue, audience targeting, and privacy concerns.

CTV has become a lucrative market, but privacy concerns are also vast. IAB even created Project Crosswalk to address some of these concerns. What are the problems?
  • There are UX worries because there is no seamless way for consumers to find the privacy policies with the remote control. Most have to leave the CTV device to see the privacy policy, which is not the recommended practice.
  • Identifying consumers concerning privacy compliance is difficult, especially in a space that is so fragmented.
Can the display screen under the Telly TV help with these concerns? Some user experience hacks can work. For example, the ads do not mess up the television-watching experience because the ads display below your screen. TV content can come via any traditional cable or satellite TV provider or streaming device, such as Fire TV Stick or Roku. In addition, since the display can show sports stats and stocks, it might also display privacy policies.

Privacy concerns: Journalist Shoshana Wodisnky raised some privacy concerns about Telly TV. According to its privacy policy, the tech collects data about what you view, where you’re located, what you watch, and what could be inferred about you from that information. Meanwhile, their child data collection standards raised eyebrows:
  • If we learn we have collected Personal Data from a child under 13, we will delete that information as quickly as possible. (I don’t know if this is accurate. Do we have to say we will delete the information, or is there another way around this)? If you believe a child under 13 may have provided Personal Data to us, please contact us at ....”
After critics called them out, they deleted the problematic part of the privacy statement, but Telly TV gave no response.

Like all new tech, new kinks aren’t a surprise, but this is a pretty big red flag to miss. Also, some Telly owners may have concerns if the Telly devices are ACR-capable, which helps advertisers measure viewership and performance, as well as personalize content recommendations but also gives off the creep factor to some users.

Telly TV is an interesting concept. Will it solve the bulk of CTV concerns? Probably not. But it shows that the industry is looking for solutions.
Around the Water Cooler
Google Forces EU Publishers to Work with Consent Vendors If Google is going to do one thing, it will show its dominance. They issued a new privacy policy that requires European-based publishers that utilize its monetization tools to work with consent management platforms that comply with their privacy policies. (Digiday)

YouTube Updates Their Data Clean Room Data Clean Rooms are a prominent solution many think will help publishers post third-party cookie deprecation. Youtube announced the addition of VideoAmp to its Data Clean Room, allowing advertisers to use its dataset in a unified platform, incorporating YouTube across connected TV, desktop, mobile, and linear TV. (Ad Age)

Meta Warns Australia’s Ad Targeting Policies Could Prove Dire Australia’s federal government plans to allow consumers to opt out of all targeted advertising under their new privacy reforms. Meta warns that this will cause increased subscription fees. (The Guardian)
Sweet Tweet
Massive Meta #GDPR Fine for Flow of Data Across Borders
Meta/Facebook was fined a record #GDPR EUR 1.2 BILLION for violating European privacy rules. The company has now been given a DEADLINE to stop the transfer of user data to the United States. This (if nothing changes) means SHUTDOWN OF Facebook in Europe.
Worth a Listen
Bow Down Before the Ad Tech God
In this episode, Eric and Ari are joined by Ad Tech God to discuss Twitter's new CEO, Netflix at the upfronts, and Luma's DMS conference.
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