13. Coronavirus edition with Sara Fischer (Axios) and John Saroff (Chartbeat)

I really need a haircut right now. It's time to geek out. Hello and welcome to Geek Out with Matt Navarra. I am Matt Navarra.

And I'm Martin SFP Bryant. Yes, we're back for some special episodes looking at how the wild, scary world we suddenly find ourselves in is affecting all the stuff we love to geek out over.

Yes, and in future shows we'll be talking to social media managers, marketing experts, and many other people as well. But this time, let's find out how news publishers are affected by this pandemic.

To do that, we're going to be joined by Sarah Fisher, media reporter at Axios, and our first ever returning guest, John Saroff, CEO of Chartbeat, is going to be able to tell us exactly what kind of content is working for digital publishers and how the pandemic has affected the public's appetite for news.

And don't forget, you can always get in touch with us on Twitter where you can find me as @MattNavarra.

And I'm @martinsfp. So Matt, normally I ask you, how are you? And what have you been doing? And it's some normal stuff. I assume pretty abnormal stuff you've been up to over the last few weeks.

What the fuck is going on? What the hell has happened? Like, in the space of like 2 weeks, the world has turned on its head. It's like it's just gone mental. It has been crazy. Yes. For everybody. And before I would preface anything I say here that I don't have it as bad as probably a lot other people. However, my personal situation is has also been tricky because yeah, the, you know, the impact on my business and same as other freelancers and things has been dramatic. But nonetheless, you know, things are getting better and I have seen people with some horrific situations. So, you know, I'm fortunate in that respect, but I've been watching on really with fascination, watching, you know, brands and news publishers and social media managers and seeing how they're dealing with it. That's kind of fascinating to see how they respond and how they get into their role with this kind of weird new world we're in. And I did something controversial. I think, um, I don't know if anyone thinks this is bad or not. I bought a Portal+. I wasn't given it. I wasn't gifted it. Uh, I actively decided I needed one and I wanted one. And it was around the time when there was lots of people, uh, this is like a week ago, um, when it was a bit of a bubbling up of people saying how they thought portals were good and okay.

And, uh, this is a Facebook portal for anyone.

Yes.

The Facebook portal. This is the Facebook portal that the world pretty much said Yeah, like Facebook are going to get people to accept having a camera in their living rooms and it was slated and I'd never played with one. And I think I made the same comments as everybody else that, you know, I think the device is probably perfectly decent, but how are they going to get people to, you know, take it on and have it in their room is another thing. But I hope that he won't mind me saying, but I did DM Boz, who was involved heavily with the creation of Portal+ and has been on this show and said to him that I'd been out and bought one. And he smiled because we had had an exchange before where I did mock Portal+. So he had, he had the the last laugh, but they are amazing. So if you haven't got one, you should get one.

But everyone seems to have suddenly accepted Portal as something that sounds pretty good to them, because suddenly everyone wants to get in touch with their relatives. I think it was BuzzFeed a couple of weeks ago had an article which was saying something like, everything's so messed up in the world, you might as well buy a Portal. In fact, the original title for that article was something like, eff it, just buy a portal.

I think I saw that on SEO somewhere and it kind of then changed. But no, I agree. It's a good device and people have come round and well played, I think. But Martin, what about you? What's been going on with you?

Well, for me, it's been fascinating to see the world suddenly adjust to working from home because, well, both of us, we've worked from home for a long time, haven't we? And we used to contribute quite a lot to a big digital news outlet from our respective houses in the UK, working with an international team. And, you know, I base managing the international editorial team from my sofa in Manchester. And so I knew full well how much you could get done at home. So it's been pretty interesting to see the light turn on for lots of people. I was on a call with a bunch of lawyers actually the other day, and they were, you know, obviously lawyers, tend to be quite traditional industry law, and they very much used to doing everything in person. They were just getting that light clicking in their heads about just how much they could get done remotely from home and how efficient it to actually, rather than travel off to meetings and do all the cups of tea and all of that, you can just quickly log onto a meeting, do it all, and then you're done. And so it's been really fascinating to see, and I hope some of this sticks after finally we go back to some kind of normality sometime in the future.

I, well, I, I, all I want to know is, have you been doing any Zoom bombing? I think that's the sort of thing that I can imagine you involved in there. Is that not you?

Well, I am an elite hacker. No, no, I've been doing no Zoom bombing at all. I have been telling people to put passwords words on their Zoom meeting, so to make sure that they are protected from Zoom bombing.

Oh, well, I, um, I think we should probably jump into the interview. What I should say before we chat to our special guest today is that there is a background here as to why this has got a slightly news publisher-y side to it, because as we were saying a moment ago, me and Martin worked closely together at The Next Web, and, uh, and being involved in this area of kind of the, the battle between the news publisher and Facebook and all of those things that went on years ago is very much something I lived and breathed. So, uh, it's going to have a bit of news publishing but a lot of social media as well. So Our first guest this week is Sarah Fisher from Axios, and she is someone I've followed for ages on social media. I had the opportunity to meet her once at South By, and now she's kindly agreed to come and spend some time with us and chat geeky stuff on the podcast. So welcome, Sarah.

Thank you so much. It's great to be here.

Could you just tell everyone a little bit of a potted history about you for those that don't know you, which I can't believe will be many people?

Sure thing. I have worked in media for the past decade for different companies, both on the business side in sales and strategy and operations, as well was on the editorial side in editorial production, writing, and now I'm a reporter. The company I work for is called Axios. We are a new digital media company that launched 3 years ago to cover the intersection of media, politics, business, technology, science, you name it. And I'm excited to be here today because covering social media, covering news, and covering the media industry is a large part of what I do day in and day out.

That's great stuff. I really enjoy some of the things you put out. It's amazing. So, John is our other guest. Now, for those of us who've been listening to the podcast for some time, John is our first returning guest. John Sarafra, CEO of Chartbeat, welcome back.

Thanks, guys. Sarah, it's an honor to be— I read your newsletter every day. It's an honor to be on with you. And I'm the CEO of Chartbeat. And we measure traffic for over 700 enterprise publishers. We track about 50 billion page views a month. And excited to talk about this unprecedented and very scary thing that is COVID-19 and coronavirus. And happy to be on the show today.

Oh, it's great to have you here. And so we wanted to just sort of open up with a really just a broad discussion of the fact that, at the moment, this is uncharted territory for many industries. And prior to the coronavirus becoming a big thing, as it is at the moment, the news industry was already kind of up and down with different challenges it was facing regarding how it generated money and how it brought in new audiences and all manner of other things. I just want to maybe start with you, Sarah, kind of how do you feel the news publishers and the news industry is dealing with the situation? How are they coping, do you think?

I think overall they're doing a great job by prioritizing the health and safety of its constituents. They know that they need to be walking a fine line between educating people but not inducing panic. But I think from a business perspective, you have another story, which is while the news industry's done an excellent job covering this, I think they're struggling to stay afloat, a lot of these industry businesses, due to the lack of advertising revenue coming in. We know, especially for local news, that when businesses are forced to shut down, they're not going to be able to buy advertising in their local papers. And that's especially true for some of their biggest advertisers, which are local automobile dealerships, local restaurants, et cetera. And then even at the national level, we're seeing major layoffs, furloughs. We're seeing major national newspapers cut down on print editions. Again, that is a response to a lack of advertising revenue right now that's just sort of eating at the entire ecosystem.

John, Chartbeat has recently produced this really interesting insight report around what's been happening with traffic and engagement for some of the biggest publishers in the world that Chartbeat has clients of. Could you just just tell us a little bit about that report and how that feeds into what we're talking about here and how they're performing and how they're doing and how they're changing things to make it work for them.

Yeah, I think Sarah hit the nail on the head in both situations. I think what we've seen is our clients, specifically our clients who focus primarily on news, are just covering coronavirus with unprecedented effort. On average, we're seeing about 86,000 coronavirus articles a day. It's about a third of all of the traffic to our clients. Just that one topic is a third of all the traffic. And users are really, really consuming it. Users are engaging with coronavirus content much more than they are engaging with other content in terms of time spent. It's specifically what we call engage time, which is the amount of time that a user actively consumes an article. And not only in this time, but if you compare coronavirus coverage to kind of everyday coverage, right, let's say the impeachment or the British election, right, the coronavirus content is even more engaging. So I think even though the advertising challenges are very, very real, the newsrooms are doing an extraordinary job of getting the public the information that the public needs to make decisions to protect themselves and their families.

Yeah, I totally agree. And I think that one of the things that I found quite interesting with things in the last few weeks is that most of the Silicon Valley big tech companies, the social companies like Googles and Facebooks and Twitters and things, they're throwing out quite sizable sums of money, maybe not in terms of their global revenue and things, but until $6.5 million from Google for fact-checking initiatives, Facebook with its $100 million for small businesses in the news industry. Twitter's also put out about $1 million for different things, and as well as Netflix even, $100 million for out-of-work creatives. Sarah, you know, what do you make of these, like, sums of money? You know, what's behind— is there another motive to it, or do you think it's just them doing the right thing? Or, you know, what's that all about, do you think?

Yeah, I think this is a breakthrough moment for business, especially technology, in order to salvage their reputations. We know that prior to the coronavirus pandemic, big tech was one of the biggest targets for regulators, not just here in the United States, but of course in the UK and around the world. And they see this as an opportunity to leverage what they have to give back to the community. So what do they have? For the most part, they have good balance sheets. These companies, while they're going to take major hits in advertising revenue, you hear some analysts say that Facebook and Google combined will lose up to $40 billion this year, they still have really strong balance sheets, which means that they do have the ability to contribute and bring, give back to the community through millions of dollars of grants and donations. The other thing that they have is technology that's gonna bring the world together at this critical time. And I think For the past few years, these companies have gotten a lot of heat for ways that their technology can be abused, as opposed to ways that their technology can be celebrated to make the world better. Coronavirus is, in a way, a blessing for them because it shows to regulators and to the public that these big technologies that they've invested so much in abate some issues with bad actors, are gonna bring the world together. I think that I think that this is part of a very smart and strategic effort to help bolster their reputations long-term, long after the pandemic. And I also think that they're very targeted in who they're going after with these funds. You notice that they're focusing a lot on small business. Well, that's because small businesses make up about 70% of their ad revenue in buying it in a self-serve fashion. Small businesses don't have the money to survive. They're not gonna buy ad revenue, not just now during the pandemic, but long-term after it's over. Reason selfishly as well why these companies are targeting small business. They're targeting news with donations reputationally, of course, because it matters, but also because they know that people will spend time on their platforms if they have news to provide them with there. That's what people are consuming. And so that's why you see them trying to help out the news industry. It does in fact benefit them as well.

I just, I just wanted to jump on, on that last point, cuz I think Sarah really touched on something. Essential, which can frequently get missed, I think Google, Facebook, and Twitter need healthy news organizations for their products. Someone once told me off the record that 1 out of every 3, 4, or 5 searches on a search engine is for news. So having a healthy news ecosystem encourages search. It encourages social behavior on things like Facebook and Twitter. So even though those things don't make up that much revenue, it's not It's not like people advertise against coronavirus or advertise against news terms. They do make those products better. News makes Google, Facebook, and Twitter better. And I think in addition to the grants being great PR and great ways to fight off regulators, which they certainly are, news is really important to all of these platforms, probably more than they publicly say.

Yeah, and we've seen this strategy by Facebook and others reflected in the media coverage, definitely. In the last few weeks, we've seen a lot more, oh, maybe Facebook's okay to like now kind of articles coming out, and maybe it's okay to get a Facebook portal, maybe it isn't totally evil, and which is a total kind of pendulum swing from where we were, say, 6 months ago or even 3 months ago. And so it certainly seems that the media is following this attempt at a new narrative from the big tech companies. But do you think that maybe there's a bit of a problem that we're just swinging to, oh, they're all good now, it's great, rather than they're complicated businesses with lots of different things going on, and sometimes they're good, sometimes they're bad.

I don't know.

Do you think we suffer from these simplified narratives?

I would not say that the narrative is— I would challenge the point. I mean, I think there's nothing about this that is simple. I think that these grants show the very, very bizarre, almost symbiotic relationship that the news ecosystem now has on the platforms. And I think, in times of crisis, you see how places like Google, Facebook, and Twitter are very helpful. I mean, Walt Mossberg, the legendary Wall Street Journal and now Recode reporter, is now back on Facebook, right? The guy who was the biggest critic of Facebook forever. And he made this very public declaration, which is, now that I'm stuck in my house, it's the only way for me to catch up with my friends friends. And I think it's that kind of symbiosis, which is that we have allowed Google, Facebook, and Twitter— less so Twitter, but Google and Facebook— to have such a large presence in the way we get news. And that comes out in times of crisis. And that's very, very complicated, because when you have really two massive companies in control of how we get critical information, I think that's much more technical. Much more nuanced. And we will benefit from it now. But when things get calm— and they will get calm again— I think it's our responsibility to revisit this crazy time and say, was this really the best thing for us as a society? Or do we need to go to Brussels, and to Washington, and to London, and argue that we need a more diverse ecosystem?

Do you think, Sarah, that Facebook has got a chance for some sort of level of redemption here, or an ability to kind of repair some of the kind of damage it may have suffered in terms of the media spotlight and regulatory spotlight? Or do you think this is just irrelevant at the moment and this is just an unusual time?

No, I think that there's definitely a benefit. I think that this is going to force us in the media and regulators to think more clinically about how we typecast these companies. To your point, we had been saying for the past few years, you know, these companies need to get their act together. We had been highly focused on pressuring them to be better prepared to handle bad actors, whether that's misinformation, people selling fake goods, et cetera. But I do think coming out of the pandemic, this will force us to better understand and cover these companies with more nuance as to the delicate balance that they have to play in order to spur innovation to make our lives possible in a remote era like this, uh, as well as protect the people and their platforms from bad actors. So my hope is that coming out of this pandemic, we're all just going to have a little bit more of a nuanced perspective when we're writing about these companies. And I think that's good, and I think that's healthy.

Yeah, and obviously these grants and this support and everything from the big tech companies for media companies, that's not going to last forever. And we have to accept though that after this all calms down— and as you say, Johnny, it will calm down— but we'll still be facing a pretty huge economic depression of some kind. We don't know exactly how large, but that's, that's going to impact on media companies quite a bit in the longer term, isn't it, Sarah?

It's going to have a huge impact. For one, I think a lot of media companies are not going to come out on this on the other end. So you're going to see some media companies shut down entirely, cease print operations, lay off all their staff. Maybe they're able to find people who can help fund them to get them back up and running, but a lot, especially at the local level, won't. The other thing that you're going to see that has a huge impact on media is that media is not an industry that has stockpiles of cash because it's really, even in the for-profit companies, It's not built out of financial principles most of the time. Even these for-profit businesses, their core principle is delivering great journalism, which means that they don't have balance sheets with very wide free cash flow. And I think that in order for them to come out on this okay, they're still going to make major impacts on their staff. They're still going to see big layoffs at major companies. You're still going to see critical products being cut. I'll give you a few examples.— you know, the Tampa Bay Times, which serves a huge portion of Florida, one of the most densely populated states in the country, has already announced layoffs. It's already said it was going to consolidate when it would be printing. I mean, these are going to be very steep losses for the Times to come back from, on top of the fact that they've already been struggling. You know, they laid off 50 people earlier last year in response to newspaper tariffs. And so I, I do think this will have a major impact long-term on both national media and local media. And I think the thing that we need to focus on right now as people who are reporting about the news media is making sure that people know the role and how critical it is that their news companies play so that after the pandemic we can rally broad-based support for financially getting these companies up and running after the crisis. I don't want people to think, oh, well, now that the crisis is over, we don't need the news media as much. In fact, that's the opposite way of thinking. We need the news media to be very supportive and very active because it helps us better prepare for crises like this.

John, I'll come to you with this question first as you're the analytics guy, but maybe Sarah has some thoughts as well. Are you seeing any differences in the way that social media is being used? So how people are using it in terms of apps, platforms, the way that the public, their social behavior has changed as a result of all this craziness?

Yeah, I mean, a couple of things. I think what we tend to see in almost every country is that as this becomes more and more real, right, so as shutdowns happen, as people get confined to their homes, search is the primary source of traffic for the beginning, right? People are consuming, consuming, consuming, consuming information. Then as the lockdowns happen, people go to more social media to communicate with their friends, check in with their friends, et cetera. I would say one thing which is probably normal for the four of us, but it's a little bit unusual for the data, is that Twitter actually has become much more important in the last couple of weeks. Typically, Twitter hovers significantly behind Facebook, Google Search, and even things like Google News and what we call Google Chrome Suggestions. But Twitter is actually— it's up about double in terms of the amount of traffic that it sends to publishers. And I think that's because that's where newsmakers are, right? I think newsmakers and newsbreakers are on Twitter. Users are going to Twitter in a way that is a little bit unique for the everyday.

There's some platforms that are going to come out of this maybe potentially in a stronger position than other platforms, social media platforms and networks that maybe not so much. And so are you making any observations in your own opinion that there are certain platforms platforms at the moment that are really making some big steps forwards because of this unexpected world crisis, or ones that maybe you're thinking, wow, they're really not taking a hold of this and doing something which could be really good for them as a business? You know, what are your thoughts on that?

Well, I think most social media platforms are seeing increases in engagement. I think, as I said earlier, the big platforms, you know, primarily Facebook, are struggling because the ad revenue hit is going to be larger for them because they are larger. They're going to take on the brunt of the losses. In terms of engagement, there's been some discussion question about certain platforms are developed and created for people in transit. And because we are not really in transit, are we going to see those platforms receive less traffic? So, you know, I've talked anecdotally, for example, to podcast makers, podcast apps. A lot of them say they're doing great. However, Podtrack, which is an analytics company that measures podcast listenership, has put out some stats that podcast listenership has gone down Anecdotally, I've seen evidence that actually disputes that, but I can see why that might be the case. If people aren't driving for an hour to and from work, if they're not riding the metro for an hour to and from work, then obviously they might not be listening as much. Other platforms that I think might, you know, we'll see how they launch. I'm looking at Quibi. They're supposed to be a short-form video platform. Videos are anywhere between like 2 to 5 minutes that is catered really to people that are in transit, people that are, you know, at a stoplight and wanna watch something for 30 seconds or people that are on the Metro. And I'm curious to see how this will impact the launch of something like that, which is not catered to television, sitting on your couch in the living room viewership. Lastly, to your question about social media pure play platforms, I think one of the things that's super interesting is the platforms that are highly catered to bringing together close friends like Snapchat are going to really benefit from this. I think during this pandemic, people are going to wanna share intimate moments between family and friends. They're not going to want to broadcast out to their entire networks necessarily everything that they're doing in their home. You know, I think about a platform like Instagram, which of course is doing well during this virus, particularly Instagram TV. We heard from a lot of marketers that they're leveraging Instagram TV as a place for brand ads. But I think, you know, people aren't going outside, they're not taking Insta-worthy pictures. And so I wonder if engagement in the feed has gone down a little bit because people can't be posing next to their favorite statue to, or their favorite landmark.

Sarah, obviously you work for Axios, who is famous for its newsletters. How are newsletters faring in these changed times in terms of user behavior?

Our newsletters— I can only speak on behalf of Axios— our newsletters are doing excellent. I think people want to receive more information about the virus. And I also think that we have a heavily weighted audience towards B2B, so business professionals. And I think across every sector, business professionals want to know how this virus is impacting their industry. For example, even though live sports have been canceled, our sports reporter Kendall Baker has done an excellent job of explaining what the business impacts are going to be for the sector and how the industry should be thinking about managing the pandemic. He's been writing a lot about where brand advertising goes after it leaves the NBA. He's been writing a lot about which types of sports are apt to remain because they don't require a lot of physical contact. You know, for example, something like archery. So there have been a lot of great reports that have come out of our newsletters that I think are getting good engagement. I think overall newsletters provide news and news consumption is up. And so that's a medium that's going to continue to do very well. I think people are going to subscribe and continue to subscribe to more pop-up newsletters. This was a trend that we saw during impeachment where you had a spike in impeachment-only traffic. News companies were trying to take advantage of that by creating newsletters solely on that one topic. The same thing has happened with coronavirus. You see see tons of media companies from BuzzFeed to the New York Times creating coronavirus-specific newsletters, podcasts, video series. I think that trend will only continue, and I actually think we'll look back at the coronavirus pandemic and say that's when newsrooms really started to take advantage of pop-up products.

Yeah, I, I subscribe to a couple of those, um, coronavirus-specific newsletters, and I subscribe to them but I don't read them because I open them and it's just a string of depressing stories that I can read anywhere. So, uh, yeah, I do wonder on value sometimes, but I'm not everyone, am I?

Yeah. One of the things that I wanted to pick up on a bit more as well, which we did sort of touch on, was like the impact of all of this and the scale of the impact on publishers in terms of the stories that are going around about programmatic advertising and the blacklisting of words by advertisers so that there's, you know, the fill of ads for publishers is really just dropped off a cliff sort of thing. I don't know if Sarah or— and you want to kind of tell us a little bit about what's going on there. And John, if you've heard anything from publishers how they're reacting to that, really.

Yeah. I mean, I think there's a couple things going on. I think, first of all, there's a lot more blacklisting even in normal times than I think folks realize. I mean, I was once speaking to somebody who places ads on behalf of a major American bank. And they won't advertise against a whole slew of political keywords. So this is a problem that I think coronavirus is bringing to the fore because so much news is about coronavirus. But I actually think it's quite ironic that a lot of Britain and the US's biggest advertisers will very happily advertise on places like Facebook where they can't control the content, but won't advertise on mainstream publishers. If you're keeping your ads on Facebook right now, you're obviously getting coronavirus coverage because people are posting about coronavirus. But if you put that same ad— you can block that same ad going against news, and some of that just doesn't seem right to me. You know, in terms of the fill rates, I think Sarah, you might have a better sense of that. I've got some anecdotes, but you maybe have talked to some folks in the field.

Yeah, I've talked to a lot of folks in the field about this. One of the challenges is that when it comes to placing ads, agencies are really overwhelmed right now. The platforms have had to lay off, or not necessarily lay off, but they've had to reduce staffing on in-person human moderation of content, which means that they are relying a lot more heavily on people, on machine learning to filter through content. And because of that, their filters are just not as nuanced anymore. So when you're an ad buyer and you're trying to buy things around news content or COVID content, automatically you feel as though it's hard to get things through. And so as a result, ad buyers who are in a tricky situation are just trying to avoid anything that's hard news because they at this point don't think it's going to get through in the first place. So that's one of the biggest challenges is like the agency is kind of stuck because the platforms are stuck. They can't have people monitoring content in person. They're relying over-indexing on machines, which is over-filtering out content. You saw announcements this week. We broke the news about Google, Twitter then made an announcement on Friday that they're actually going to start allowing advertisers advertising around COVID-related content, their policies were so stringent in part because they didn't want people to take advantage of this situation, like people buying ads or face masks that were inflated on prices. So now they're starting to relax those rules. In terms of news publishers, I think that you also have this situation where a lot of the direct deals between publishers and advertisers happen in person. I mean, they happen over dinners, they happen over breakfasts where the ad buyer from the agency meets with the publisher and says, what new products do you have going on, et cetera.. And I think we're in this moment where a lot of people are confused about what's available. A lot of people don't have as great of a sensor on what they're able to buy out on news publisher sides. So they're going through their third-party ad networks. A lot of stuff they're afraid because they don't check it out in that in-person direct conversation is going to be bad news. And so it's just easier for them to skip over it altogether. I think it's a byproduct of an industry that's being upended right now in a bad way.

Yeah, and I think, I think the third-party ad network point is a good one. I mean, you're having— for folks who are really dependent on third parties, um, you know, there's kind of a perfect storm where, um, you know, most of these third-party programmatic platforms work on auction, um, and, you know, whether it's a first-price auction, a second-price auction, uh, you know, a Dutch auction, um, it's still an auction. And there's a tremendous amount of supply because users are consuming more content than ever, and there's a reduction in demand. So that makes the auction depressed. And I think, as users, we can probably see that because I think Sarah made her point about the face masks. On some of the most reputable publishers in the world, you're seeing programmatic advertising delivered for face masks from companies you've never heard of. And I think that's because of this problem in the auction where supply is way way up and demand is way down. And that's going to hurt the industry as a whole, but it's predominantly going to hurt folks who are really dependent on programmatic.

So pulling all this all together and coming to a head on this really, what platforms or which news publishers and journalists and people that set up to report on all this stuff, who are best placed? Who's going to be the ones that are going to last the distance and survive this situation? What do they have to have in place to be able to sustain through this tricky period? And then second part to the question, really around what's the legacy for some of these publishers, and what's going to happen? What's the next thing that's going to happen after this? What do we expect to see on the other side, both for the publishers and for some of these social platforms? Any predictions we have?

I think Axios is set up extraordinarily well to take advantage of this. I'm half joking, but I actually think that— besides flattering Sarah, I think that folks who have developed direct relationships with their readers, their advertisers, and their subscribers are going to do very, very well. And I think you see that both in small folks like direct-to-consumer newsletters, folks like Axios who are emerging, who actually have relationships where they don't have to meet for coffee with advertisers to get a deal because they've been working with them for so long. And then folks, I hate to say it, but The New York Times and The Washington Post, right? There is a subscription boomlet going on. And I think it's that direct relationship. I think the folks who are really, really going to be in trouble are the folks who don't have that kind of relationship with their readers anymore. And unfortunately, to Sarah's balance sheet point, unfortunately, a lot of those folks also have huge debt overhangs. Gannett, when they did their merger last year, they've got some multiple billion dollars of debt. And this is happening at the worst possible time, because they have weak balance sheets. They don't have a go-forward strategy that matches the times. And I think Sarah's right. You're going to see folks really, really struggle to come out of it.

What do you think, Sarah? Would you concur on that point, or would you see it slightly differently?

I do concur on that point. I think the balance sheet thing is one that I can't stress enough, especially if you're a company that's contingent upon going back to lenders year over year to borrow money in order to fund content production. You know, we might see a moment where it's going to be a lot harder to borrow money because of the financial situation that we're in now. The company that borrows money the most, I'd say ironically, might be in a good situation here, which is Netflix. Netflix usually about twice a goes to lenders, borrows money to foot content production to spur subscription growth. And normally that means that their debt has become very highly leveraged, which means that their debt is a lot higher in a ratio percentage than the EBITDA, the earnings that they bring in before adjusted revenue. The ironic thing here though is because so many of these companies have had to halt production, their actual free cash flow is going to look better because instead of spending $17 billion on content, they might only end up spending $5 billion on content this year. But that got a little in the weeds. I think that the companies with good balance sheets that weren't highly leveraged, that had diversified businesses are going to do well. On the big media side, you have companies like Comcast, which thank God the Olympics was just moved a year and not totally canceled. We have companies like Comcast who even if their media networks start to take a hit due to lost advertising revenue, their broadband businesses are going to go way up. People need internet more than ever, and they've said that their networks are experiencing high traffic. They will do just fine. I take a look at companies like AT&T, similar deals. People are going to need access to their wireless phone more than ever. Those companies will do just fine. The companies that I'm really worried about are small digital-first publishers or small newspaper, local publishers. Publishers who don't have very diversified revenue strategies as is. They over-index on being reliant on advertising and not relying on those consumer relationships, as John had mentioned. Those are the companies I worry about. And by the way, that's the companies where you're seeing things start to get dicey. You know, Bustle announced 2 dozen, uh, jobs lost yesterday, including the shutdown of a publication they just bought, The Outline. You're seeing layoffs happen at many of these digital-first organizations, and I expect those, because those publishers tend to be very heavily reliant on digital ad revenue, I expect those companies to come out a little bit weaker after this crisis.

So the legacy of all this, one legacy at least, might be a slightly smaller and less rich media landscape.

I think that's probably right. I think you're going to see some people take advantage of this and grow opportunity, but I think overwhelmingly they will be overshadowed by those that experience hardships. And so yeah, I think the news industry comes out of this slightly smaller bruise, but hopefully it can be a wake-up call to society that we need to create a better system for the societal sort of support for news, I think, especially at the local level. And so I'm optimistic that we'll figure something out.

Yeah, I agree wholeheartedly. I have a slightly, if I was gonna make one kind of contrarian prediction, And you all can hold me to it. The UK listeners are very familiar with the concept of Phoenix Clubs in football, which is that no matter how many times a club goes bankrupt, it always gets rescued. I think most recently places near you, Martin, right? Bury Football Club still exists. I actually wonder if the need for local news will be seen as so great that even if these big conglomerates that are heavily reliant on debt, folks like Gannett and McClatchy went bankrupt earlier this year, I actually wonder if the individual papers may find phoenixes to rise them up. You could imagine a world where there was a very, very different Gannett or a very different McClatchy, but the Arizona Republic rose like a phoenix under new local ownership or had a particularly wealthy person who just wanted to own a newspaper, much in the same way that a lot of football clubs in England. When a club in England goes bankrupt, maybe it it gets knocked down a couple of divisions, but it rises again. And that's my hope. My hope is that once the debt is cleared off, coronavirus will reveal the importance of local, and that some of these titles which we are worried— that I currently fear may disappear may actually be able to rise under much more rational leadership.

Well, I think I would agree with all of what you're saying there. But I do want to make sure that we end on a slightly more balanced note. Fancy happier notes. And one company that comes to mind that we haven't mentioned in this last half an hour is TikTok. Um, so TikTok has been the go-to place for me for salvation right now, seeing all sorts of insane, crazy, weird, and wonderful things. My, my daughter's still trying desperately to kind of make me get involved in her creation of TikToks. But on a more serious kind of businessy level, you know, clearly I would expect their numbers to be going through the roof in terms of kind of usage, but, uh, but their ad product service, whatever you want to call it, is still in its relative infancy. In terms of self-service and the other elements of it. I just wondered, Sarah, what your thoughts are around how TikTok is doing in this experience right now.

I think it's going to be hugely beneficial to TikTok for the biggest reason being TikTok is a platform for talent. It's really a platform for people to showcase what they can do, whether that's silly dances or songs. And I think that a lot of people were hesitant about getting highly involved in TikTok because they themselves didn't want to showcase talent. And I think being stuck at home with families, people are starting to experiment a little more, which is great for the platform. I think it's going to— the coronavirus is going to elevate TikTok from being something that only certain people think they can participate in to now most people think they can participate in because they're bored at home and this is the thing to do. So I do think that they're going to come out really strong at the other end of this. And I, I also think, quite frankly, that when you take a look around at some of the other platforms that TikTok might be competing with for share of time and voice. There's no one that has and offers the same kind of value proposition. I think Instagram Stories might be this— the next best, uh, equivalent there. But otherwise, people don't use Snapchat to showcase like their talent. They just use Snapchat to talk to their good and close friends. Obviously, people don't use TikTok— Twitter to necessarily showcase talent. They use Twitter to showcase news and information and opinion. And YouTube, which is really the dominant place before TikTok for showcasing talent. We're seeing the use cases change. YouTube has become a place for deep explainers, thinking about cooking shows, just because the format really is long, longer form video. Uh, it's not necessarily as much the place for talent. And so I think TikTok will rise out of this as the talent platform, and it will benefit them a lot.

And John, are you making any TikToks yet?

Uh, I am not making TikToks. Uh, I leave that to— my stepdaughter, Nina, who she and her friends are doing all sorts of things on things that I've never even heard of. That's the plight of the 16-year-old in coronavirus. But I do think that you're seeing all the professional creators have reached out on things like Patreon and Substack. I have a few bands that I love, and they're doing patron-only shows and things like that. And, that's been really, really wonderful, right? I mean, we, as humans, still need creativity to kind of lift us up in these times. And, it's amazing the power of the connectivity to make people smile and dance, right? I mean, we bought an Xbox this week and we've got my 4-year-old and my 16-year-old doing Just Dance 2020 competitions against each other. There is humor and love to be found in this time of coronavirus.

Absolutely. And I've had spending hours in TikTok. I try not to go on and use it because as soon as I step in there, I kind of lose 3 hours of my life, just kind of disappear into a list of all sorts of wonderful things that are in there. It's been really great fun chatting to both of you. I could chat to another 20, 40 minutes, and I'm sure we'd find things to discuss. But thank you so much. And could you just tell everyone a little bit about where they can find you online or any cool things that you're doing you'd like to tell people about that That would be great.

I'm Sarah Fischer. You can find me online. My Twitter handle is @SarahFischer. You can also— and that's spelled S-A-R-A-F-I-S-C-H-E-R. You can also sign up for my weekly media newsletter on axios.com. It's just signup.axios.com.

It's awesome. You should do that. And John?

Yes, I am @Saroff, S-A-R-O-F-F underscore NYC, @SaroffNYC. These days, I'm in an apartment on 77th Street across the street from Lenox Hill Hospital. And probably the most uplifting thing that I see every day is at 7 o'clock, all the residents of my neighborhood stand at their windows and cheer the doctors, nurses, and healthcare workers. And, you know, it's a really, really incredible time. And, you know, make sure that you're taking care of yourselves and your families during this special time, because it's something that will be in the history books.

It will be. And I think we can all get behind the healthcare workers all around the world. I've seen some amazing things that they're doing. And long may that continue, because they're keeping everybody as healthy and as well as they can possibly do. So thank you so much for being with us. That's John and Sarah. Thank you very much.

Thank you.

Thank you.

Well, Matt, in these special episodes, we're not doing the quick hits section. So you're spared my terrible puns and song lyrics. So I suppose there's at least one positive thing to come out of this whole horrible situation.

I knew there'd be a silver lining. I just knew it. And this is it. It's the perfect thing. Thank you so much.

Anyway.

Yeah, in our next special episode, we'll be looking at how the coronavirus pandemic is affecting the world of social media managers for brands.

Yes, indeed. And if you know any awesome social media managers working for some of the bigger brands and you think they should be here chatting to us and they've got some interesting stories to tell, or maybe yourself think that you've got something that'd be interesting to, to talk about, then by all means drop me a message on Twitter. Uh, I'm really interested to hear what your suggestions are. Um, make sure you hit subscribe in the podcast app of your choice so you're notified as soon as the next episode is available. And there is another season coming, but more more details on that soon.

Geek Out with Matt Navarra is a Big Revolution production. Find out more at bigrevolution.net/podcasts. You can also check out my newsletter if you want to be kept up to date with everything that's happening in the world, uh, you know, so you don't have to keep track of all the, all the tech news with all the rest of the world's terrible things going on. Uh, I'll keep you up to date with that. Just visit bigrevolution.net/newsletter and you can sign up. You can find me on Twitter as @martynovarra. @MattinSFP.

And I'm @MattNavarra on Twitter as well. So don't forget to tell all your friends about the podcast. And of course, join the Facebook group. I keep saying it every week in these episodes and in previous seasons. Join the Facebook group. You'll find us as Social Geek Out. If you search for that on Facebook, we'll be there and we're discussing all of this sort of stuff.

See you soon.

Goodbye, geeks.