Has Zuckerberg invented a Twitter killer?
Threads made its debut on Wednesday night with a bang. Meta’s new social network had already racked up more than 10 million sign-ups within seven hours of its launch, and attracted celebrities and politicians like Oprah Winfrey and Representative Alexandria Ocasio-Cortez, Democrat of New York.
But the presence of big-name advertisers such as Procter & Gamble and Ford points to the bigger commercial stakes in the fight between Mark Zuckerberg’s new platform and Elon Musk’s Twitter.
Meta is billing Threads as a “friendly” forum, but the social media giant is gunning for the blue bird. Mr. Zuckerberg wants the platform to become “a public conversations app with 1 billion+ people on it.” And he engaged with his nearly 600,000 Threads followers, responding with a laughing emoji when one suggested that the new social network could be Twitter’s undoing.
Advertisers are watching closely, even if they can’t buy ads there yet. “Threads could really fly and people are obviously concerned about brand safety on Twitter,” Martin Sorrell, the longtime advertising mogul who now leads S4 Capital, a digital marketing firm, told DealBook.
Twitter’s new C.E.O., Linda Yaccarino, joined last month aiming to patch relations with big brands that left the platform after Mr. Musk bought it and culled an army of content moderators. “Controversy is a negative and not something that brands want to deal with,” Mr. Sorrell said.
Meta has had its own problems with privacy and data, and some have already raised concerns about how it will handle disinformation on the platform. But the company has made strides to improve and is seen as a genuine alternative, Mr. Sorrell said, adding that the timing of the launch, just as Twitter looks to restrict how many tweets users can see, is “advantageous.”
Meta is also able to leverage the heft of its platforms and ad operations. The company has imported features from Instagram, which is used monthly by roughly two billion people. And it is targeting the same lucrative audience of digitally savvy creators, Adam Mosseri, the head of the photo-sharing app, said in an explanatory video.
One sticky feature: If a Threads user wants to delete the account, she has to also delete her Instagram account. Would that invite scrutiny from the F.T.C., which has pledged to crack down on firms that make opting out of a service too onerous, DealBook wonders?
Mr. Musk was unimpressed. “It is infinitely preferable to be attacked by strangers on Twitter, than indulge in the false happiness of hide-the-pain Instagram,” he tweeted.
Not everyone can use Threads. It’s available in 100 countries, but not in the Europe Union as Meta and privacy watchdogs battle over the company’s handling of user data. There are also no direct-messaging or livestream options, unlike Twitter.
HERE’S WHAT’S HAPPENING
Fed officials suggest that multiple interest rate increases are coming. Minutes from the central bank’s rate-setting meeting last month show that some officials favored raising rates instead of holding steady, as efforts to tamp down inflation show slow progress. Economists and investors will be watching Friday’s jobs report for further signs of how aggressive the Fed will be on rates this year.
The Biden administration appeals a ruling limiting communications with social media platforms. The Justice Department is seeking to overturn an injunction blocking a slew of government officials from encouraging companies to remove certain kinds of content. Meanwhile, the State Department reportedly canceled a regular meeting about hacking threats and the 2024 election with Facebook executives.
Donald Trump raises more than $35 million in the second quarter. The amount was nearly double what the former president raised in the previous three months and shows how multiple indictments appear not to have hurt him politically. Meanwhile, Gov. Ron DeSantis of Florida is still struggling to make a strong case against Mr. Trump.
Interest in ChatGPT and others appears to be cooling. Both web traffic and app downloads for the enormously popular A.I. chatbot and peers like Bing have waned, according to new research. That suggests that ChatGPT’s novelty is wearing off with mainstream users, even as the tech industry remains wildly enthusiastic about artificial intelligence.
Two top entertainment moguls team up
After stepping down as one of Paramount Global’s top executives last year, David Nevins has found a new perch: C.E.O. of The North Road Company, the studio founded by fellow entertainment veteran Peter Chernin.
The hire gives North Road a chief who helped produce some of the biggest series of the past two decades, DealBook’s Lauren Hirsch and The Times’s John Koblin report.
Industry executives had wondered where Mr. Nevins would go after Paramount. He rose to prominence by producing shows like “ER,” “24” and “Friday Night Lights.” He then joined Showtime’s entertainment division in 2010, overseeing hits like “Homeland,” “The Affair” and “Yellowjackets.”
By the time he left last year, Mr. Nevins had become chief creative officer of scripted content for the Paramount+ streaming service.
Mr. Nevins is teaming up with a highly regarded Hollywood veteran. Mr. Chernin, who was Rupert Murdoch’s top deputy at News Corp., founded Chernin Entertainment in 2010, producing the likes of “Ford v Ferrari” and “Hidden Figures.” He then created North Road, which includes Chernin Entertainment, last year to establish an independent studio aimed at feeding Hollywood’s appetites.
To build out his new venture, Mr. Chernin has acquired companies including Kinetic Content, which produced “Love Is Blind” for Netflix, and the documentary producer Words + Pictures, which was behind ESPN’s “30 for 30.”
North Road has plenty of money behind it. It raised $150 million from the Qatar Investment Authority this year, valuing it at roughly $1 billion. That comes on top of $500 million that the investment firm Providence Equity Partners put into North Road at launch, and $300 million in debt financing from Apollo.
Mr. Nevins is joining North Road at an inflection point for the entertainment industry. After years of runaway spending on content in the name of subscriber growth, streaming services are retrenching as Wall Street soured on the strategy.
Mr. Chernin contends that entertainment giants will increasingly focus on working with independent production companies with quality content and solid financials.
“This is going to be a good time to be a well-funded” stand-alone company, Mr. Nevins told DealBook.
A new narrative for Taylor Swift and FTX
The sudden collapse last year of Sam Bankman-Fried’s FTX ensnared a slew of celebrities who had become paid ambassadors for the crypto exchange, including the famed quarterback Tom Brady and his wife at the time, the supermodel Gisele Bündchen.
One superstar who escaped the mess, however, was Taylor Swift. The pop singer won plaudits for her business savvy after Adam Moskowitz, a lawyer suing Brady and Bündchen over their FTX ties, said that Swift had passed on a similar sponsorship deal. The truth is more complicated, The Times’s Erin Griffith and David Yaffe-Bellany report:
In an interview with The New York Times, Mr. Moskowitz said he had no inside information about the talks.
In reality, Ms. Swift’s side signed the sponsorship agreement with FTX after more than six months of discussions, three people with knowledge of the deal said, and it was Mr. Bankman-Fried who pulled out. The last-minute reversal left Ms. Swift’s team frustrated and disappointed, two of the people said.
A spokeswoman for Ms. Swift declined to comment.
Canada makes the news
A fight between Canada and Big Tech generated more headlines on Wednesday, after the country’s government pulled advertising from Facebook and Instagram. The reason: Meta, the parent group of the social platforms, said it would block access to news in Canada because of a law requiring tech companies to pay media owners for links to their news content — a regulatory process that is being watched closely by lawmakers worldwide as a potential model.
The law will take effect in about six months. The Canadian government says that digital platforms, like Meta and Google, have benefited from free content while devouring publishers’ ad revenue. The tech companies counter that their platforms have extended the publishers’ ability to reach audiences.
A push to regulate is gathering pace. In 2021, Australia introduced similar regulations. Meta blocked news there, only to relent after tweaks were made. The company and Google subsequently negotiated deals with Australian media companies and publishers have raked in millions. The Canadian law built on the Australian model, and other countries are weighing their own measures.
Canada is particularly upset with Meta. Pablo Rodriguez, the minister of Canadian heritage, accused the company of being “unreasonable and irresponsible” for not engaging with the government, unlike Alphabet, the parent group of Google. He added that pulling the advertising would cost the company millions.
U.S. lawmakers are watching. California introduced a similar bill in March and some federal lawmakers have indicated their support for Canada’s approach. “It’s unacceptable for companies like Google & Facebook to abuse their power to cut off access to news. Leaders are right to stand firm against these tactics,” Senator Elizabeth Warren, Democrat of Massachusetts, tweeted. Senator Amy Klobuchar, Democrat of Minnesota, who has co-sponsored a bill similar to the one in Canada, told The Globe and Mail newspaper that lawmakers must resist company pressure: “Of course monopolies will fight us every step of the way.”
Meta did not respond to a request for comment. A Google spokeswoman said the company hoped conversations with the government could help resolve concerns so that it won’t end up blocking information.
THE SPEED READ
Deals
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JetBlue said it would withdraw from an alliance with American Airlines after a judge blocked the partnership amid opposition from the Justice Department. (CNBC)
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The Raine Group, the merchant bank focused on sports, media and tech deals, raised $760 million for its latest investment fund. (Raine)
Policy
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