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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast

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Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Talking about the v

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Speaker 1: w I D four, pretty cool looking vehicle, I have

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Speaker 1: to say, um, and I'll be psyched to get into

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Speaker 1: that tear down for sure, but I want to focus

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Speaker 1: now not on cars. Um, but I was gonna say

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Speaker 1: on hair, but really I want to focus on growth

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Speaker 1: in business because we're gonna bring in Amy Errett right now.

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Speaker 1: She is the founder and CEO of Madison Read out

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Speaker 1: of San Francisco, and she has started a killer at

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Speaker 1: hair home color business. Um. Now, I don't have any hair, Amy,

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Speaker 1: and Paul's hair is a beautiful shade of wisdom white

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Speaker 1: that he would never want to us with. But it

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Speaker 1: is incredibly impressive the business you started and the and

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Speaker 1: the growth that you've seen. Talk us through what was

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Speaker 1: like for you. Yeah, so thanks very much for having me,

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Speaker 1: and uh, we're we're all good that you don't have

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Speaker 1: any hair that's okay. Um. So yeah, we uh, you

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Speaker 1: know the businesses about six and a half years old,

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Speaker 1: we were growing really well, uh and then the pandemic

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Speaker 1: hit and that our business girl hundred seven percent last year.

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Speaker 1: So why is that just because people? A means that

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Speaker 1: just because people couldn't go to the salon um or

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Speaker 1: do you think they were coloring their hair even more

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Speaker 1: just because the time they had at home? I think

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Speaker 1: it's both. I think they couldn't go to the salon,

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Speaker 1: So we saw an influx of what we're at that

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Speaker 1: time salon goers who have now many of them have

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Speaker 1: been converted to our business and seeing that the results

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Speaker 1: uh and the cost savings are fantastic and we have

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Speaker 1: a great ingred the in story in eight pree ingredients story.

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Speaker 1: So what we think is a very high quality product.

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Speaker 1: And I think there are a number of people that

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Speaker 1: were looking on Zoom all day and realizing that they

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Speaker 1: wanted to color their hair because it is emotional and

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Speaker 1: it makes you feel good about yourself when your hair

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Speaker 1: looks great. So I think there was another people that

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Speaker 1: were coloring at home already, but increase their frequency yeah,

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Speaker 1: I mean that's kind of what I wanted to get at.

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Speaker 1: I'm not sure if you've done any survey work with

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Speaker 1: your customers, but you know, a lot of things in

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Speaker 1: terms of what we do day to day got disrupted

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Speaker 1: during the pandemic. But a lot of folks say, well,

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Speaker 1: I'm just gonna go back to kind of my old

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Speaker 1: ways once we get to the other side of this.

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Speaker 1: How's that. How do you think your customer base is

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Speaker 1: going to kind of evolve post pandemic in terms of

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Speaker 1: their behavior. Yeah, so we've been watching that very closely.

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Speaker 1: We've obviously been spending a lot of time on what

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Speaker 1: we call retention and loyalty and making sure that our

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Speaker 1: customers are very happy. We have not seen that drop off,

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Speaker 1: and in fact, we've seen continued growth every month. Um.

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Speaker 1: One other nuance of our business that may not be

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Speaker 1: clear is we have thirty one nationwide what we call

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Speaker 1: hair color bars, which are a faster, less expensive, uh

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Speaker 1: take on getting your hair colors in the salon um

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Speaker 1: and so we have we had those pre pandemic, only twelve.

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Speaker 1: We've opened over nineteen during the pandemic, which is the

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Speaker 1: whole separate story. But we also have seen a major

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Speaker 1: influx as some people are getting back NATed of actually

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Speaker 1: people coming into our hair color bars because they love

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Speaker 1: the product and they want us to apply it for uh,

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Speaker 1: it's it's the s l a of that is about

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Speaker 1: seventy five minutes, which is radically different than going to

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Speaker 1: a salon and lot less expensive and the authenticity and

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Speaker 1: transparency of the product. So sometimes you may want to

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Speaker 1: do it at home, sometimes you may want to come

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Speaker 1: into a hair color bar. So we really haven't seen

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Speaker 1: the part that's going away from our business at all.

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Speaker 1: I also think it's quite cool that you have developed

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Speaker 1: the Color Crew, which is a team of licensed colorists.

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Speaker 1: They help UM customers online. UM. When I was a

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Speaker 1: kid and I used to dye my hair purple or

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Speaker 1: blue or green with manex panic that I would go.

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Speaker 1: I was really into you know, um punk rock, and

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Speaker 1: I'd go to Ricky's in New York and it was

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Speaker 1: I don't know, ten box or even cheaper. But but

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Speaker 1: your hair product has been dubbed the broken bag of

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Speaker 1: home hair color. Why why is that? Is it just

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Speaker 1: a higher level of quality than say Loureal or Claire

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Speaker 1: All or whatever else is out there. So our product um,

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Speaker 1: I love that description. The broken bag of hair color

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Speaker 1: um our product is salon quality. And so historically there

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Speaker 1: has been a difference between the color that you buy

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Speaker 1: on the shelf of Ricky's or Walgreens or Dwayne Reed

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Speaker 1: and the color that is applied in a professional salon.

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Speaker 1: Those are very different quality um, whether it's color molecules,

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Speaker 1: efficacy of the product that our taste, ingredients that we

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Speaker 1: take out, and some good things we put in that

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Speaker 1: are reparative. And so there has never been before us

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Speaker 1: a salon quality professional grade. Maybe that's the best way

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Speaker 1: of saying it. Hair color product that is direct to

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Speaker 1: a consumer. And so what is what is part of

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Speaker 1: the disruption is giving the consumers the same product that

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Speaker 1: we apply in our hair color bars, which is the

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Speaker 1: efficacy of a professional product where in nothing again against

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Speaker 1: whatever you used that was set up for at home

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Speaker 1: use les. Yeah, okay, so I just you know, before

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Speaker 1: we wrap up and we only have thirty seconds to

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Speaker 1: anybody got to ask U, I, p O or spack

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Speaker 1: you what does your exit look like? Uh? Well, you

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Speaker 1: know you'll have to stay tuned and have me back

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Speaker 1: to know the answers of that. But uh, let me

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Speaker 1: put it this way. I the spack market is that

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Speaker 1: if I get another inbound I'm spending most of my

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Speaker 1: time spending inbound UM. But um, you know, I don't know.

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Speaker 1: We're we're well poised to be, you know, a public company.

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Speaker 1: We'll see which way that direction goes. And we're excited

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Speaker 1: about the opportunity. Hey, Amy, thank you so much for

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Speaker 1: joining us. A fascinating story which you continued. Good luck, Amy, Eretic,

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Speaker 1: founder and CEO of Madison Read. They just completed a

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Speaker 1: fifty two million dollars Series F funding round and have

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Speaker 1: raised close to two d million dollars since launch. In

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Speaker 1: the private market is suggested maybe the next move will

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Speaker 1: be a spack or an I p O. Senator Elizabeth Warren,

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Speaker 1: Democrat from Massachusetts, says her ultra millionaire tax um would

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Speaker 1: raise three trillion dollars over the next ten years and

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Speaker 1: help fund infrastructure, childcare, and education. She spoke with Bloomber

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Speaker 1: Kevin Cirelli on Capitol Hill. More and more people are

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Speaker 1: starting to look at the wealth tax and say, wait

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Speaker 1: a minute, this makes a lot of sense. You know,

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Speaker 1: people across this nation getting independence, Republicans, Democrats, a majority

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Speaker 1: of all of them want to see us to a

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Speaker 1: wealth tax because they know that the system is rigged

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Speaker 1: against them. With that in mind and a little bit

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Speaker 1: of disclosure, I keep hundreds of dollars in my checking

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Speaker 1: account Huntington's Private Bank. Dan Graffith joins us right now,

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Speaker 1: director of Wealth Strategy out of the great state of Ohio. Dan, Um,

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Speaker 1: what do you think about the idea of wealth tex

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Speaker 1: I mean, it wouldn't hit me too hard, so I'm

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Speaker 1: not terribly bothered. But um, I guess a lot of

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Speaker 1: your other clients would lose some cash. Well, good morning,

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Speaker 1: Thank you for having me. I agree with you. It

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Speaker 1: sounds like our balances are somewhat similar. Glad to have

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Speaker 1: you as a client, for sure. But I think that's

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Speaker 1: the biggest concern that a number of our clients have

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Speaker 1: raised initially is although it may appear that this will

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Speaker 1: affect not that many folks, the concern that our clients

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Speaker 1: are raising is what is that valuation? Num? We're gonna

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Speaker 1: look like, you know, what, what is my business really worth?

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Speaker 1: We know that here in there's gonna be huge numbers

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Speaker 1: or mergers and acquisition activities, and as a consequence of that,

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Speaker 1: what are the valuations for business is going to look like.

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Speaker 1: So we know that we can probably tell what balance

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Speaker 1: sheets look like when it's stocks and bonds, but when

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Speaker 1: they're illiquid assets, this could be a real problem for

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Speaker 1: a lot of clients that exists out there. And Dan,

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Speaker 1: are are some of your clients. Are they concerned that

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Speaker 1: maybe this is just the you know, the first step

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Speaker 1: towards just a higher tax regime overall, which is in

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Speaker 1: effect at some point will come down and impact many

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Speaker 1: more US citizens. A lot of clients are obviously concerned

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Speaker 1: about many elements of tax pieces. I had somebody just

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Speaker 1: this week who mentioned that the original a m T

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Speaker 1: was put in place to only affect about a hundred

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Speaker 1: and fifty people, and obviously now that's grown to affect

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Speaker 1: to a a lot more folks. A lot of our clients

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Speaker 1: are concerned about the same things that Senator Warren articulated,

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Speaker 1: income inequality, UM. But I think a lot of them

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Speaker 1: are just concerned about making sure that we can address

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Speaker 1: this in a way that's most effective for making community

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Speaker 1: stronger and keeping businesses strong as well. When I think

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Speaker 1: about when I hear about audits, I kind of get

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Speaker 1: the heb gbs I mean literally sends shivers up my

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Speaker 1: spine to think about that, um and I guess you

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Speaker 1: would have to oversee a lot of them for your clients.

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Speaker 1: How much would it cost to make sure the wealth

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Speaker 1: tax is properly enforced? You know, that's a great question

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Speaker 1: and one of the other big concerns that our clients

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Speaker 1: have raised the cost of enforcement and more the more

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Speaker 1: I would say, the cost of compliance is going to

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Speaker 1: be a big one. We mentioned the fact that a

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Speaker 1: lot of illiquid assets are gonna need to be uh

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Speaker 1: put through valuation processes, and obviously, if you're going to

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Speaker 1: be doing that every year, then you've got the I

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Speaker 1: r S that's gonna come back and say, well, we

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Speaker 1: think these assets are worth this, you know, the family

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Speaker 1: farmers worth this bunch, and the taxpayer is gonna say

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Speaker 1: maybe they have a different position on valuation and they're

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Speaker 1: going to have to potentially do that every single year.

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Speaker 1: So a clients are expressing a lot of concern about this.

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Speaker 1: This This will definitely potentially add to the number of

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Speaker 1: people who work for the I r S. But it's

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Speaker 1: gonna be a big, a big employment number for people

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Speaker 1: who are in tax and valuation enforcement. To a lot

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Speaker 1: of lawyers and accountants will be put into work if

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Speaker 1: this proposal is adopted. Hey, Dan, you know, on a

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Speaker 1: just kind of a stepping back more broadly, what are

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Speaker 1: you telling your clients these days? We've got equity markets

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Speaker 1: at or near all time highs. It seems like on

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Speaker 1: a daily basis, we have interest rates edging up here.

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Speaker 1: It's kind of been some of the more recent discussions

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Speaker 1: you've had with your clients um at Hunting Private Bank. Overall,

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Speaker 1: I think our chief investment office is really still very

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Speaker 1: optimistic about the markets overall. You know, earnings reports continue

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Speaker 1: to be very positive, and there are a lot of

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Speaker 1: indications that things are still going to look up and

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Speaker 1: there's more opportunity there. The benefit of what we do

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Speaker 1: in the Wealth Strategy Group is we get to work

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Speaker 1: with business owners directly. So part of the fun and

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Speaker 1: excitement of that job is that we get to talk

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Speaker 1: to the business owners and see what they're thinking. And

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Speaker 1: I have to tell you that the conversations that I

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Speaker 1: have with our clients are equally optimistic at a kind

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Speaker 1: of micro level as well. So I think in a

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Speaker 1: lot of ways, we think there's a lot of reason

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Speaker 1: to be optimistic about the future. I guess your your clients, though,

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Speaker 1: if if this thing starts to gain steam, they're gonna

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Speaker 1: look to take as much income as they can now

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Speaker 1: to get out ahead of it. I think liquidity is

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Speaker 1: probably the biggest concern that's exactly right when when it

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Speaker 1: comes to clients relative to not just this wealth tax,

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Speaker 1: but any volatility in the tax policy that happens, you know,

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Speaker 1: anything that happens with with a business when it comes

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Speaker 1: to liquidity is an important piece. If you've got fifty

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Speaker 1: million dollars and you're paying an annual wealth tax of

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Speaker 1: two percent, that's a million dollars that you've got on

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Speaker 1: the on the sidelines. That our clients would be concerned

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Speaker 1: is a million dollars that they're not able to use

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Speaker 1: to pay employees or invest in research and development, or

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Speaker 1: even their business growth or community activities that many of

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Speaker 1: our our clients are very much committed to. And so

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Speaker 1: I think liquidity is a big concern um not just

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Speaker 1: for this but for a lot of our clients as

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Speaker 1: we move towards what could be some changes in tax policy. Hey, Dan,

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Speaker 1: thanks so much for joining us. We appreciate your thoughts there.

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Speaker 1: Dan Griffith, Senior Vice president and Director of Wealth Strategy

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Speaker 1: at Huntington's private bank based in North Canton, Ohio. Just yeah,

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Speaker 1: just below Uh you know, it's a it's entering in

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Speaker 1: the Ohio State University, which I'm not sure why we

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Speaker 1: have to accent the North Canton's pretty far away from

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Speaker 1: the Ohio State University, but I bet you Dan, as

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Speaker 1: a Buckeyes fan anyway, it's are not to be there,

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Speaker 1: pretty solid there. So it's always good to hear uh

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Speaker 1: Dan's thoughts here about this, you know, wealth tax that

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Speaker 1: is winding its way through Congress. Will see if there's

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Speaker 1: any bipartisan support for this at all. I think most

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Speaker 1: people know that my dog and best friend, Stephen is

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Speaker 1: a Rottweiler. He is not a German shepherd. Greg Jared,

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Speaker 1: thank you very much for that business flash. Now, I

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Speaker 1: want to talk a little bit about Muni's with our

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Speaker 1: Amanda Albright Er Bloomberg Muni Bond reporter. Um. One of

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Speaker 1: the reasons Amanda, that we bring you in is because

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Speaker 1: it looks like the state rescue funds from Joe Biden's

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Speaker 1: proposal kind of dwarf the tax hit and then turn

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Speaker 1: into more of a stimulus than the drag. Yeah. Absolutely, Um,

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Speaker 1: it's been UM super interesting just the way that UM

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Speaker 1: kind of are thinking around UM, state and local aid

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Speaker 1: M throughout the pandemic has changed over time. UM. But

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Speaker 1: so my colleagues and I we tallied the expected tax

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Speaker 1: revenue hit for fiscal UM and we found that it's

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Speaker 1: about thirty one billion UM, which is still a very

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Speaker 1: material number, but UM, it's obviously less than the UM

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Speaker 1: nearly two hundred billion that states would receive under the

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Speaker 1: Biden UM proposals. So does that put that two billion

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Speaker 1: at risk? If I'm a congressman concerned about you know,

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Speaker 1: the soaring dead here, I might say, Hey, the states

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Speaker 1: actually did better than we initially thought. They don't need

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Speaker 1: to a rebillion. Yes, And I think that's exactly where

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Speaker 1: the conversation is heading UM in Congress. It's absolutely it's

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Speaker 1: it's very nuanced UM and states. There's there's a lot

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Speaker 1: more than just revenues UM that states they're dealing with.

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Speaker 1: They're dealing with pandemic related costs, they're dealing with UM

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Speaker 1: trying to meet unemployment claims. So the picture for state

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Speaker 1: finance is very complicated. But we have seen UM forecasters

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Speaker 1: who kind of look at the situation for states holistically.

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Speaker 1: We've even seen forecasters who look beyond just revenues and

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Speaker 1: also look at costs. They've also UM come down in

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Speaker 1: their forecasts of how much of the fiscal impact COVID

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Speaker 1: is going to be on states and so UM it

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Speaker 1: definitely all all signs points that that two billion dollars

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Speaker 1: is UM. It is generous UM, but it won't be

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Speaker 1: necessarily UM. Space will still find ways to use that money,

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Speaker 1: and we point out in the story that that could

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Speaker 1: go to kind of economic stimulus projects which would kind

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Speaker 1: of give UM President Biden a headstart on his kind

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Speaker 1: of ultimate goal of proviving the economy. When you get

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Speaker 1: back to your markets dashboard, is this all priced into

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Speaker 1: the MUNI market? So the way the union market is

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Speaker 1: pricing things is very interesting. There's been a sell off

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Speaker 1: lately because of treasuries UM, but I would say that

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Speaker 1: a lot of investors have been factoring in stimulus aid

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Speaker 1: to credits like Illinois and New York m p A UM.

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Speaker 1: So at this point UM if state state and locals,

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Speaker 1: if that money was taken away from them, I don't

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Speaker 1: know what the reaction would be. Because I also think

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Speaker 1: UM the way that the pandemic UM has played out

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Speaker 1: for municipal finance. It really kind of underscores how resilient

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Speaker 1: some of these issues are. UM. So I'm still very

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Speaker 1: curious to see if this will actually have any bond

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Speaker 1: market impact if that ad taken away. But that's obviously

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Speaker 1: not what I'm um necessarily expecting. But I do think, um,

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Speaker 1: the clearly the amount of the three fifty billion dollar

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Speaker 1: top line number clearly left being talked about, and um,

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Speaker 1: you know, could be altered in the Senate. So let's

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Speaker 1: under a scenario where the two billion dollars doesn't get through, Amanda.

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Speaker 1: You know some of the states. Is the expectation that

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Speaker 1: they will spend it on bridges and tunnels and roads

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Speaker 1: and that kind of thing. Yeah, that's kind of what

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Speaker 1: I'm most interested in watching going forward what that money

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Speaker 1: is used for. I'm sure that some of the states

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Speaker 1: will maybe try to do infrastructure projects, broadband projects if

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Speaker 1: depending on what the guidelines are from the federal government. UM.

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Speaker 1: But there's also in some kind of you know, economic

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Speaker 1: experts have raised you know, potential issues um in their

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Speaker 1: eyes if some states are saying, hey, we just got

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Speaker 1: all this money from the federal government, let's just cut

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Speaker 1: taxes or UM, you know, we'll is caused states see

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Speaker 1: this windfall of money. Are they going to behave responsibly

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Speaker 1: with that money? Um? We saw this play out a

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Speaker 1: little bit with the Carezack money that they got. UM.

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Speaker 1: We covered some of the political bickering that happened last

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Speaker 1: year with some of the care Zack funds because obviously

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Speaker 1: with fifty states, UM, fifty legislatures, governors like, there's a

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Speaker 1: lot of variants and how states will kind of speak

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Speaker 1: to use that money. And I think that's also caught

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Speaker 1: the attention of economists who are starting to maybe question

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Speaker 1: a little bit is this money going to be used responsibly?

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Speaker 1: And it's a it's a big question mark. And I

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Speaker 1: think that's kind of where the debate stands right now.

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Speaker 1: So it's very very interesting. I was kind of wondering, Um,

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Speaker 1: if you are either at Duke or U n C.

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Speaker 1: Do you hang out in Chapel Hill or do you

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Speaker 1: you don't gonna Durham? Right? Does everybody hang out in

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Speaker 1: Chapel Hill? So it's funny because when you're when you're

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Speaker 1: in underground, all the kids go to Chapel Hill to

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Speaker 1: hang out. But now that my friends and I are older.

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Speaker 1: We really like Durham, So all right, I'll give you.

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Speaker 1: I'll give it the real Amanda's Amanda's right. When I

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Speaker 1: was a student at Duke, Amanda's tar heel and Paul

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Speaker 1: is a Blue Devil. Yeah, you basically got through the

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Speaker 1: Duke social scene in about fifteen minutes and then you

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Speaker 1: went to to Carolina. But things have changed. Durham has

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Speaker 1: become a very hot, trendy, chic market. Think you know,

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Speaker 1: a smaller version of Austin, Texas if you will. Um

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Speaker 1: lots of new restaurants and bars and hotels and things

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Speaker 1: like that that I'm seeing a lot more Chapel Hill,

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Speaker 1: Power Fernal. You're walking around Drham on our Friday night

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Speaker 1: than we ever did before. So things are changing. So

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Speaker 1: it's a hot area of the country, which is good

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Speaker 1: for everybody down there. And what we're seeing these a

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Speaker 1: lot of folks leave in New York that that's one

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Speaker 1: of the markets people are going to. I have written

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Speaker 1: a Ducatti Monster asked for us through both towns, and

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Speaker 1: I thought it was pretty awesome. The reason I'm kind

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Speaker 1: of wondering about this is all my college friends Amanda

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Speaker 1: a couple of months ago and started asking me a

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Speaker 1: ton of questions again about stocks, and I joke about

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Speaker 1: the retail popularity of muni's. But is there any play

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Speaker 1: across from the Reddit crowd, from the robin Hood crowd

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Speaker 1: into your universe? Um, I would be um, who's always

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Speaker 1: looking for interesting things. I would be very excited about that.

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Speaker 1: But I haven't heard about that happening. But um, there's

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Speaker 1: lots of like interesting credits in munies that I think

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Speaker 1: would probably appeal to the millennial gen Zum investor base.

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Speaker 1: But munis are more expensive to buy in, so it um.

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Speaker 1: But I would be very curious if that happened. Um,

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Speaker 1: that would be very exciting as a reporter. So al right,

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Speaker 1: a manute, thanks so much for joining us. Unfortunately, I

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Speaker 1: don't think you unc or Duke is going to the

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Speaker 1: n c A tournament this year, so we're gonna have

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Speaker 1: some extra free time on our hand. Amanda Albright, Bloomberg

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Speaker 1: Municipal Bond Reporter. We appreciate that. And um, hey, the

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Speaker 1: muni market, it's been so hot, Matt, I mean funds

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Speaker 1: flowing into the muni market. Um. We hear from Joe

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Speaker 1: Meisa every Friday, and that's one of the issues where

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Speaker 1: we talk about and the funds going in there are great,

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Speaker 1: particularly in a taxable municipal market, which was a market

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Speaker 1: I never even knew existed up until you know, a

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Speaker 1: year or two ago. But Joe and Eric Kazatsky Bloomberg Intelligence,

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Speaker 1: who also covers municipals, they talk about that taxable municipal

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Speaker 1: bond market being super hot, lots of demand. When I

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Speaker 1: was a kid, you had to pay for stuff like

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Speaker 1: music and movies and magazines. But um, for a while there,

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Speaker 1: over the last couple of decades, that stuff all became free.

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Speaker 1: Alex Webb says, you're gonna have to get ready to

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Speaker 1: pay for it again because of Google and Facebook. The

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Speaker 1: Bloomberg Opinion columnists joins us. Now, so Alex, um, what

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Speaker 1: are we gonna have to start forking out cash now

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Speaker 1: to read news by journalists show particularly hopefully by like

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Speaker 1: you and me. Um. No, I think the key thing

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Speaker 1: is there are really three phases to this. In the

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Speaker 1: original sort of model, you know, pre Internet, the original

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Speaker 1: but certainly the model pre Internet, most of the content

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Speaker 1: that we consume was the very least subsidized by ads.

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Speaker 1: So actually, if you look at the New York Times

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Speaker 1: in circuit two, thousand and six, when it's as revenue

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Speaker 1: peaked um it would make five dollars a year from

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Speaker 1: a print subscriber paying for the physical copy of the newspaper,

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Speaker 1: but it would make another thousand dollars a year per

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Speaker 1: subscription from advertising. So ads subsidized all of our media consumptions.

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Speaker 1: The same applies to television, the radio, and tending more. Besides,

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Speaker 1: what's happened with the internet first wave of the Internet,

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Speaker 1: all that stuff went online for three with the hope

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Speaker 1: that they'll be able to sell ads on top of it.

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Speaker 1: Never really worked out that way, and all of the

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Speaker 1: ad revenue has now been sucked up. And I say

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Speaker 1: all of it, but literally three quarters of the three

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Speaker 1: hundred billion dollars that were spent on online ads last

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Speaker 1: year went to Google and Facebook. And that means that

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Speaker 1: the companies, the organizations that previously were the beneficiaries of

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Speaker 1: advertising income have got to find other ways to pay

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Speaker 1: for themselves, and frankfully, the most the easiest way of

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Speaker 1: doing that is with paywalls and alex Yes it relates

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Speaker 1: to the news business. The number of examples of successful

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Speaker 1: paywalls is few and far between. You know, the New

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Speaker 1: York Times okay, Law Street Journal, Okay, maybe the f

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Speaker 1: T as well, but there's not a whole lot. What

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Speaker 1: does that mean to the future of news? Do you

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Speaker 1: think in an online world? So I think some things

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Speaker 1: this isn't just about news. You know, we've seen it,

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Speaker 1: We're now seeing it everywhere. And the reason I wrote

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Speaker 1: this column now is because Swifter is introducing a paid tier.

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Speaker 1: And UM, I think one of the reasons that there

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Speaker 1: have been but not all paywalls have been successful is

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Speaker 1: because not everyone has a paywall. So in order for

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Speaker 1: the paywall models of work, you kind of need everyone

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Speaker 1: to be doing it. UM. If there is sort of

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Speaker 1: a chink in that armor where by um, you know,

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Speaker 1: substantial publications else where are free, UM, web users are

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Speaker 1: going to say, well, why should I pay for you know,

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Speaker 1: company X, when I'll get company ye gratis And UM,

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Speaker 1: I think now that we've reached this consensus that content

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Speaker 1: is something that should be paidful because it's no longer

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Speaker 1: able to be as supported. Mentalities are starting to change

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Speaker 1: and people getting more comfortable with the idea that actually

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Speaker 1: you have to pay for your video streaming, video on

432
00:23:26,840 --> 00:23:31,840
Speaker 1: demand streaming service, your music streaming, your news magazines, whatever,

433
00:23:31,880 --> 00:23:34,719
Speaker 1: it might historically have been. I gotta say, as somebody

434
00:23:34,720 --> 00:23:38,000
Speaker 1: who you know, I grew up probably shelling out one

435
00:23:38,119 --> 00:23:41,360
Speaker 1: or two or three hundred bucks a month for records

436
00:23:41,440 --> 00:23:44,280
Speaker 1: and tapes, um, and and then c d is obviously

437
00:23:44,359 --> 00:23:47,840
Speaker 1: later in life. But now I'm so stunned. Every time

438
00:23:47,880 --> 00:23:50,040
Speaker 1: I look at my Apple Music, I pay eleven dollars

439
00:23:50,040 --> 00:23:52,960
Speaker 1: a month for all of the records, tapes and c

440
00:23:53,160 --> 00:23:56,720
Speaker 1: d s, which is pretty awesome. On the other hand,

441
00:23:56,760 --> 00:24:00,199
Speaker 1: alex journalism has been hit hard by free news. Is

442
00:24:00,440 --> 00:24:05,239
Speaker 1: um you've witnessed I'm sure swathes of layoffs. The New

443
00:24:05,320 --> 00:24:08,120
Speaker 1: York Times is a shadow of its former self and

444
00:24:08,280 --> 00:24:10,840
Speaker 1: but growing again. Though Yeah, well maybe this is a

445
00:24:10,880 --> 00:24:12,920
Speaker 1: good thing. Maybe if people get used to the fact

446
00:24:12,960 --> 00:24:15,359
Speaker 1: that they got to pay for news or just be

447
00:24:15,560 --> 00:24:18,560
Speaker 1: sort of dumbed down by the facebooking of the world,

448
00:24:18,600 --> 00:24:22,919
Speaker 1: they'll choose the former. Are You certainly are seeing the

449
00:24:22,920 --> 00:24:25,480
Speaker 1: trend that there are some companies who have said, well,

450
00:24:25,480 --> 00:24:29,119
Speaker 1: actually we're going to introduce a paywall simply because um

451
00:24:29,280 --> 00:24:32,639
Speaker 1: don't necessarily need one. But there's a quality perception that

452
00:24:32,720 --> 00:24:37,720
Speaker 1: if I'm paying for publication X by implication publication, why

453
00:24:37,760 --> 00:24:40,480
Speaker 1: if it's free, it must be worse, and so there's

454
00:24:40,480 --> 00:24:43,040
Speaker 1: an element of pride amidst all this. I think the

455
00:24:43,040 --> 00:24:45,920
Speaker 1: New York Times, frankly now is reaching a level that

456
00:24:46,080 --> 00:24:49,159
Speaker 1: is comparable to where it was fifteen years ago. It

457
00:24:49,280 --> 00:24:52,240
Speaker 1: now has six million digital subscribers. It had it its

458
00:24:52,280 --> 00:24:55,399
Speaker 1: peak over selling a million copies of the print newspaper

459
00:24:55,480 --> 00:24:57,399
Speaker 1: a day. I think that might have had three or

460
00:24:57,400 --> 00:25:00,320
Speaker 1: four raiders the readers for each copy, so to slight

461
00:25:00,320 --> 00:25:03,240
Speaker 1: a different calculation. But I think that the key consideration

462
00:25:03,320 --> 00:25:07,439
Speaker 1: now is that this is extending beyond just your classic media.

463
00:25:07,680 --> 00:25:10,440
Speaker 1: As I said before, it's about the way that actually

464
00:25:11,119 --> 00:25:13,000
Speaker 1: it used to be that much of the web was

465
00:25:13,040 --> 00:25:16,120
Speaker 1: funded by advertising. If it wasn't literally an e commerce

466
00:25:16,160 --> 00:25:18,760
Speaker 1: website or something where you're paying for product to be

467
00:25:18,760 --> 00:25:21,480
Speaker 1: delivered to you. Um, stuff tended to be free because

468
00:25:21,480 --> 00:25:23,359
Speaker 1: it was funded by ads. As more and more of

469
00:25:23,400 --> 00:25:26,119
Speaker 1: those ads go to Google and Facebook, it means that

470
00:25:26,160 --> 00:25:29,760
Speaker 1: there's more than just media organizations that are having to charge,

471
00:25:29,880 --> 00:25:31,800
Speaker 1: and that is a big change, and I think one

472
00:25:31,840 --> 00:25:35,320
Speaker 1: that people are solely having to adapt to. You know,

473
00:25:35,520 --> 00:25:38,040
Speaker 1: a related story that just came out this morning courtesy

474
00:25:38,040 --> 00:25:41,560
Speaker 1: of dal Jones reporting that Google announcing that it will

475
00:25:41,600 --> 00:25:45,720
Speaker 1: stop selling ads based upon your specific web browsing and

476
00:25:46,080 --> 00:25:51,160
Speaker 1: story as well, I should say, pardon stay as well. Yeah,

477
00:25:51,280 --> 00:25:53,880
Speaker 1: good excellence. So I mean that that sounds big to me.

478
00:25:54,280 --> 00:25:56,600
Speaker 1: Um Alex, what do what do you make of that?

479
00:25:56,640 --> 00:25:58,600
Speaker 1: Because it seems like what one of the things that

480
00:25:58,640 --> 00:26:03,040
Speaker 1: these digital players pitch to advertisers is, hey, we know

481
00:26:03,400 --> 00:26:06,000
Speaker 1: where your audience is, we can track them. What do

482
00:26:06,040 --> 00:26:09,920
Speaker 1: what do you make of this news? So it's it's positive,

483
00:26:10,200 --> 00:26:12,200
Speaker 1: but there are heavy caveats here. The way that people

484
00:26:12,240 --> 00:26:14,800
Speaker 1: used to track, or that Google and any other ad

485
00:26:14,840 --> 00:26:17,960
Speaker 1: sex company used to target ads was to do with

486
00:26:18,040 --> 00:26:22,359
Speaker 1: third party cookies. This gobits of information that websites would

487
00:26:22,400 --> 00:26:24,720
Speaker 1: drop onto your computer so they could see what you've visited,

488
00:26:24,920 --> 00:26:28,359
Speaker 1: what your browsing activity was. Now, for companies like Google,

489
00:26:29,000 --> 00:26:33,119
Speaker 1: they actually sell most of their ads on their own website.

490
00:26:33,240 --> 00:26:36,320
Speaker 1: So if you try to search into Google for brown

491
00:26:36,359 --> 00:26:39,640
Speaker 1: t shirts, the results that it provides you, there will

492
00:26:39,680 --> 00:26:41,920
Speaker 1: be ads at the top of that. That's one piece.

493
00:26:41,920 --> 00:26:44,879
Speaker 1: Then there's also YouTube where it's you know, serves ads

494
00:26:44,920 --> 00:26:48,280
Speaker 1: based on what you're looking at on a Google owned website.

495
00:26:48,480 --> 00:26:51,560
Speaker 1: That is the majority of Google's advertising income. So when

496
00:26:51,600 --> 00:26:54,320
Speaker 1: it says it's not going to track you across other websites. Yes,

497
00:26:54,440 --> 00:26:56,879
Speaker 1: that might be true, but frankly, that isn't a terribly

498
00:26:56,960 --> 00:27:00,359
Speaker 1: lucrative business for Google. It makes money by essentially tracking

499
00:27:00,359 --> 00:27:02,520
Speaker 1: what you're doing on its own website, and that is

500
00:27:02,560 --> 00:27:04,679
Speaker 1: not going to stop. We're going to see the stopping

501
00:27:04,720 --> 00:27:08,119
Speaker 1: of tracking on third party website. Thank goodness, because as

502
00:27:08,160 --> 00:27:10,159
Speaker 1: a consumer, I love those targeted ads. You know, I

503
00:27:10,160 --> 00:27:13,600
Speaker 1: don't have to look all over the internet for my

504
00:27:13,680 --> 00:27:17,800
Speaker 1: next grateful dead trucker's cap because Google knows I want

505
00:27:17,840 --> 00:27:20,120
Speaker 1: it and it's already got like four ads displayed along

506
00:27:20,119 --> 00:27:23,480
Speaker 1: the side of my search results. Yeah, it's interesting that

507
00:27:23,760 --> 00:27:26,360
Speaker 1: you're actually in the minority there, Matt, because like it's

508
00:27:26,400 --> 00:27:29,000
Speaker 1: Google and Facebook, and thickly Facebook will say this, people

509
00:27:29,080 --> 00:27:31,840
Speaker 1: want to see targeted ads rather than see the not

510
00:27:31,920 --> 00:27:35,000
Speaker 1: targeted dads. But actually people didn't get angry when they're

511
00:27:35,000 --> 00:27:37,040
Speaker 1: watching television and in the ad break they would see

512
00:27:37,080 --> 00:27:39,080
Speaker 1: ads that were imperson into them. You know it is

513
00:27:39,240 --> 00:27:41,240
Speaker 1: this is the sort of fallacy that people prefer to

514
00:27:41,280 --> 00:27:43,680
Speaker 1: see targeted dads. It's like if they know they're being

515
00:27:44,160 --> 00:27:46,800
Speaker 1: except for me, I guess you're saying, but yeah, I

516
00:27:46,840 --> 00:27:49,639
Speaker 1: think you're the exception, if I think if they people

517
00:27:49,720 --> 00:27:51,840
Speaker 1: know they're being trapped and then they see an AD

518
00:27:51,880 --> 00:27:54,320
Speaker 1: that isn't personally to them, they get angry because they

519
00:27:54,320 --> 00:27:57,439
Speaker 1: sort of go, what does Google think I am in

520
00:27:57,480 --> 00:28:00,000
Speaker 1: the world? Words ads are not being targeted. People didn't

521
00:28:00,000 --> 00:28:02,560
Speaker 1: get creeped out or angry as the one relevant to

522
00:28:02,760 --> 00:28:05,440
Speaker 1: It's true ever since I had a daughter in October

523
00:28:05,480 --> 00:28:09,119
Speaker 1: and I've started getting like little princess ads exactly, and

524
00:28:09,400 --> 00:28:12,840
Speaker 1: they know where you live now. Alex Webb, Bloomberg Opinion,

525
00:28:12,880 --> 00:28:17,000
Speaker 1: Technology and Media column were columnists for Bloomberg Opinion. We

526
00:28:17,040 --> 00:28:19,720
Speaker 1: appreciate that. Again, a lot of changes in the digital

527
00:28:19,800 --> 00:28:22,560
Speaker 1: advertising space, and what we saw during the pandemic, Matt

528
00:28:22,640 --> 00:28:25,560
Speaker 1: was just an acceleration of the ad dollars away from

529
00:28:25,600 --> 00:28:30,120
Speaker 1: traditional media to these online platforms like Facebook. Like we'll

530
00:28:30,160 --> 00:28:31,879
Speaker 1: have all that coming up. Thanks for listening to the

531
00:28:31,880 --> 00:28:35,800
Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews

532
00:28:35,800 --> 00:28:40,120
Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm

533
00:28:40,120 --> 00:28:44,480
Speaker 1: Matt Miller. I'm on Twitter at Matt Miller three. Put

534
00:28:44,560 --> 00:28:47,160
Speaker 1: on fall Sweeney I'm on Twitter at pt Sweeney. Before

535
00:28:47,160 --> 00:28:50,320
Speaker 1: the podcast, you can always catch us worldwide at Bloomberg Radio,