Hidden Layer: Pay No Attention To The Man Behind The Curtain – On Facebook

“Pay no attention to the man behind the curtain.” – Oscar Zoroaster Phadrig Isaac Norman Henkle Emmannuel Ambroise Diggs, a/k/a the Wizard of Oz, f/k/a “Oz, the Great & Terrible”

This phrase from the book “Wizard of Oz” came to mind after Facebook’s recent earnings report and conference call. The plot of the book resonates for my take on Facebook: A quartet of lost souls travel together in search of answers, with a little dog in tow, on a long winding path, for wisdom, bravery, a heart and finally a way home.  They reached the end of the yellow brick road both enlightened and disillusioned about the answers they found ultimately.

Facebook’s shareholders and millions of users are now staring past the curtain. They came for answers, and just like in Oz, the results have not been as hoped for. Scott Galloway’s book, “The Four”  explained in visceral terms the allure of “FANG” companies Facebook, Amazon, Netflix and Google. Based on the book, it might be said that Facebook grew by tapping into our inner Tin Men – our hearts – in exchange for our privacy.

Let’s review recent coverage to get a sense of what is behind the curtain.

From Techcrunch:

Facebook’s  chief legal officer Colin Stretch has announced he’ll be out by the end of the year.”

“Facebook has had a very awkward two years so far as politically charged scandals go. First revelations about the massive Kremlin-fueled election interference which it totally missed. Then the massive Cambridge Analytica data misuse debacle which Facebook also claims to have totally missed, even though it (still apparently) employs one of the academics whose quiz app was the vehicle used to suck out people’s data.”

“Since then a bunch of follow-on admissions have flowed from the company confirming that access to user data on its platform wasn’t as locked down as it’s historically liked to claim — albeit, despite masses of evidence to the contrary.”

“In March it also emerged that Facebook would likely be parting ways with its long-time chief security officer, Alex Stamos, this summer — after the New York Times reported on internal disagreements between the CSO and other  execs, saying Stamos had wanted Facebook to be more public about the misuse of its platform by nation states.”

Regarding Stamos’ departure,  Gizmodo noted:

“Facebook’s departing chief information security officer Alex Stamos, whose upcoming exit has been known for months, wrote a note to staff in March amid the Cambridge Analytica data-sharing scandal urging them to reconsider the site’s approach to privacy, BuzzFeed News reported on Tuesday.

“In his note titled “A Difficult Week,” Stamos wrote that the scandal—in which Facebook’s reckless approach to sharing data on users allowed the sketchy political firm to acquire data on somewhere around 87 million users—as well as others such as alleged Russian information warfare on the site were the result of “tens of thousands of small decisions made over the last decade.”

“When it rains…” From the Verge:

“Just one day after Facebook gained permission to open a subsidiary in China, the government pulled the business filing and began to censor mentions of the news. An anonymous source tells The New York Times that Facebook no longer has permission to launch the startup incubator it had planned.”

And the most recent quarterly earnings report was accompanied by double-digit after-hours decline in share prices, after closing above $217 per share before the report. A recap from Ars Technica:

“As part of its second quarter of 2018 earnings announcement on Wednesday, the company trumpeted a huge jump in both year-over-year revenue (42 percent) and profit (31 percent).”

“But there’s also been a notable slowdown in user growth.”

“During a call on Wednesday afternoon, Facebook CFO David Wehner warned that investors should expect a slower rise.”

“Our total revenue growth rate decelerated approximately 7 percentage points in Q2 compared to Q1,” he said.”

“Our total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to decline by high single-digit percentages from prior quarters sequentially in both Q3 and Q4.”

CNBC report of the latest results included the following details :

  • Earnings per share: $1.74 vs. $1.72 per a Thomson Reuters consensus estimate
  • Revenue: $13.23 billion vs. $13.36 billion per a Thomson Reuters consensus estimate
  • Global daily active users (DAUs): 1.47 billion vs. 1.49 billion, according to a StreetAccount and FactSet estimate
  • North American DAUs: 185 million vs. 185.4 million, according to a FactSet estimate
  • European DAUs: 279 million vs. 279.4 million, according to a FactSet estimate
  • Average revenue per user (ARPU): $5.97 vs. $5.95, according to a StreetAccount and FactSet estimate

“Facebook said 2.5 billion people were using any of its family of apps each month, including Instagram and WhatsApp. Though Facebook-specific global DAU rates were up 11 percent year over year – with growth led through users in India, Indonesia and the Philippines – it was less than Wall Street was projecting.”

“Wehner also said the company expects margin compression, with operating margins trending toward “mid-30s on a percentage basis,” compared with second-quarter operating margins of 44 percent.”

“That tightening is the result of broadening markets, investments in news products — such as the recent introduction of the company’s long-form video format, IGTV — and capital expenditures related to safety and security that total “billions of dollars,” Wehner said.”

A drop in European Daily Average Users (DAU) was expected in the wake of the General Data Protection Regulation (GDPR). While the earnings impact was not material as of this latest report, management acknowledged that it was still early days regarding GDPR. Increased expenses for both new products and safety help to explain an anticipated drop in margins from the 40s to the 30s.

Stamos, leaving in August, may have inadvertently summarized in his March 23 memo what Facebook is doing:  “We need to deprioritize short-term growth and revenue and to explain to Wall Street why that is ok.”

Closing thoughts (written in fact a few months ago as my initial reaction to events surrounding Cambridge Analytica):  Recent performance of “FANG”-related shares in the market may invite growing regulatory response to their economic and information dominance. I wonder if what had happened to Standard Oil, AT&T, I.B.M. and Microsoft would be followed with more of the same for one of the “FANGs”? In addition to punitive fees and increased restrictions, could there perhaps be “breakups”, as had happened to Standard Oil and AT&T? (Baby FANGs someday?)

All eyes have all fallen upon Facebook as the curtain has been pulled open on the FANG nearest and dearest to our hearts.

(From investment firm Avory & Company, a table of the reported results.)

(The most recent weekly chart for Facebook. As of this writing, this evening after the earnings conference call, after-hour share prices are in the 170s, after briefly touching the 160s per share.)

 

Hidden Layer: Sapiens And Storytelling

Yuval Harari’s Sapiens is going to be turned into a film. The book has been included in many recommended lists among people I know, interact with. or follow on social networks — which seems appropriate given the message of the book: that Humanity’s history, in almost every aspect, has been driven by its ability to imagine and then share the fruits of that imagination.

Our past, present and future is bound together by a connecting thread of story-telling, and every institution, cultural practice, artifact, and shared memory is built on this. Our economics, religion, and politics are part of one never-ending tale. This is what we are doing in every waking moment.

Everything I have written about on “The Big Stack” has been on its surface about technology, history or macro trends in society or economics — but it’s really my retelling of a story. I have written about man going to the moon and A.I, animal spirits in the markets, corporate intrigues in old media, business models in “FANG” platform companies, scooter startups and most recently about eSports and communities. Everything has one thing in common: they are happening because of our social nature.

To borrow from the Wiki entry for “Sapiens”, “[T]he ability of Sapiens to cooperate in large numbers arises from its unique capacity to believe in things existing purely in the imagination.” I’ve written about different events but they were all riding atop the same base of who we are and what we do: we are individuals who must gather in groups, and it’s never a silent affair. We shout, whisper, squabble and share with each other relentlessly. Our stories awaken our spirits, bore us to sleep, drop us into a deep pit of rage or despair, or carry us with love in our hearts skyward— the sharing never ends. “We” is the pronoun which defines our existence on Earth. Birth and death are solitary — in between we have company.

A lot of popular personal and professional advice is about how to make the most of a situation, a moment or a place. The advice often includes how to navigate the unfamiliar — whether it’s a place, a country, a job, a country, a skill, or a relationship — our future. Eager to listen, in order to benefit. Driven to share, in order to serve. Often the advice is to join in the storytelling. We become our own best salesmen — We sell and tell ourselves tales of how we can survive, thrive and be more alive.

We cover ourselves in stories. We crave them. Great or small, long or short, every tale is cut from the whole cloth of boundless imagination. We can conjure empires of the future — and replace the truths of an ancient saga with new ideas and beliefs. Or we can tuck a whole era with just a phrase into our ear. We turn the restless hours between sleep into waking dreams. Species: homo narrator.

Hidden Layer: On eSports, Communities and Storytelling

“Streamland” is my label for content on demand. It is an immense and expanding domain. My recent studies of Netflix’s business model led to learning about Amazon’s “Flywheel”voice UX, augmented reality and a secular trend which could redefine sports entertainment. There is a realm within the borders of Streamland known as eSports which may be a catalyst for changing business models in content, creation and online communities.

A leading city within the eSports realm is Amazon’s Twitch platform.

In a recent interview, from the podcast “Investor Field Guide”, media expert Niel Robertson provided insights about what may happen for content. The interview was rich with commentary about potential future tools for community building, rewarding engagement, relevant for creators, influencers, established brands and would-be sponsors.

One of my takeaways included Robertson’s description of what constitutes valuable online space:

That the optimal operating space for influencers is a searchable one, which by definition is content-centric — such an environment is a “gift” from an SEO perspective. The best spaces are topic-driven communities with geometric growth. Examples of such communities included LinkedIn, Stack Overflow, and Behance (where their content silos included careers/professionals, code and design respectively).

Communities which have a defined content themes and high SEO value are where influencers thrive. Influencers have migrated from channels to becoming content creators on “platforms” which evolved into direct competitors for traditional media companies.

(Robertson observed how “tricky” B2B had become, where businesses may fall back to hiring a sales army or scraping LinkedIn for contact lists. Interestingly enough, the founder of Twitch, Justin Kan, recently wrote a piece with the complete opposite P.O.V. asserting his preference for B2B over B2C.)

One of the biggest questions has been how to give creators more ways to monetize themselves. Familiar examples have included webcam “end game gifting”, Youtube sponsorships, Patreon fan funding, Facebook’s testing of new tools like “Watch” to compete with Patreon, and Twitch’s “Cheers” and “Bits”*.

Creators as influencers want to know how to spark and grow engagement as well as how to get paid for their efforts. The most successful also wonder how to scale themselves and not be relegated to being paid arithmetically — i.e. paid by the hour or one-off projects/tasks.

(*Amazon’s contribution to monetization experiments included a November 2017 release of a reward feature on Twitch, called “Bits” on mobile apps, that was to be followed by subscription gifting and paypal-enabled “Bits” purchasing.)

Robertson’s prediction for influencers is that some will become stand-alone platforms who will then find partners to help monetize all the eyeballs in their respective communities. This perspective informs his views about Amazon.

Amazon, with various businesses tucked within it, has a “sleeper” hit with Twitch. I agree with the view that goals for Twitch include scaling its platform, with all its nascent communities, and figuring out monetization. One of Amazon’s biggest potential advantages for these goals is its native commerce integration. But it’s not alone. Other successful platforms like Instagram are filled with communities and are also working on native commerce.

Another potential piece in the puzzle for Creative-Community-Commerce business models could be from another buzzy trendy field: crypto. “Tokenization” could be used for embedding economic rewards for participation and membership in a community. I am self-conscious given the trendiness of the phrase at the moment but let’s use it as a placeholder to describe an emerging business model for social-networks/communities.

Why did Robertson bring up this trendy topic? He observed that early members of LinkedIn, whose first million members helped enable the scaling of LinkedIn’s community — and therefore its business value — were not directly compensated. I understand that a natural reaction to this observation is that “hey, they probably got jobs or connections out of it”. Maybe they did, but a little more direct reward wouldn’t have been refused.

In the future, communities, like LinkedIn, could be granted virtual assets along their accounts which would be cashed in upon a liquidity event. Just as new ventures may have had “advisor shares” as compensation for some early parties, tokenization-based solutions could be rolled out for community members. Such tokens representing a stake in a community, could rest on protocols rewarding members for active participation (i.e. engagement).

With these observations in mind, let’s transition to one of the largest communities which exists on multiple platforms: eSports. This community’s explosive growth has been driven by pop-culture’s migration into games designed for both viewers and players. Fortnite represents the current state of games, and New York magazine’s “How ‘Fortnite’ Became The Most Important Video Game On The Planet” describes what might be the latest killer app in eSports:

Fortnite has risen to become the most important video game currently in existence. The 100-player, last-man-standing video-game shooter is obsessed over by rappers and athletes, hotly debated in high-school cafeterias, and played by 125 million people. All this, not because of a major technical or graphical breakthrough, or for a groundbreaking work of narrative depth, but for, essentially, a simple, endlessly playable cartoon.”

Fortnite is less game with a popularity half-life and more akin to “social platforms with bright, sunny aesthetics that constantly add a rotating and growing set of features that keep users coming back, building up a platform-specific identity, provide better points of comparison than other video-game shooters. Fortnite is a candy-colored video game populated by friends and celebrities, with quantified metrics for success tucked into every corner, constantly updated, highly social, usable anywhere, dopamine-releasing, and extremely competitive. In other words, the way to think about Fortnite isn’t Halo, but Instagram.”

Why does this matter? In an industry estimated in the piece to be about $130+B USD in size, the game currently has a monthly run rate of $300M USD.

community growth has stimulated experiments in engagement. These experiments are also a quest for new kinds of monetization.

This explosion in eSports contains hints about the future of content, communities and commerce. There was a nifty March 21, 2018 Medium piece by decentralization specialist Alison McCauley, “Are Gamers Poised To Shape the Blockchain Tech World” which tied in the potential cross-current between gaming and crypto.

McCauley cites gamers as an early adopter vanguard for “fully decentralized applications and services”. Her reasoning cites gaming’s 20 years of experience with virtual assets, a willingness to adopt and experiment with minimum viable products before more accessible products are available for mainstream users, and their collaborative potential as marketing and educational evangelists for gaming-related ventures with funding (i.e. gaming ICOs).

I want to suggest the implications for future creator-founded communities, led by various kinds of creatives: artists, musicians, writers, and celebrities. The concept of “1000 True Fans”, written about a decade ago, helps to describe how creators have been able to build businesses from a sliver of a broader population in contrast to large corporate brands and their need for scale. Both “1000 True Fans”-style and large social networks the size of LinkedIn have one thing in common — the need for economic sustainability to continue existing.

The economics of “1000 True Fans”, where a hard-core following of super-fans economically support a creator, dovetails with a recent piece on a “shared values community” business model suggested by Eric Feng. Feng recounts how not all content is subsidized by advertising. The basic idea is that a core base of a creator’s audience is willing to pay for a creator’s content and experiences, which subsidize free offerings for a creator’s broader following/community.

Feng set the stage for his “shared values” economic model with what the market has at the moment:

”…advertisers respond by turning up the volume, which make you tune out more, and advertisers respond by screaming at you louder and more often, which makes you tune out even more. Rinse and repeat until you hate ads.”

“What if instead you had a business model that could maximize revenue from your best customers, and then share that value across all your customers, while not annoying users in the process? Sounds good right? Not only does such a model exist, but it’s being used by many companies to great success. I’ll call this strategy shared-value transactions.”

Feng uses free mobile games to illustrate this potential new economic model:

“Users can optionally pay inside the game to enhance their gameplay. Less than 2% of free mobile game players end up making in-app purchases. And of these users who pay, the top 10% of them drive an astonishing 50% of all revenue for games.”

“So an entire industry is mostly built off of a tiny fraction of a percent of its users. How? Because their very best users are delivering 1,000 times more value to their business than their average user.”

“Again, a company’s best customers are many many times more valuable than their average customer. If you can find a business model that allows you to take full advantage of that disparity, you unlock economic value for everyone: yourself, your current best customers, and all the rest of your customers who one day could grow into your future best customers.”

We are onto something here. We see that free games could work without ads.

We understand that communities can become scalable and that some economic tools already exist to start them and then monetize to some extent and reward some stakeholders. At the same time, models for decentralized business and social platforms is under development. What happens if we incorporated the idea that everyone within an online community would be rewarded for their membership?

What happens to a community, started by creatives, and evangelized by early adopters and “True Fans”, then had the means to reward all of its members based upon their level of engagement? A completely engaged community, where all stake holders are rewarded both emotionally and financially, is a powerful economic model for creators and platforms.

This is an appealing notion for future communities: that a platform could offer a direct incentive and reward for engagement — with everyone from the semi-regular up to the most prominent of influencers sharing in the economic success of a platform.

I suspect that Amazon’s Twitch could represent a prime (no pun) example of a test case for this idea. Let’s go from the abstract to the real to understand Twitch.

I want to start with a few bits from an interesting academic paper from Temple University, that covered Twitch — a thesis paper from Fall 2017, entitled “Managing the Popularity of Streams in the Twitch.tv Gatekeeping Network”. This paper describes the impact of all the players in Twitch’s ecosystem. Entities called “gatekeepers” included: “game publishers, individual streamers, viewers, and Twitch as the platform provider”.

As expected, there was no overlord: “gatekeeping is exercised in a multidirectional way in a networked environment rather than a unilateral one.” In case you were thinking (as I did) that Amazon, a/k/a Twitch, called the shots about what content won out, the paper’s “findings question the effectiveness of the Twitch strategies to draw audiences to certain streams, as the audience has proven to be neutrally affected by the hosting strategies of both the streamers and Twitch.”

“…similarly to the long tail effect happening in satellite TV, it was found that “The top 10% of games collect 95% of all viewers […] Alone, the top 10 covers 64% of all viewers.”

This implies that the type of content matters: in other words, not all games make for a suitable spectating experience, and not all games succeed in building a sustainable and stable audience for itself through its streamers. This is already implying the existence of gatekeepers who act to polarize the viewership around a minority of live channels. The reasons however differ and are the result of several factors combined (money invested, time invested, promotions, sponsorships, etc.)”

Creators, including brands, influencers, and platforms, must make content that inspires engagement and cultivates “true fans” important for all communities:

“There is a personal relationship that rises between the streamer and his audience who can shift the motives of spectatorship from casual watching to fandom. That is what happens today when a spectator presses the follow button on Twitch, then donates, and subscribes.”

“Fans today relate to the streamers and their personalities and the way they comment their own gameplay. Thus, the streamer is playing an active role in the success and popularity of his own channel in the long term.”

This chart of Fortnite compared to other games confirms a pareto-like distribution for top games.

Jeremy Hsu’s August 26, 2016 Wired piece, “Twitch Could Be a $20 Billion Company Inside Amazon”, which made some good observations:

The piece highlighted why Amazon may not have overpaid with its $970M USD acquisition of the former “JustinTv”, and that it was right to catch on that eSports was a spectator sport growing that just getting started. Much in the fashion of Facebook’s acquisition of Instagram, the purchase reflected an understanding of eSports’ potential.

“Twitch’s live streams still have a much smaller viewership than YouTube’s videos, according to Newzoo.”

“But Twitch’s viewers stick around longer — seven hours per month on average versus less than five for YouTube — and they are more active, posting chat messages and questions for their favorite streamers, buying animated “cheer” emotes to display in Twitch chat, and even donating money to Twitch personalities as a way to thank them during their live streams.”

“The active engagement of Twitch viewers can often help boost sales for games that prove popular among live streams. Twitch data scientists have attributed as much as 25 percent of certain game sales to increased visibility through the live streams. The most fervent Twitch viewers, who watch live streams daily, are also among the biggest spenders on games, says Pieter van den Heuvel, eSports Team Lead at Newzoo.”

Investment firm Krueger & Catalano researched eSports for a few months and generously shared its findings. Firm principal Ryan Krueger shared some great insights:

“Daryl Morey, the General Manager of the Houston Rockets … has completely revolutionized my favorite game of basketball. But, he’s not done. He now compares the growth opportunity of esports to 1950s basketball. Morey explains, “I say it all the time because it’s true: The three dominant sports in the future are going to be soccer, basketball and esports.””

More than 2.4 billion minutes per month were spent watching esports on Twitch alone last year. Each unique viewer watched 60 minutes per day.”

As 2018 began, they were at 7 billion minutes per month and 105 minutes per day per unique. A wider audience and deeper engagement?! Other traditional sports can only imagine what that trend would feel like anymore.”

The eSports community has a powerful engagement motor on Twitch thanks to its inclusiveness and potential for aspirants — with fan-pro interaction and where the odds of fans becoming a “pro” is considerably greater than in conventional sports. The audience is global, dwarfing audiences in sports and rivals other online platforms.

Amazon is not alone in its eSports ambitions. The Chinese eSports market is the world’s biggest at 225+M gamers, poised to hit over half a billion gamers in 5 years.

Chinese internet company YY’s gaming platform, Huya, which secured in May 2018 a substantial investment from Tencent Holdings (along with a first right to assume a 50.1% control position) offered a glimpse into a great world in a recent SEC filing. “Fintwit” member Bluegrass Capital highlighted impressive metrics in what are still early days. Huya’s filing reported that in 2017, two eSports leagues had total viewers of 176 million versus the NBA and CBA’s combined 2017 total of 72 million viewers.

These eSports communities may lead the way for other communities in terms of business models, and the eventual roll-out of new community building tools.

One cautionary word about one of the building bricks of communities: content. Robertson had one last nugget of advice — he cautioned that the downside of recent trends in content marketing has been “soulless” content, and that is why a focus on engagement is important.

Content with a soul means engagement, and that could lead to conversations, including discussions inspired by longer form content. The technical shortcuts of “h1 leaders”, backlinking will become less successful but a focus on STORYTELLING “showcases” content “with soul” for communities.

Different channels will all be encompassed as elements for a larger funnel for monetization purposes. And one successful business model will be that truly high value content will be set aside for premium offerings. Much as consumers were willing to pay for ringtones and some apps, content subscriptions could become the new “ringtones” — a premium product.

My take: engagement reflects the strength of storytelling and content with a soul. The fruits include greater connections with followers in a community and greater value.

Let’s return to Ryan Krueger who shared an eSports engagement story. He begins with the scenario of a basketball fan having the chance to shoot hoops in front of everyone with Lebron James himself, and translating that into the eSports version:

“Did you see the ticket holder who checked himself into the game right before Lebron’s buzzer beater last week? Yup, he walked right out of the crowd in a sparkling new arena, and got to play. The game was broadcast to a record shattering audience.”

“In case you missed it, imagine how it felt to reject Lebron’s shot, take it the length of the floor, and dunk on one of the world’s greatest to ever play the game. If a fan has a chance to do that, imagine how much more and longer anybody watching would want to keep playing that sport. What if I told you it was a 14-year old boy, how much more inclusive would that sport seem all the sudden? If you were another kid watching this all actually happen, imagine how many more new sports dreams were just hatched.”

“The sport is esports and this kid just beat its Lebron. He got to play a guy named Ninja in a game called Fortnite. More kids I know play Fortnite than basketball. So, believe it or not, they would tell you this ridiculous comparison I make to the NBA is actually understating the future of esports and the excitement this event caused for the 670,000 viewing audience on Twitch. Ninja offered to not only play against this kid and others, but pay them if he lost or pay Alzheimer’s research charity if he won.”

“Ask a kid who plays Fortnite (but I repeat myself) if I am exaggerating with my comparison. Then imagine if, after getting beat, Lebron posted the video for all his social media followers. Ninja has 9.5 million YouTube subscribers he shared the smiles with. That Cavaliers buzzer beater had the most television viewers for a NBA first round playoff game in six years, with 6 million viewers.”

For some context, some observations from New York Magazine:

“Ninja, whose real name is Tyler Blevins, makes an estimated half a million dollars every month streaming Fortnite rounds on Twitch, a service for livestreaming video games that is owned by Amazon… Most of Blevins’s revenue comes from Twitch subscribers and YouTube ad revenue, though he also earns money from product sponsorships and when he wins tournaments.”

““When NBA players started playing, like Kyle Kuzma and Paul George, and when Drake went on and started playing, too,” said Chris Marshall, a global-history teacher at Bronx Leadership Academy II, “that’s when the momentum really started to pick up because then [my students] saw, like, Guys who I already think are pretty cool are playing it as well.””

Magnify this by millions of members to get a sense of the potential of what’s going on at Twitch, Huya and in fact all platforms built on communities. The most successful communities have elevated levels of engagement, which can feedback into vibrant communities continuing existence.

Interaction with followers, as a part of an influencer’s role as a content creator and community leader, is part of a new kind of storytelling. And let’s extend this notion further to those who view themselves first as creators but also understand and embrace their roles as influencers and community leaders also engaged in storytelling.

Platforms can’t grow without engaged communities, and they need great content — in all its various forms. That engagement could then be spurred on with rewards of a decentralized and precise nature for all participants. Storytelling, authenticity and originality will have expanded benefits. Storytelling with a soul can still succeed.

That said, humans better pick up the pace and keep raising their “game”.

A side-note №1 — Not all Influencers Will Be Human:

Streamland is open not just for eSport pros and creators of engaged and financially rewarded communities. The Machines are coming.

Virtual influencers are here, along with the emerging economics of what seems like a contradiction: crowdsourced individuals. They can exist and work on different projects and platforms simultaneously theoretically forever.

“With potentially different humans controlling different skill sets of your celebrity, you then have the potential to close the gap from influencer / social media personality to mainstream talent. With digital celebrities, no longer can you age out of your demographic. You can freeze time, fast forward, or rewind, creating both a more relatable character as well as a much more in-depth storytelling mechanism where history, present, and future are all available for creation.”

“In addition to having the ability to scale talents, digital celebrities can scale utilization. While scarcity can drive the price of services up for a celebrity, there are some where volume is what creates revenue. A recent example of this is when famous Twitch streamer Ninja took 2 days off from streaming and thus lost 40,000 subscribers, costing him over $100k.”

“When multiple people can utilize a likeness across different talent classes, you can imagine the possibilities that are unlocked by removing the volatility and deficiencies of humans. Now these celebrities can be on tour, while filming commercials, modeling their new fashion line, or even starring in their own TV show or movie.”

Side Note №2 — MAYBE NOT all Movie Studio Execs will be human either:

And it looks like we not only have virtual stars, we may have virtual Movie Studio execs. No more cigar chomping power brokers.

There was a July 5, 2018 piece citing Variety called “In The Future, All Your Favorite Movies Will be Greenlit By Artificial Intelligence”:

“ As reported by Variety, during a presentation at the Karlovy Vary International Film Festival, Nadira Azermai introduced the artificial intelligence known as ScriptBook to the world. According to her, this program has the ability to predict the box office success of any pitched screenplay. While analyzing Sony Pictures’ production slate between 2015 and 2017, ScriptBook retroactively predicted the failures of 22 out of their 32 financial duds. Not perfect, but not bad either.”

“The way ScriptBook works is that users upload a PDF of the screenplay, and after about five minutes, an analysis spits out. I imagine something akin to the Siemens Systems 4004 ‘Super Computer’ used to predict the precise location of the Golden Tickets in Willy Wonka and the Chocolate Factory. Maybe more successful than that irritant. Not only does ScriptBook reveal the financial probability of the screenplay in question, but it can also predict the MPAA rating, determine the emotions of each character, and separate the protagonists from the antagonists. Then ScriptBook selects the target audience, including gender and race.”

Side Note № 3 — Sorry Bender, Must NOT FIRE all humans (in game design):

While data driving decisions and creation ascends , I want to circle back to game design with an observation from Niels Hoven. Hoven, whose site focuses on product, drew some game design lessons from his observationsabout Zynga’s rise and subsequent challenges:

“Zynga had been around for about 5 years, with a peak market cap over $10 billion, and the company’s success had been repeated on a smaller scale by other strongly “data-driven” gaming companies on Facebook and on mobile.”

“However, an interesting trend was beginning to occur, with new games like Dragonvale and Hay Day dominating the mobile charts with innovative mechanics supported by a single, unified product vision.”

“Purely metric-driven iteration with no vision or direction could bring a product to a local maximum, which was good enough in the very early days of mass-market casual gaming.”

“But as the market matured and competition intensified, a local maximum wasn’t good enough. Derivative products and products developed by only metric-driven iteration were vastly inferior to products driven by a strong creative vision from their inception, like Supercell’s Clash of Clans or Pocket Gems’ Episode. That vision was a necessary prerequisite to create a product strong enough to land at the top of the charts.”

Hoven’s cautionary advice for game design is that it’s still Man over Machine.

You get paid in the long run not by pushing live derivative products. You can’t scale communities on content built on cynicism. Love comes before the “likes”.

Let’s close with the following: Storytelling With A Soul Still Succeeds.