Welcome to Scotch & Watch where I talk to the most interesting people in media and tech to eke out the deets that might just help change our industry for the better.

As most of you know, I usually have a scotch in hand, but today I’m speaking to an Aussie success story so it’s too early - but there’s still plenty of spice ahead.

Let’s set the scene.

Mass media is dwindling. Search traffic’s falling. Audiences are fragmenting. Ads are monopolised by Big Tech. And AI means the old tricks we used to rely on just don’t work any more.

Digital and data has atomised what was a huge homogenous audience into billions of individuals, each laser focused on the things they care about most.

This signals a sunset of mass media and old ways of monetisation, and rising in its place is masses of media - hyper-targeted, audience-first, and attuned to you and me.

I’ve been tracking this trend since I quit as a news editor at News Corp a decade ago.

When I resigned, the then CEO asked me to present my predictions to the editors and leadership team I was leaving behind.

My presentation was called Whispering in the Ears of Billions. It warned that newspapers, mags and TV shouted at crowds and hoped they were interested. We then measured that in circulation and ratings, and that was what we sold.

Digital data would change that, I said, and we should use the tech to listen to our audience to understand what they wanted - then personalise our output to them.

Fast forward and that’s what’s happening. Big media is going backwards, and smarter data-driven audience first publishers are thriving.

Today I’m nerding out with one of them. Mamamia is an independent publishing phenom in Australia.

Founded by former mag editor Mia Friedman in 2007, it’s grown into a $100 million empire and the country’s dominant women’s media publisher.

It’s a powerhouse that services the need states of 7.5 million women from broad interests to tiny niches.

It has 160 staff, produces 60 podcasts with 1.5 million listeners a month, 450,000 newsletter subs, two million monthly users on the web, and just launched an exercise app that inspired 100,000 workouts in the past year.

I’m thrilled to be joined by the CEO Nat Harvey and the COO and chief product officer Luca Lavigne to explain how it’s grown from a blog into a blockbuster, and where they’re putting real money bets on the future.

First let’s welcome new subs from the leadership team at Korea’s newspaper of record The JoongAng, the marketing team at YouTube in San Francisco, Cloudflare in New York, the Perseverance Mars rover team at NASA, BBC Studios in London, the Al Jazeera field production team covering the war in Ukraine, the competition law team at Hong Kong University, indie publisher The Spinoff in New Zealand, and age verification software Yoti in the UK, among others.

Let’s get to it…

The Big Story: Mamamia, here we grow again

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I was bouncing around LinkedIn when I chanced upon a post by one of the smartest people I know.

leads audience development for global media group Bauer, and he was pondering the future of search.

He’d been triggered by a Guardian investigation revealing Google’s AI Overviews was recommending a dangerous diet to cancer sufferers.

I’m obsessed with AI Overviews and the double-jeopardy it presents to publishers.

It’s efficient and easy for consumers but steals publishers’ work and often gets facts - sometimes dangerously - wrong.

Stu’s insights blew my mind. AI Overviews - and its big brother AI Mode - can’t be Google’s end game, he argues, because it kills its US$198 billion search ads cash cow.

Instead, his money’s on a beta project about to emerge from Google Labs.

First, welcome to new paid subs from The Daily Telegraph in the UK (currently an acquisition target of the Daily Mail), the leadership of USA Today, the AI Institute of the University of New South Wales, Influencing.com, and the leaders at prominent international strategic communications and reputation management consultancy Instinctif Partners in London.

And a flood of New Year free subs from Getty Images in New York, Sky UK, Politico in London, the Independent Media Association representing 75 British publishers, the children’s rights ombudsman in Luxembourg, the very fit team at the Australian Football League (AFL), The Technical University of Denmark, senior analysts from the media team at Citi, major UK lifestyle and fashion publisher SheerLuxe in London, the research team at strategic insights leader Equation Research, Hollywood talent management team at Brillstein Entertainment, UK creative agency Agency MB, and one of the leading lawyers working on GDPR in Europe, along others.

Let’s get to it…

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Tonight, Chris Duncan, former MD of The Times of London and ex-CEO of Bauer Media and I are focused on Australia’s world-first move to restrict under-16s from holding accounts on major social platforms.

It’s a controversial world first policy that’s already triggering platform pushback, legal challenges, and a predictable wave of workarounds.

But the real question isn’t whether the rollout is messy on day one. It’s what success actually looks like - and who gets to judge it.

We unpack the first-order tests: How many underage accounts are removed, what compliance reporting looks like, and whether government is willing to prosecute when outcomes fall short.

Then we move to the harder part: the second-order effects - displacement to other apps, shifts in online behaviour, and whether marketers and regulators start treating youth targeting as phase two of the crackdown.

In other words: What gets measured, what can’t be measured, and what evidence would convince us this intervention is working, or failing.

Thank you to everyone who tuned in tolive. Join me for my next live video in the app.

Get more from Ricky Sutton in the Substack app

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It was early - 4.45am - but I was up and about because I was preparing for a very special interview with the Kiwi co-founder of Substack itself .

Substack’s growing fast. It’s now one of the largest news sites in the world, leaving many of the world’s most famous brands trailing in its wake.

Hamish is one of the more thoughtful voices on the future of media, and we’ve compared notes several times over the years.

But with traditional media in a hole, Substack on the rise, and a new funding round in the bank, he’s now looking at ideas for better monetisation - and was willing to share.

• Substack has passed five million paying subscriptions.

• Sponsorships, ticketing, merch, paid recommendations “are interesting”.

• Advertising is over for publishers “because Meta and Google exist”.

• Programmatic ads are a hard no and “monetising Notes” is out too.

• Winning on Substack is about “earning and maximising trust relationships”.

• Many writers are now getting “really wealthy and accruing power”, and

• It’s easier than at any time in history to “make a living from the media”.

I also share my experience of quitting big media to build my own audience, and how I’ve diversified to generate my personal income from Substack.

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Thank you to , , , , , and more than 100 others for tuning into the chat live via the Substack app.

Thank you to paid subs from the C-suite at UK telco BT, from Condé Nast in New York, another from Yahoo Finance in San Francisco, and also from The Daily Mail in London.

And g’day to new free subs from the UK’s Department for Culture, Media and Sport (DCMS), Amazon in Seattle, FIPP (the International Federation of Periodical Publishers) which represents more than 700 global publishers and is celebrating its centenary, Turkish news outfit and streamer TRT World in Istanbul, Lauren Schell Creative in Toronto, award-winning production company Bondi Rocks Media in Sydney, and newsletter MyFrenchLife. among others…

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Headlines

🚨 Here are breaking headlines from sources you can trust

• Meta, ByteDance, Google and Snap facing new trial over addiction - Bloomberg

• Epic Google deal in doubt as judge doubts they’re “suddenly BFFs” - The Verge

• OpenAI seeks government backing to boost AI at $1 trillion valuation - Barrons

• YouTube TV pays customers $20 to apologise for Disney blackout - The Verge

• Spyware stole personal data from Samsung smartphones for a year - Ars Technica

Got a story?

Kill your commute

🫣 Watch: AFP tells me how its retraining 17,000 in 150 countries for AI’s future.

📖 Read: Publishers debate whether Discovery has become a “worthless dopamine hit”.

📻 Listen: Social justice groups sue ChatGPT alleging it acted as a “suicide coach”.

Listen to my pods on Substack

The Big Story: Founder’s four new ideas for monetising Substack

We began by sharing what we’ve been hearing from publishers. More and more of them are giving Substack a go, and inviting their journalists to give it a go.

Hamish shared that he’s saying that too, but the real power was accruing to independent writers in the creator community - many ex-journalists like us.

Hamish: “One simple way to talk about it is that Substack is new land to build on, and that there’s never been a better time to build a media business.

“Whether that’s a traditional publisher built for the previous generation - on models and assumptions that made sense 100 years ago that’s adapting to this new world…

“Or for individuals who see an opportunity to build their own little empire or even something quite big - a new institution - there has never been better infrastructure for starting an outlet like this.

Chris: “There’s never been more ability to start a media company in a day, and to have access to publish in different formats - video, live, audio - and get it to an audience.

“It’s a greenfield site where people can experiment and see what this form of publishing looks like.”

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I asked Hamish about Substack’s momentum.

“Honestly, this might sound like overstating it, but I think it’s more than momentum. I think it’s a revolution.

“There’s more than five million paid subscriptions on Substack now. They didn’t exist eight years ago. It’s a found economy, and that’s not slowing down. The growth is very consistent.

“It’s not about bloggers suddenly being able to make money. It’s about writers generally getting autonomy and power that was previously blocked off to them because of the whole infrastructure they’re operating within.

“Not because that infrastructure was evil, but it favoured centralised institutions. Now we’re in an era where independents can build the next kinds of institutions.”

Next we talked about Substack’s secret sauce, because the landscape is littered with failed attempts to scale independent journalism.

Hamish said they had learned a lot from others’ failed attempts: “Timing. We learned from those who came before, including traditional media.

“We didn’t start with foundational technology. We’re not innovating tech that much. Live video existed already for example.

“But we’re building an entire system, and the system starts with the business model, which is simple and transparent and it works.

“Getting the business model right has been fundamental to laying the groundwork for what follows.”

Next I asked him whether he believed writers can make a sustainable living on Substack, and whether he was looking to extend its monetisation models.

Hamish: “You can look at the leaderboards ranked by revenue. That’s why you’re at 97 today and you’re going to be at 54 tomorrow.

“The Free Press is at the top of politics. It has about 50 staffers and just sold for $150 million plus to Paramount (which I reported on a fortnight ago).

“Below that, you might see an individual like Heather Cox Richardson with maybe one assistant - a very different model - who’s clearly making millions.

“It’s not only possible to make a living, it’s possible to get really wealthy and accrue power you can share with others.

“Deeper down the leaderboard you’ll find many making good livings whose names you might not recognise across fashion, finance, business, technology and so on.

“What’s happening is the support of a new creative middle class. The numbers don’t have to be crazy. You don’t need millions of YouTube followers before monetisation.

“Start now, build an audience. Get 50 subscribers, five might pay, and you’re earning something you can reinvest or pay bills with.

“Get to 1,000 paying subscribers - it’s hard, not everyone does it - but it’s much more attainable than millions on YouTube. Then you’ve got enough to live on.

“Direct subscriptions align the publisher’s interests with the audience’s. The audience is the customer, not the product. That’s key to the cultural shift. But having subscriptions as the bedrock doesn’t foreclose other monetisation options.”

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The three of us then discussed whether subs was a better incentive for premium journalism than advertising.

Hamish: “I think the financial model makes it very realistic for many more people to make a living from doing media work than has been possible at any point in history.

“When it comes to other monetisation forms, direct subscriptions are incredibly powerful and interesting and make sure that the publisher’s interests are aligned with the audiences’.

“The direct subscription model really makes the audience the customer instead of the product, and that’s key to a whole audience sea-change in culture that platforms like Substack allow.

“But that’s not to say we’re against other forms of monetisation, but it’s the bedrock.”

Next we discuss how digital advertising corrupted the open web, and how Substack intended to avoid creating similar toxic incentives.

Hamish: “Fundamental to everything we’re trying to build at Substack is creating a better, healthier environment and discourse system than traditional media.

“Monetising from advertising is one thing, but that game is basically over for traditional media because Facebook and Google exist.

“It used to work in the pre-Facebook and Google days because you could build a monopoly in a market and then Macy’s would buy an ad.

“With social media, everyone could have a voice, but the power still accrued to a few at the top, so you didn’t have true democratisation.

“Direct subscriptions are people subscribing to the writers, not subscribing to the platform. That gives direct power to the writers.

“They’re the best proxy we have found for a trust relationship, where writers actually have to earn the respect and trust of an audience over time and hold on to it.

“That requires a different kind of behaviour from the publisher than trying to win a moment in a timeline or a news feed on social media.

“If I had to crystallise the difference with Substack, I’d boil it down to those trust relationships being at the centre of everything.

“And incentivising and creating a different kind of culture entirely.

“If you hang out in Substack, even in the notes feed - which is noisier than the quiet inbox space - the culture is just totally different.

“It’s worlds apart from what you find in Twitter or Facebook or Instagram.

“And that’s because the way to win the Substack game is to maximise the number of trust relationships you can earn.”

Next, I share how I cracked monetisation after two years of trial and error, and explain why I share it with everyone .

“I had no intention of turning on paid subscriptions when I started, but six months in, one of my readers sent a note saying:

“I can’t continue in good conscience reading your newsletter that I value for free.” He then paid me $480, which was a totally random number.

“The result was that I felt permissioned to turn on payments, and told the newsletter’s audience - which was then nearing 1,000 subs - that was what I intended to do.

“Suddenly, other people started paying. Now about seven per cent of my audience pay, and many of them pay more than I charge through founder subscriptions.

“That was mind-blowing and made me feel validated and valued because it was voluntary.”

Hamish: “It’s a different game. You’re trading on your credibility and your integrity, and you don’t get that with one tweet. You don’t get that with a viral moment.

“Something going viral can still serve your need, but your reward is not just internet points.

“It’s some portion of the people who saw that viral post become your sustained and retained subscribers over time.

“And that connection with your audience is your insurance from the volatility of the cruel world and the current media environment.

“People wanting to pay you more than you charge is such an interesting dynamic. I’m so glad that has been uncovered about the world to be a true thing.

“Looking at it as a subscriber myself, I don’t begrudgingly pay for my favourite writers on Substack. I’m enthusiastically paying for them because I feel I’m participating in the mission and the cause that they represent.

“And my act of paying - or just giving my email address - is also like a form of paying and supporting them. Sharing their work is another way of paying them. Through that I’m actually helping to shape the culture that I want to exist.

“While it looks like traditional media in some ways, or it looks like social media in other ways, the whole game is fundamentally different.”

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Next, we talked about new monetisation ideas, interrogating whether subscriber bundles might be a growth engine.

Hamish: “Media nerds like us really feel the pain of too many good things that we want to pay for, which starts to add up in the bank account. And one of the things that I think of is: Well, thank f*ck. About time!

“Good culture, good writing, good journalism, which helps shape how we think and who we are in the world, has for too long been totally undervalued.

“It’s nice to have some sort of correction in that direction. People think nothing about paying £7 for a pint, but the piece of writing that changed your life, has to be worth more than one pint a month.

“So, I like the direction it’s going. At Substack, the bigger problem is getting one person to subscribe to more than one thing.”

He then shares some of the ideas the Substack team are working on.

“Because of the design of the platform there are some interesting ways to approach bundling that become possible in ways that were difficult or impossible in social media and even traditional media.

“We’re not starting work on that. It’s still in the: Isn’t this interesting as an idea category, but there are two things that are kind of interesting to imagine.

“One is having a network of Substacks where someone who subscribes to one gets a cheaper rate for the second, third, fourth and fifth ones.

“Or maybe you want to team-up with your mates and offer a special deal for all your Substacks together.

“Another is what if you as a subscriber pay a set amount - say $50 bucks-a-month or something - that gives you access to a number of Substacks and you then decide which get the credit or the money from the payment.

“The thing that we want to be careful about doing is not undermining the secret sauce - the direct relationship between the publisher and the audience.

“If we become like Spotify or Netflix, where we are deciding how attention and money is distributed, then I think we undermine something very important.”

Next we discussed how Future Media went from my side hustle to a full time job that sustains my family of three children.

How it expanded organically from voluntary subscriptions into scaling subscriptions. That raised awareness which led to $1,000-a-month syndications to other news outlets.

That grew an influential audience, and when it passed 3,000 two years in, I began selling $20,000 monthly sponsorships.

As word spread, the quality of interviewees rose, leading me into podcasting. As that grew, it led to a world tour of live pods (London, Paris, New York, New Orleans, Madrid and Sydney).

That then led to multiple lucrative paid speaking engagements (US$15,000), addressing the United Nations and a Netflix documentary in Cuba.

And then to consulting.

We discuss how Substack has taught me to run my personal finances like the P&L of the major media companies I used to lead.

In order of value, my earnings now come from public speaking, followed by consulting, sponsorships (newsletter and podcast), subscriptions, syndication,

All of these things have been created and enabled because of the credibility I received from scaling a valuable audience on Substack.

Were there clues in there for Substack, we wondered.

Hamish: “We’ve been pretty public about being interested in sponsorships. We raised a round of financing in July and announced it.

The New York Times hyped it a little bit saying Substack is getting interested in advertising. What we’re interested in is sponsorship that gives more power to writers.

“We would give them control and the lion’s share of the revenue of that money. That’s something that Substack is uniquely placed to help writers with, and set parameters around so it doesn’t degrade the experience for subscribers.

“You can imagine Substack could one day make it simple for you to connect with a sponsor in a way that feels good to you, the writer, and you get to say yes or no to them.

“There might be certain rules. Maybe you can’t put that sponsor in the paid version of your newsletter, only the free version.

“But there’s so much to be determined and discovered about that. Anything I say about it should be taken with a grain of salt.

“But I definitely think that once you’ve got a direct audience relationship and trust over time, then it’s a foundation for all sorts of monetisation opportunities.

“Direct subscription is the enabler, but sponsorships are interesting. So is ticketing, and merchandising. There are all sorts of possibilities.

“We’re definitely not saying programmatic advertising. That doesn’t care about the sacred relationship between a publisher and their audience.

“And we’re not talking about monetising the notes feed, or the social networking features.

“Perhaps there’s a way that writers could promote themselves or each other through the social features?

“Recommendations exist at the moment. Maybe there’s a paid recommendations thing in the future.

“I’m speaking about this all hypothetically, we don’t have any concrete plans, but these are interesting thoughts as the ecosystem matures.”

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He added:

“There’s a major difference between programmatic advertising and the kinds of advertising you see showing up on social media feeds that actually have the power to warp the incentives of the whole system.

“And sponsorships - where there’s alignment between the publisher and the sponsor - where the audience doesn’t feel cheapened or used by the publisher...

“Where the sponsorship actually gives the writer more power and more revenue… I think that’s a really interesting opportunity.

“We haven’t seen many platforms deliver that kind of power to writers in that way.”

Then a warning:

“It’s easy to let subscriptions corrupt you. There are some unconscious things that can slip in, like not writing critically about that (sponsor) company.

“You need to set high standards for yourself and your journalistic and editorial integrity.

“That’s something you need to be vigilant about, and keep in mind that what you’re trading on is your integrity.

“But then, I think you can make some careful judgments and calls that can actually improve the experience for the audience rather than diminish it.”

Next we talk about focus and deadlines. As CEOs and news editors, Chris and I have lived with these most of our careers, but Substack has changed the perspective.

Chris asks whether the platform is less about reacting fast to breaking events and more a place for considered reactions.

Hamish: “Substack is where people go to make sense of something. That’s not necessarily about being the fastest to break the news or give the fastest take.

“It’s a place for thought and consideration and making sense of the world, and I think the writers who do best on Substack are those who carry that spirit.

“However the advent of Substack live does make new things possible. Two nights ago, Zohran Mamdani won the mayoralty of New York, and that was a big moment.

“Substack was alight with people live from the scene or doing live dissections of what this all means and talking about the election results.

“They were even live announcing their election results in a way that reminded me of how you would have turned on CNN or Fox or whatever for that instant coverage.

“People increasingly, are going to go to Substack to get their instant analysis and sometimes breaking news from the people who they most trust; people like you guys.”

Coming up

• The start of a two-part series with the recently departed head of the Google News Initiative Richard Gingras which sheds light on the backroom thinking at the search giant about the value, potential - and capabilities - of the news industry.

Will it be measured in better efficiency, or an entirely new form of journalism and business?

That’s the challenge Sophie Huet as lead for AI at Agence France-Presse must navigate.

She joins us on Scotch & Watch to share her insights as she manages helter-skelter change in one of the largest newsrooms in the world.

She says it’s already helping filter intelligence from more than 150 to help her and her team know where to assign editorial teams and resources.

But it’s also asking fundamental questions, such as whether it will be newsrooms, consumers, or machines that ultimately end up being AFP’s primary customer.

“These will change the way we work,” she says. “Atomic information. Adaptive, fluid, elastic content.”

She joined and I for a fascinating chat. Hope you enjoy.

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Transcript:

Ricky: I’ve worked closely with AFP throughout my career and spent some with you in Paris in September. It’s a huge news gathering operation.

Sophie: “AFP is one of the big international news agencies. We have 1,700 journalists in 150 covering news in text, photo and video.

“We have people reporting constantly in countries where a lot of other media are not. We were first in Syria when Assad was toppled for example.”

Chris: Agencies are different to mastheads like Le Monde or The Times. Please explain the relationship.

Sophie: “We have 5,000 clients around the world. They are from print, web, TV, radio - all kinds - and we send them news and information via our wire service.

“AFP’s job is news gathering. Our team is on the ground, who know the country where they work, who report exactly what’s going on.

“When there’s breaking news somewhere, we report it to media who don’t have that network.”

Ricky: What I appreciate about AFP is how open-minded it is to new ideas. Is that a deliberate strategy?

Sophie: “Yes. We see journalism as linking humans to other humans from one part of the planet to another part of the planet.

“To achieve that, you need journalism doing its job. To do that, you need to go see these people. That’s what our journalists love to do. Maybe that’s AFP’s identity.

“And we’re developing that for the AI era. We’re enthusiasts for that. Every experiment is possible.”

Chris: Wire services are the unsung heroes. Everyday people don’t realise the depth of information that comes through the wires.

Sophie: “Journalists in every media are doing great jobs with investigations and more, but it’s important to have the breaking news to start this. That’s our job.

“We’re like the emergency room for journalism.”

Ricky: I was eager to get you on the pod because of AFP’s reputation for innovation, and I know you’re thinking hard about AI. Where do you see it fitting into newsgathering?

Sophie: “I was editor-in-chief. Now I’ve been heading AI in the newsroom for a year. We were working on it before that for three years.

“Most news organisations are developing tools to help newsroom productivity. We are too. We have tools for translation, transcription… all extremely useful.

“My role has been to understand the pain points for journalists, where AI can help them focus on adding value, and not to lose time doing non-journalistic tasks.

“We began an AI adoption programme last spring and recruited 12 of our journalists who were already advanced on AI or very interested.

“We gathered them at our Paris HQ to design training modules - created by journalists for journalists who know AFP’s culture.

“We’ve trained 350 journalists, and the plan is to train all the newsrooms and make it mandatory.

“There are also workshops where they can discuss their fears and understand the future value of their work.

“This month we’re implementing more AI within our workflow (and) while we do that, we’re redefining newsroom management, with new governance and evaluation.”

Ricky: Let me break that down. If I’m a reporter on the ground, in a desert somewhere, the benefit is speed and research efficiency. In the newsroom, it’s about automating manual tasks.

Sophie: “It’s helping us augment our journalism and capacity. The reporter on the ground now has real-time language translation for example.

“But AI can also turn data into journalism, because reporters can now do a better job digging in. Journalists who are not data journalists can now get these insights.

“We’re also developing a data journalism department. We used to focus on data for visualisations, but now we are using it to create real-time breaking news.

“We use it to produce news from Ukraine showing areas that have been taken by Russia, or the other way around. That comes directly from data analysis.

“We’re also using AI and data to identify where news is happening, so we get there to report it. Mixing data and on the ground reporting with AI is very interesting.”

Ricky: It’s helping with deploying resources - so somebody gets in a Jeep and off they go. Is it also helping you anticipate where news will break?

Sophie: “This is something AI will help us to do more, and this is where we want to go next.”

Ricky: This makes me incredibly jealous. My happiest days were running newsrooms. Dawn. 300 things to do. Highly caffeinated. Madness, shouting, urgency, danger.

I’m sure you feel the same, so let me ask you this. AI is already changing the way news is produced. Will it change the way news is delivered to consumers?

Sophie: “That’s a big question, and I struggle to answer because the answer doesn’t exist yet. We need to find it.

“It’s a liquid journalism question. What are atoms of information going to look like with AI?

“As a global news agency, the impact will be anticipating the metadata we provide. It can sound boring, but our clients need it.

“It also enables us to adapt the way we send and format our content; short for breaking news, others get longer articles. Will this lead to extreme personalisation?

“These are big questions that will change the way we work. We’re working on that over the next month. Atomic information. Adaptive, fluid, elastic content.”

Chris: Wire content has typically been designed to be used by a human to enable broader news coverage.

Do you now end up with two streams? Sending articles but also mass streams of data and metadata?

Sophie: “I’ll supply all the information we have, because I’m not only giving it to a human now. I’m also giving it to a newsroom’s AI interpreter. AI agents need all the information.”

Chris: I hadn’t thought about that, but it changes the supply side.

Sophie: “Humans will want stories for humans. That’s not dead, but we will need to create new feeds for machines.

“It’s always like that with transformation and innovation. You need to service the legacy, while preparing for the future.”

Ricky: Let me share an insight. I became close to your management when I spoke about AI at the Reuters’ AGM in London two years ago.

Sophie: “I was there.”

Ricky: I was pitching Airgap, my concept of pay-per-crawl that’s now becoming fashionable with Cloudflare and Microsoft.

I predicted that we would be licensing content to machines, and agents, but I made a big mistake. I thought that journalists would not want to train AIs.

And my presentation, your team came to correct me. You said the agency’s role was to report news to enable the narrative of news for the world.

For agencies, training AI was a good fit for your reason to exist - you’re raison d’etre in French. It changed my perspective. I hadn’t appreciated that nuance.

Today, I predict that there will be entire news organisations that emerge now with no other role than to train AIs. Look at Reddit.

Chris: Does AFP have a direct-to-consumer product?

Sophie: “AFP is a newsroom product. We also provide fact-checking for Meta and some platforms, and corporate companies.

Chris: OK. Ricky and I have discussed how OpenAI should be doing deals with every national newspaper right now.

Talking to you though, why would it not go right over the top of them and do a deal with you and other wire services? I assume you’re getting a lot of calls.

Sophie: “AFP has obviously had talks with AI companies, but we have not sold our content for training.

“We provide content as data to be ingested by AI systems to provide fact-based answers to public requests.

“But this is extremely interesting and important for the years to come. Who is going to survive in an AI-mediated era?

“Lots of companies gather and provide data, but newsgathering is critical because AI systems still need to be fed facts to end the hallucinations.

“News organisations, including our clients, produce fact-based journalism, especially at the local level, which matters, but what’s the right mix? Who will provide it to AI?

“These are big questions, and nobody knows how it ends, but what’s vital is linking and deepening relationships with audiences and maintaining trust.”

Chris: There’s a perception that AI is neutral, but it isn’t. Models must be trained and guided. That’s critical in breaking news which means models must weight sources.

Models that overweight opinion, rumour, and disinformation are dangerous to society. I’m keen to see how that plays out.

Sophie: “Sam Altman’s latest statement about opening ChatGPT to erotic content suggests fact-based content isn’t the priority.

“There’s also a big issue with data privacy - the intimate, private questions that people ask chatbots without understanding what happens to that data.

“What we saw with social media will be amplified. How these companies use this huge amount of data… So far, we have no idea.”

Ricky: When the internet began to emerge in newsrooms - maybe 1998 - I remember there was an order to how innovations rolled out.

News distribution started very early. So did erotica. Then there was sponsorship, advertising, then retail, but AI feels different from previous technology leaps.

It’s faster than the pivot from print to digital, and web to mobile, and direct sales to programmatic, and to social. AI is a whole new digital.

That makes me think that AI companies are going to start to buy large media orgs to turbocharge their growth and training.

That was a prediction Chris and I made on stage in Madrid, and being provocative, OpenAI could buy The New York Times for the price of a toilet in its data centres.

We’re fortunate though that some media ownership is not reliant on shareholder-focused boards. How is AFP funded?

Sophie: “We have a mission of general interest. The French state contributes funding, but two-thirds of our revenue comes from clients.”

Chris: And The NY Times has the Sulzbergers. News Corp has the Murdochs. These owners don’t need another dollar.

Ricky: But is selling bad if AI’s the emerging platform? Why is AI owning media a bad idea?

Chris: Should a few huge US companies - propping up the world economy with enormous political influence - control journalism to deliver returns on CAPEX?

No. Great newsrooms have a mission to be sustainably profitable while informing the world.

That’s why many countries limit foreign ownership of media, and police interference in that. Each nation must control its media environment.

Selling out to an unproven, oligopolistic tech owner isn’t right. Sometimes you need to do the right thing, not seek the fastest return.

Ricky: Beautifully delivered. And you were the MD of The Times of London, and CEO of Bauer. You know that I agree, but I wanted to test the hypothesis.

Chris: It’s also different because of speed.

In 2004, the innovators were startups that had to earn adoption. Now, the biggest AI players are already the biggest digital players.

Their investments have instant guaranteed reach. Google Gemini doesn’t need to fight because it’s injected into default search.

It also removes consumer choice. In 2007, people chose to visit Facebook. Now AI is injected into habitual interactions without a voluntary choice. That’s why it’s different.

Ricky: That describes antitrust. You can inject your project into your existing monopoly and be certain to win.

Another test for monopoly is that you can make the product worse and still grow.

Meta just increased ad load and price - worsening the product - and yet made more money, while awaiting a court decision on its own potential monopoly break-up.

Meta on trial

Chris: And Google just had its first $100 billion quarter, after being convicted three times as a monopolist and telling the court it was under intense AI competition.

Big Tech earnings

Ricky: Are you optimistic Sophie?

Sophie: “You must be, but the big challenge is speed. The digital transition took ~30 years so we adjusted. AI is moving far faster, with huge money behind it.

“We must be smart, stick to fundamentals, believe that journalism matters, communicate better what we do, and keep to our core purpose.”

Chris: Tech always finds its place, and people always need trustworthy news. My bet is that AI companies will be pushed towards products that are societally valuable.

Ricky: My prediction is that we’ll face a rough period of disinformation as bad actors exploit a wild west web as tech firms chase growth, leaving others to police the mess.

But then a major event will force a pause and reset. History shows us that’s what happens, but I am most worried about America’s over-reliance on these companies.

Just five companies are 32 per cent of the total S&P index. A failure of any one of them - let alone all - would be catastrophic to the US and the global economy.

I also worry that engineers view the world in binary terms; one or zero, good or bad, profitable or not, while societies and people are shades of grey and highly complex.

Journalism brings nuance and wisdom to that. It can be a vital guide to the builders of these powerful machines to achieve better societal outcomes.

If AI can be trusted because it’s trained by journalism, public doubts will soften. If the scale leads to a breakthrough in cancer because of AI, adoption will grow.

Thanks for joining this latest episode of the Scotch & Watch podcast.

You can get alerts to join in live and ask questions live by downloading the app.

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The Scotch&Watch World Tour rolled into Madrid last week - and we took the rage on stage.

It was standing room only at the FIPP World Congress, where we shared our hottest takes and boldest predictions for what’s next in media, tech, and AI.

We were in good company alongside OpenAI, The New York Times, The Atlantic, Axel Springer, Politico, Hearst, Bauer, Newsweek, Time, Semafor, Vogue, GQ, The Economist, and more.

The energy was electric. And the feedback as we came off stage? Let’s just say Madrid brought the heat. 🇪🇸🔥🥃

Media CEO Nicki Murphy said: “Super interesting talk about publishers and the media industry fighting back against the theft of our content by GenAI. 🥷

“Big up Ricky Sutton and Chris Duncan for a fascinating rallying call for us media folk to get off our arses and group together to fight. 🤺”

Jonathan Westbrook, co-founder of the Independent Publishers Alliance, posted: “If you are in media, optimism is not misplaced.

“Ricky calls for publishers to get together to cre…

Read more

The mood across publishing feels up ☝️ There’s a rare scent of optimism in the air.

A Substack-born media brand - The Free Press - sold to CBS for $150 million, proving that a voice, not a corporation, can still be the most valuable thing in journalism.

Benjamin was might impressed - thanks Midjourney 😉

But there was more.

Neighbourly social network Nextdoor called me for help to integrate local publishers into its 100 million-user network.

The UK’s largest publisher Reach gave its newsroom staff time off to launch 26 Substack newsletters about their passions.

Cloudflare and Microsoft both stepped up to launch marketplaces to trade premium publisher content to AIs on the pay-per-crawl model I envisioned in Airgap.

And The Washington Post announced a $100,000 innovation fund for entrepreneurial journalists itching to build the next big thing.

Stick them in a pot and stir and you start to feel like something’s cooking.

It feels like a long overdue realignment between the creator class and the newsroom. Personality is currency again.

And we even got name-checked in court as Google’s lawyers tried to use Scotch & Watch to rattle a witness. Cheers to the unflappable 🥃

As Google’s traffic collapses, and AI tries to rewrite the rulebook, it looks like the industry’s discomfort is finally turning into invention.

From Substack to Sora, from Madrid to Canberra, you can feel the battery flicker back to life. The open web isn’t dead. It’s just changing hands.

And about time.

Thanks to everyone who tuned in live. Sign up for the app to join us when we are back this Friday night Australian time and Friday morning in the UK. Slainté.

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G’day Googs - you doing good? 👋 I’m genuinely delighted to have you here because you have a big part to play in the future of AI, digital content and the open web.

Publishers don’t want to kill the open web. We don’t want to ignore AI. We want to be part of the future. And we know you need to be part of that too.

That means that we both have the most to gain by working together and ending the enmity, so shall we give it a go?

Seeing you fighting antitrust in court this week I couldn’t help but hear the echoes of Microsoft chairman Brad Smith’s Six Phases of Antitrust Grief.

He wrote these after his experiences working as a Microsoft lawyer as it was broken up in an antitrust action 25 years ago.

• Stage 1: Ugh, Government doesn’t understand tech. Let’s ignore it. It’ll go away,

• Stage 2: Why are they still pushing? Don’t they appreciate the value we bring?

• Stage 3: OK, so it’s actually going to court. Ridiculous! We’ll obviously win.

• Stage 4: Umm, we’re losing. Let’s settle so that nothing too painful happens.

• Stage 5: OMG, we lost and this is really going to hurt. Didn’t see that coming.

• Stage 6: Wow, it’s over and we’re still in business. There’s life after all this. Yay!

OK, that’s not verbatim his version, but that was the tone of his wisdom. Full version is here for paid subs.

And his advice for Big Tech leaders facing antitrust today is: Get to stage six as soon as you can. And Microsoft remains the second most valuable company in history.

Amazing…

Now, before we get to a great pod this week, let me welcome a flood of new subs over the past two days from Cloudflare, Google, Instagram, Amazon Web Services, linkby, AirTrunk, Australia’s ABC, class action lawyers Maurice Blackburn, The Guardian, The Boston Globe, TikTok, and many more.

With an upgrade to a paid sub, you get full access to my work - the stuff Google was interested in - for $2.60 a week. Can you afford to miss out? I’ve also got a group discounts running.

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We’re off to see the Wizard in Oz

Come see me and my trusty straight man as we tear up the stage at SXSW Sydney next week, unveiling our new headline act: The Yellow Brick Code.

The Wizard of Oz hides a warning about power, politics, and illusion. We reimagine L Frank Baum’s allegory through today’s lens, exposing how Big Tech mirrors Oz’s deceptive wizards amid AI hype and soaring valuations.

Turns out we ain’t in Kansas any more. Love to see you there.

Back to Scotch and Watch. and I walk through a practical roadmap for publishers to protect their content and monetise in the AI era.

The takeaway is to stop treating AI as an existential threat, stop moaning about it, and treat it as a strategic accelerant to build a new market that values journalism.

At the epicentre of this is marketplaces - a smart way for publishers to protect their content and charge a fee for it whenever it is used.

I’ve built a global AI marketplace before. I launched Oovvuu in 2014 and expanded it to almost a hundred countries. I tell the story in this deep dive.

And two years ago, I proposed to extend that vision to a pay-per-crawl model called Airgap, which I road-tested with 16,000 global publishers. More here.

Models like this are now beginning to emerge from big players. Microsoft and Cloudflare both revealed plans in recent weeks, so today we’re giving them a review.

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Chris and I also explore why this might be the moment for marketplaces, as antitrust judges sharpen their gavels and the world lurches towards copyright protections.

My belief is that AI will only achieve mass adoption if people can trust it, and geeks sucking junk out of 4Chan to train their models cheaply is doomed to fail.

With trillions at stage, and publishers the most reliable supply of grounded, accountable information, the leverage is there to create valuable marketplaces.

Marketplaces can realign incentives, find market value, reward the best, surface the most valuable content, deliver reliable AI while returning journalism to sustainability.

All the pieces feel like they are coming together, but this will only happen if publishers can remember what life was like before they handed their fate to tech giants for promises and pennies.

That means it’s time to stop moaning and get on with the job. The future’s happening whether publishers like it or not. It’s time to decide whether to board the AI train.

Hope you enjoy this episode.

The rage on stage returns

We’ll be talking about this and more when Scotch and Watch takes the rage on stage live at the FIPP publisher world congress in Madrid later this month.

We can’t wait to add yet another global destination to our footprint after sell-out shows in New York, London, Paris and Australia in the past few months.

If you’re looking for fresh new thought leadership for your exec offsite, or a memorable way to open your conference, get in touch. We have more than enough stories to go around :) Slainté.

Get in touch

Finally are you ready for an AI upgrade?

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AI Upgrade for Journalists is a hands-on, six-week certification where you’ll master the AI-powered workflows reshaping modern reporting - from sourcing and writing to editing and visualisation.

Guided by my friends and industry leaders Pete Pachal, Kris Krüg, and Peter Bittner, you’ll leave with your own custom editorial copilot and a certification that sets you apart in a newsroom moving at the speed of AI.

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A friend alerted me this week that hyper-local US social network Nextdoor - which connects 100 million neighbours in 11 countries - is getting into local news.

Very cool.

What’s even more cool is that it’s working with local news publishers to get their headlines to their communities.

This is something I proposed to them back in 2001 while still running my video AI company Oovvuu BTW. I bet remembers 😜

It’s great news, but it got me thinking more deeply about new innovative ways to get local news to people in a cost-effective and sustainable way.

So I was joined on Scotch and Watch by newsletter whizz Sam Shedden to answer a question with big consequences: Can newsletters rebuild local journalism?

He’s been at this for a while. He ran newsletter strategy for more than 100 local titles at Britain’s third largest publisher National World.

A year or two back he made a seachange, dumping dreary London and relocating 17,000km ✈️ to Australia’s cultural capital, Melbourne.

He fell in love with the city and a year ago started his own local news outlet on Substack.

And he still finds time in his busy day to run newsletters for the UK’s #1 local publisher Reach.

I’ve been thinking a lot about hyper-local publishers lately - and this inspiring chat gave me even more food for thought.

Before you dive in though, please consider upgrading to a paid subscription.

Without it, you’re missing out on my gamechanging research which is helping class actions returning billions to local publishers worldwide.

Can you afford not to be one of 150+ insiders who get this deeper analysis - for $2.60-a-week?

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Also, a quick message from today’s sponsor

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Thank you.

Now back to Sam, who tells me Reach has given its reporters extra time off to work on newsletters for Substack. He’s already launched two dozen titles.

“The company went out to the reporters and asked them what they were obsessed about. Was it cricket, or Liverpool?” he tells me.

“And Reach said it would support them with network support and see what happened. Staff were also given time out of their working day to do it.”

Sam also shares what he’s learned through and the challenges of turning it into a sustainable income.

This is Scotch and Watch. Hope you enjoy it, and happy weekend.

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This week, there’s only one headline worth pouring a glass for: The Google ad tech remedies trial.

It’s the courtroom showdown that could decide whether Google gets broken up.

But why the Viking hat and the power ballad riff? Because in Europe, it really is the Final Countdown.

Regulators have circled November 5, fireworks night, as the deadline for Google to dismantle its ad monopoly, or else.

Chris and I dive into not one, but two trials happening on opposite sides of the Atlantic, both chasing the same goal: Cracking open Google’s black box.

Because let’s be clear - if you depend on advertising for monetisation on the open web, these cases will decide your future.

And the kicker? Google’s already whispering that the open web is dead.

We’re here to find out if that’s true, and whether the system built to organise ads has instead turned into a profit machine that delivers worse outcomes for everyone else.

Enjoy…

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Critics (me included) roared that it confirmed that crime pays in America in 2025 - and sure enough, Alphabet’s market cap soared to $3 trillion for the first time ever.

And the publishers, advertisers, competitors, consumers and everyone else crushed beneath its boot? They got nothing.

But we don’t take that kind of injustice lightly here at Scotch and Watch.

This is a weekly live podcast where and I discuss the collision of Big Media and Big Tech with some AI and real-life stories thrown in to spice things up.

It’s been a funny week. First, my iPhone went into meltdown and began texting rude messages to my friends on its own (no joke). Sorry for the F-bomb . 🫤

But the real drama lands next week, with the start of the Google ad-tech remedies trial.

If Judge Leonie Brinkema swings hard, publishers will get real money back and have a chance to compete and survive. If not? It might be time to pack up the open web.

Chris and I discuss the antitrust movement so far, what might have derailed the judge in search ruling, and why ad tech will be the multi-trillion-dollar decider.

We also chat about what’s happening in Europe, what an ad tech break-up might look like, and how we recover from programmatic driving ad prices to the floor.

A good decision from CIA-busting judge Brinkema could put 20c on the dollar back on every publisher in the world. Another bad one, and we’re in dire straits.

The stakes could not be higher. This is Scotch and Watch.

Footnote: Chris and I will be recording Scotch and Watch live on stage at the FIPP World Congress in Madrid next month. Come join us.

And thank you to everyone who tuned in for this live ep. You can join us for the next one in the Substack app. Download it here 👇

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It would cost $43 billion, Communications Minister Stephen Conroy told the voters, who gasped.

I liked Conroy. He had balls and a vision. You knew where you stood with him.

Then, through mutual connections, I was called in by the government’s mandarins to help them decipher whether Conroy was getting his messaging right.

Was fast internet important with voters, they asked? Was it going to win more public support than say, a new hospital, cut price childcare, or a new apprentice scheme?

I gave a simple answer. People would absolutely love it once they got it, but it needed safeguards.

Today, the failure to act on that warning is ripping the guts out of national economies all over the world.

“If you build a giant pipe from the Australian economy and hook it up to the US, then you better have a plan ready to stop all the country’s money leeching out,” I told them.

I was commissioned to create a series of policies around digital taxation, domestic advertising quotas, ways to preference national interests and media companies, etc.

Australia then went ahead and built its NBN ($57 billion and counting) and Australians were delighted.

Netflix used the fast speeds to dominate broadcast, millions became hooked on YouTube video on Google search, more sucked up Meta, and later TikTok.

It was great.

But Australia forgot to lock the gates, and today, $15 billion a year of its GDP, its economic activity, chugs down that pipe to Big Tech’s offshore tax havens and then to the US.

Then, in the past few days, I got a call from my friend and (until recently Dentsu CEO) ad scion in Canada.

She had decided to get her teeth into this massive and thorny problem, putting a team together and setting her North Star to put real numbers to the great digital suck.

And this week, her first-of-its-kind report revealed the true cost of unrestricted access for US digital monopolies on another nation’s economy.

She joined and I on Scotch and Watch live this morning - with a re-run for those of you who missed it.

The highlights are below, but before I get there, welcome to new subs from Netflix, TikTok, The Washington Post, Snap, The Center for News, Technology & Innovation in Maryland, Australia’s Foreign Investment Review Board, UNICEF, Scotland’s International Magazine Centre, Capgemini Invent, and many more.

Please share with your friends so I can report the news others don’t.

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Sarah Thompson has had a front row seat to the decline of Canada’s advertising and publishing industries, and now she has a number.

“We’ve lost about $7.5 billion from digital advertising that has leaked out of our market,” she told Scotch&Watch.

“If you had waterfront property in Canada, it’s the economic equivalent of eroding your beachfront by 10 metres a year.”

Her study Canadian Media Means Business is more than a moan. It’s a manifesto for action, designed to mobilise news orgs, agencies, and advertisers together.

Canadian Media Means Business August2025

1.15MB ∙ PDF file

Download

Download

Her data shows ~200,000 jobs rely on media and advertising in the country, outnumbering the auto industry (129,000) and telecoms (122,000).

The make-up has shifted with the times:

• Advertising, PR and marketing: 55,700 jobs.

• Digital media: 37,400

• Newspapers and mags: 19,400

• TV: 17,800

• Radio/audio: 6,700

• Out of home: 1,000

Together, they support CA$23 billion in GDP - the accepted measure of a nation’s economic activity.

And every $1 million invested by advertisers in Canadian-owned media outlets creates:

• 8.2 jobs

• CA$630,000 in salaries, and

• Adds CA$1 million to GDP.

The study also revealed how the drain of ad dollars to platforms has impacted on journalism.

Since 2019, 11,342 media jobs have gone as CA$7.46 billion in ads have been lost to foreign platforms (7,693 in newspapers, 3,232 in radio and TV, and 417 in pay TV).

That’s wiped out ~$6.7 billion from Canada’s economy, and left just 11,900 journalists covering a landmass a third larger than Australia, and comparable to continental Europe.

In their place, global platforms have hired just 7,500 people - that’s one for every 13 jobs lost.

And the domestic share of ad take has fallen from 30 per cent to single digits in just five years.

If action is not taken, the suck will continue, and the study concludes only one per cent of digital ad dollars will remain in Canada within five years - wiping out the creative industry entirely.

Sarah told Chris and I the publishing, advertising and agency industries need to work together to plug the hole and save themselves and the industry.

“We have an interdependency that’s really important that we don’t talk enough about,” she said.

“If a dollar stays in Canada, that’s a very good thing for our economy. The end.

“We need way more collaboration amongst media owners and to stop focusing on our Canadian media being a charity.

“This study proves that we’re not a charity. We are an economic powerhouse that drives our economy, and we need to get our hands back on our steering wheel.

“We need more collaboration. I love the out-of-home industry in Canada which collectively built a map where all the out-of-home locations are.

“These are important for us in the advertising holding companies to be able to redirect money.

“Historically, we’ve just had moments of misses - the right idea, just at the wrong times.

“Now we need an appetite, a motivation, and the leadership to want to see the possibility because it has to be everybody.

“Collaboration, conversation, doing a study like this on your local economy. What are we losing? What is it costing us? What’s the Plan B?”

On Scotch and Watch on Friday night, and I were joined by one of the sharpest voices in the business with fresh data on the damage.

As CEO of Digital Content Next - the most powerful publisher lobby in Washington - speaks for The Financial Times, The New York Times, Bloomberg, Slate, News Corp, TelevisaUnivision and more, a group that touches 95 per cent of the US consumers.

We’ve known each other for a decade, and this week he revealed numbers that will scare every media boardroom: member traffic has plunged 10 per cent in just weeks.

He said:

“The worst weeks were brutal. News brands plunged 16 per cent, non-news fell 17 per cent.

“These aren’t random fluctuations. They are sustained losses hitting both breaking news publishers and evergreen entertainment brands.

“And let’s not forget that this is the exact content Google’s AI is trained on and now replaces with its own summaries.

“The company that long draped itself in the flag of the open web is now trampling it, trading the public square for a walled garden built on monopoly profits.” 

Speaking openly, he talk about:

• Whether the thinks a Google zero future for publishers is likely.

• How his publishers still rely on ads for 78 per cent of their earnings.

• The questionable prioritisation of unpoliced sources like Reddit.

• Google’s gaslighting claims that AI search leads to more clicks.

• How Alphabet is syphoning ads from the open web for its own brands, and

• Why the imminent antitrust break-up of its search monopoly is vital.

But first a bit of housekeeping, starting with a word from our sponsor Clever Ads.

AI search is hitting publishers hard. Revenue strategies are shifting fast - towards commercial content, video, newsletters, sponsorships, and contextual takeovers - while performance budgets (CPC/CPA) remain but are tighter and more selective.

That’s where CleverAds steps in. We help publishers plug these gaps with off-network strategies that drive real, measurable growth. Our solutions are built to power the channels that matter most.

Find out more

And come say hi in person if you’re at ONA 25 in New Orleans next month where I will be opening up with Canva on the main stage with a good news war story. I’ll be there from September 10 to 13. Come find me and let’s have a beer :)

Canva at ONA 25

Enjoy the pod and remember to download the Substack app on your phone if you want to tune in live and ask questions of us and our guests.

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David Buttle was part of the team at the UK Financial Times which negotiated its landmark deal with OpenAI, and he joined and I on the pod.

He’s been at the table, learned the wins and pitfalls, and now runs a consultancy advising how to extract the best licensing deals from the AI players.

I was also eager to hear his views on Perplexity AI being busted ignoring publisher blockers to steal content while trying to hide its tracks.

Also in this newsletter:

• I pose questions about News’ slow-moving $250 million deal with OpenAI

• Question why Perplexity is being valued at 120x its revenue, and

• New numbers suggest AI is inflating a new tech bubble. And bust?

But before we dive in, thank you to The Whisky Exchange in London’s Great Portland Street for letting us use their VIP tasting room for this ep of Scotch and Watch.

And welcome to dozens more subs who have joined our fast-growing 3,500+ community over the past few days, including new faces from Google, Yahoo, Sydney literary agent The Zeitgeist Agency, Australian AI marketing platform Prophet.ml, autonomous journalism generator News Genie in Arizona, and early-stage VC Acadian Ventures in Madison, Connecticut, among others.

And please share this newsletter with your network to help us keep growing and get to a better future faster.

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Big thanks to The Whisky Exchange for hosting us in their private tasting room on Great Portland Street. What a treat.

Chris and I break down Zuckerberg’s rare State of the Union on personal superintelligence, his claim that MetaAI is learning on its own, and what that really means.

Will it free us from mundane tasks to become more creative and connected - or just serve up more AI-generated ads with tighter targeting?

We also dig into the numbers: rising ad prices, surging ad load, and why it’s lighting a fire under antitrust regulators.

And how Meta’s big bets on AI and smart glasses are starting to spook investors.

Plus, a few gangster moves Zuck could steal from Satya Nadella to stay on the right side of the law.

• You can also listen to Scotch and Watch on Spotify, Apple, and wherever you get your podcasts.

Only the real story was two things it went out of its way not the mention.

The first was historic. This will be the last financial report by the world’s most famous tech company before it hears from a judge how it will be broken up.

That deserved a mention. Google didn’t. Nor did any of the financial media that scoured. Very odd.

The other is just naughty. As a CEO and board member, your responsibility is to ensure your shareholders and the market are aware of the risks the business faces.

Sure you can hide it behind the gloss and happy news you want to report to look good, but you still have a requirement to tell the market about the bad stuff too.

Google didn’t even mention the break-up in its quarterly update. That’s breathtaking - and reckless, as it will almost certainly lead to a shareholder damages action.

These are the numbers Google wanted you to know:

• AI Overviews has two billion monthly users in 200 countries and 40 languages.

• And Google’s new AI Mode has reached 100 million users in the US and India.

• YouTube and Google cloud have 270 million paying subscribers.

• Gemini doubled the training data it’s consuming in the past three months.

• YouTube Shorts (its TikTok clone) has passed 200 billion daily views.

• Ad yields on shorts now match the CPMs on YouTube pre- and mid-roll ads.

• The Gemini app now has 450 million active monthly users.

• The number of daily requests for Ai services as risen 50 per cent in 30 days.

• That’s driving cloud revenues, which have reached a $50 billion annual run rate.

• Nine million developers have now built apps, agents, and tools, with Gemini.

• Google’s new GenAI Veo 3 has made 70 million videos since May.

• Google’s total revenue rose 14 per cent to $96.4 billion - more than $1 billion a day.

• Search revenue was 5.9 per cent, and

• YouTube up 6.5 per cent.

But for the nine in 10 publishers and the open web that relies on Google for discovery, distribution, and monetisation, the news was more break.

First, on monetisation, the amount Google passes to third parties through AdX and GAM coninues to slow, as it protects its owned and operated properties.

This is how much Google has sent to publishers and the open web quarter on quarter since it started reporting the numbers. Note the dotted red trendline…

It’s easier to see how Google is bleeding the web for its own profits when viewed over annual reporting. and all these numbers are from Google’s official financials.

Maybe it’s time for that break-up that no-one mentions?

and I got into it on Scotch and Watch last night.

We also discussed how YouTube’s overtaking Netflix, the future of sports rights, and how the loss of the secret Apple deal will cost Alphabet $150 billion in cash flow.

Get alerts for future live chats by signing up for the Substack app below.

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Big Tech has spent 25 years honing a playbook that relies on publishers being short sighted and stupid.

They figured out long ago that publishing’s CEOs are by-and-large defensive in their mindsets, and focused on short term goals and the next quarter’s financial target.

That makes them desperate enough to their content, brand, and industry, to hit their KPIs, assuage bruised boards, and take a step closer to an exit and payout.

This is the whispered truth that dominates the watercooler wireless within every newsroom. Staff know. Shareholders know. And the Big Tech brethren know too.

But f*ck that. If we have the wrong leaders, we can replace them, and we must celebrate those who are fighting to build for the journalistic generations to come.

This week, a new media leader emerged to launch an international attack on Google’s AI Overviews.

Did you know that Canva, Accenture, IBM, Wizeline and more trust me to advise, launch their products, and speak for them on the world’s stages? If you’re looking for a speaker, activations help, or want to sponsor your product to this newsletter 3,000-plus readers, shoot me a mail at rickysutton@substack.com

Right, let’s get to it my exclusive interview with the media exec aiming to kill Google’s AI Overviews, and how he’s already won some powerful backers.

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This week we are joined by one of my personal inspirations and mentors, Bismarck Lepe, from his home in Mexico.

From humble beginnings, he became one of Google’s earliest employees, writing the first lines of code of its ad business which now banks $350 billion.

He then started Ooyala to help publishers embed video, before employing thousands of engineers in Wizeline, and now leads fast-growing telehealth platform MiSalud.

His proven approach to entrepreneurship is now sought out by publishers around the world, as well as leaders at many of the world’s most valuable companies.

Chris and I were keen to know what publishers could learn from him about:

• When to say go or woah on innovation.

• How to best incubate internal start-ups.

• When to think big and when to bide your time.

• What to focus on first to get wins over the line, and

• Ways to empower employees to chase their passions.

It’s an amazing and inspiring can’t miss chat, just as the news industry ponders whether to take big swings on AI, and with Big Tech break-ups on the way…

Bis and I have been friends for 20 years, so with me in Sydney drinking coffee, Chris nursing a 12-year-old Bowmore in London, and Bis sipping mezcal in Mexico, we got underway...

Welcome to new subs over the weekend from America’s largest publisher Dotdash Meredith in New York, Portugal’s national news agency Lusa, from India The Press Institute, global comms agency Milltown Partners, founded by the former secretary to the UK Royal Family and communications director for Manchester United, Holland’s leading commercial radio network Qmusic, American IP advisors Quantum, digital media training platform AcademyDM in Florida, and Washington PR agency Precisai, among others. Welcome all… 👋

My guest was a hero of mine, Stephanie Layser, the former head of programmatic ads at News Corp, who was one of the most important witnesses at Google’s ad tech trial.

She didn’t hold back, exhorting senior execs from Paramount, News Corp, Reuters, AFP, Amazon, and The Washington Post, that the world is ready for a better web.

And with her permission - and that of our sponsor Wizeline - I’m publishing it here today.

We spoke about the Google break-up, publishers taking control of Chrome, how the ad market can be returned to quality and competition, and more.

And together, we worked to permission the news industry to be outraged, angry, motivated, and ready to take back what’s been taken from them.

Unscripted. Vehement. Opinionated. This is Scotch and Watch live. Or as one attendee called it: Fight Club for Journalism.

Stephanie and I discuss:

• What it was like to be the only female witness invited to testify.

• Why she was so motivated to expose Google’s sub-standard tech.

• Her pivotal evidence about being held hostage that led to the conviction.

• Google’s snide tactics to gaslight her and dismiss her as emotional.

• New money-making strategies that avoid the mistakes of the past.

• Why publishing is critical for a trusted future for the open web and AI.

• How the news industry must adapt to own and control its user data.

• Her mission to remake advertising that funds journalism and a vibrant web.

• Why AI will shake up advertising and create new publisher opportunities.

• Her vision for AI agents that will take over handling direct ad sales.

• How emerging tech will deliver new content experiences for readers.

• Why publishers must accept new tech is coming and make better decisions.

• Why the world is ready for a post-Google future and how it can be delivered, and

• Why now is the moment for publishers to take control of Chrome…

My heartfelt thanks to Stephanie, the team at Wizeline, and all the guests who came and offered their opinions. Let’s do it again soon. We have lots of work ahead…

Scotch and Watch will be back on stage at the FIPP World Congress in Madrid in October where I’ll be joined by my co-host, former Bauer CEO and Times MD .

And if you’d like to host an episode of Scotch and Watch, you can, anywhere in the world. Here’s what to do 👇

This is the latest episode from the fast-growing Future Media podcast stable. You can tune in here or on Spotify, Apple, Art19, or wherever you get your pods.

This week, former Bauer CEO and I dive into the decision by Business Insider to cut 21 per cent of its workforce as Google slashes its search traffic.

Was this sensible rightsizing in an unstable market? Or the latest capitulation by a defeatist publisher desperate to keep the lights on?

Thank you to , , , , and many others who tuned in live, and to join us for the next live ep, download the app.

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Business Insider announced the deep cuts last week, blaming financial challenges and the need to streamline operations to focus on its core.

What stood out to me was the timing. We’re less than 70 days from a judge’s decision on how Google will be broken up to pour traffic and revenue back into media.

Insider’s CEO Barbara Peng told staff the company relied for 70 per cent of its traffic on Google search, and that had become unreliable.

Page views have cratered more than half in recent months, and the future looks bleak with AI Overviews directing traffic to Google’s owned and operated sites.

This is not new, I have predicting it for more than a year.

The proof is now here for all to see this.

The Wall Street Journal has just published charts and data showing the impact of the changes that I have been warning have been coming.

But with major change just months away, why would Business Insider cut now? And why cut so deep?

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Business Insider was started in 2007 by superstar US media analyst and grew to be a well-regarded forward-thinking publisher, deeply embracing digital.

Its audience soared to a reported 325 million people worldwide and at its peak, the company employed almost 10,000 people.

It was a torchbearer for subscriptions, building an in-depth reports and analysis wing called BI Intelligence delivering special reports and insights on digital trends.

It also grew a strong newsletter business.

In 2015, it was sold to German publisher Axel Springer for US$343 million, ~$100 million more than Amazon billionaire Jeff Bezos paid for The Washington Post.

Revenue peaked at $290 million, with cash coming from all its business units, but mainly through search traffic monetised by premium programmatic ads.

Now that’s all at risk and CEO Peng said focus was now shifting to premium content and away from search-dependent revenue.

“The media industry is at a crossroads,” she said. “Business models are under pressure, distribution is unstable, and competition for attention is fiercer than ever.

“We must be structured to endure extreme traffic drops outside of our control, so we’re reducing our overall company to a size where we can absorb that volatility.”

In our chat, Chris and I analyse the decision, and the conversation takes us on a journey through the best models for publishers in a post-Google future.

Is mass media at an end? And are subscription newsletters like this one, and platforms like Substack, a way to mass the niches for a new media future?

Someone who seems to think so is himself. He’s just launched his own Substack.

REGENERATOR (alpha)

Henry Blodget's new thing... Analyzing the most important questions in tech and innovation.

By Henry Blodget

Scotch and Watch has just returned from a US tour on Broadway and will be back on stage at the FIPP World Congress in Madrid in October.

If you’d like to host an episode, you can. Anywhere in the world. Here’s what to do.

This is the latest episode from the fast-growing Future Media podcast stable. You can tune in here or on Spotify, Apple, Art19, or wherever you get your pods.