Slate Money — "Media Media" (Feb 8, 2020)

Host: Felix Salmon | Guests: Emily Peck, Anna Szymanski, Ed Lee

Overview

This special "Media Media" edition of Slate Money dives into the volatile world of media and markets, covering Tesla's wild stock behavior, the business models behind The New York Times’ digital reinvention, and eye-popping revenue numbers for social platforms like Instagram and YouTube. The episode blends analytical debate, data, and dry wit as the panel explores whether Tesla’s price surges make sense, how old media can survive, and why Instagram ads are so irresistible.

Key Discussion Points

1. Tesla’s Stock Surge: Reason or Randomness?

[01:07] – [18:54]

• Google Search Fad: The hosts joke about how “Should I buy Tesla stock?” is the top autofill in Google searches, highlighting its recent mania.
  • Ed Lee: “All I have to type is should. And I get should I buy Tesla stock?” [01:44]
• Stock as a "Gambling Vehicle": Felix and Anna dissect the short squeeze narrative, comparing Tesla now with Volkswagen in 2008, but dismiss the idea that shorts are the whole story this time.
  • Felix Salmon: “This looks exactly the same as the chart of Volkswagen shares in 2008… the mother of all short squeezes.” [04:28]
• Why Did It Explode?:
  • Felix: “The answer is the stock went up and there wasn’t a reason.” [08:46]
  • The panel acknowledges the human need for a narrative but argues that sometimes prices become “random stochastic gambling vehicles.”
• S&P 500 Quirk: Tesla’s exclusion from the S&P 500 (due to lack of sustained profit) means its shareholder base is unusually diverse.
  • Felix: "That makes the holders of Tesla much more diverse than the holders of virtually any other stock." [12:19]
• Bubble Psychology & FOMO:
  • "Tesla at that point just becomes this dream. It's almost like the financial equivalent of a lottery ticket." [14:12]
• Robot Traders & HFT: Panel debates if robots/algorithms drive the surge; Felix and Anna say high-frequency trading doesn't explain these multi-day moves.
  • Anna: “These are not like simplistic things that are just like, 'oh, this tells me to keep buying, so I will keep buying.' ... It’s actually somewhat unlikely... " [15:25]
• Tesla’s Value Thesis: Debate shifts to whether there’s anything "real" behind the hype—network effects, data, gigafactories, or big dreams of robo-taxis.
  • Felix: “It does make a lot of rational sense for someone buying an EV to buy a Tesla just because of those network effects.” [20:53]
  • Anna: “They're almost more becoming like an Apple...hardware in theory, you have software, and you have services.” [21:03]
• Contrarian View:
  • Ed Lee: “I think self driving is snake oil. That’s not real. That’s not going to happen. Not for decades and decades.” [21:56]
• Final Advice:
  • Emily: “No, don’t do it. Unless you don’t care about losing money.” [18:48]
  • Felix: “It is the new Bitcoin.” [18:54]

2. The New York Times: Digital Subscriptions Boom

[22:23] – [36:15]

• Record Subscriber Growth: NYT has 5.2 million subscribers, 4.3 million of them digital.
  • Ed Lee: “There was definitely the Trump bump… but even after things like the Mueller report… subscriptions still kept going up.” [22:54]
• Raising Prices: NYT plans to raise digital sub prices (from $15 to $17/month), surpassing Netflix and Spotify.
  • Felix: "The New York Times was basically at the top of the list. It was the most expensive and now it's becoming even more expensive." [24:36]
• Not Just News: Expanding into apps for Cooking and Crossword has brought in new (often non-news) readers.
  • Ed: “The cooking app, a lot of the subscribers are not New York Times readers. A lot of them are in the Midwest.” [26:00]
• Advertising Woes: Despite growing readers, digital ad revenue fell, likely due to Google/Facebook dominance.
  • Ed: "So you have more readers this year than last year, but you’re selling fewer ads. That I think is surprising." [26:28]
• Strategic Milestone: NYT hit $800 million digital revenue — enough that "if print disappeared tomorrow, you still have an $800 million business." [27:55]
• Why Local Papers Can’t Imitate: NYT’s success is unique—its large, educated, national audience can't be matched by local newspapers charging premium prices.
  • Felix: "There is only one New York Times...Only one newspaper has been able to do what the New York Times has done." [30:19]
• Business Model & Brand Identity:
  • Anna: “They are almost more becoming like a lifestyle brand… a lot of what they do is not really, let’s be honest, hard news.” [35:01]
  • Ed: “The Journal was charging people online from the first day… It’s just the specific blend of things that [the NYT] had.” [35:32]
• Ownership Structure: The Sulzberger family keeps control, insulating NYT from activist takeovers.
  • Ed: “Carlos Slim could buy up every single openly traded share and still only control a third of the board.” [37:10]

Notable Quotes

• Emily: “The transformation of a newspaper into a subscriber based … new media company.” [25:24]
• Felix: "We should be happy that the New York Times is succeeding, but I think it’s a stretch to then say...they’ve done something wrong [if others fail]." [35:58]

3. The Social Media Gold Rush: YouTube vs. Instagram

[37:15] – [46:21]

• Jaw-Dropping Revenue:
  • YouTube: $15.1B annual ad revenue, Instagram: $20B; NYT ads less than $0.5B.
  • Ed: “Instagram ads are addictive, am I right? I cannot stop clicking.” [41:50]
• Differences in Models:
  • YouTube gives $0.55 of every dollar to creators.
  • Instagram keeps most ad revenue—in-feed ads work extremely well, especially with high-end brands and e-commerce.
• Profitability Debate: Ed argues YouTube likely loses money due to high video infrastructure costs, while Instagram is likely far more profitable.
  • Ed: “I think YouTube loses money every year, but. It is this time suck for people with Google accounts.” [40:22]
• Data Over Dollars: YouTube and supporting products like Maps aren’t just about direct revenue—they feed Google's ad algorithms.
  • Ed: “So much of YouTube viewing feeds into the algorithms and the, and the data processing against advertising…” [44:44]
• Instagram's Influence:
  • Felix: “Shopify is a multi billion dollar business basically on the back of Instagram ads alone.” [42:04]
  • Ed: “Instagram comes along and it’s sort of the beautiful life platform... tailor made for luxury brands.” [42:58]
• Kids’ Platform: YouTube dominates “from the 0 to 4 set,” fueling child consumer trends and desire for toys.
  • Anna: “From like the 0 to 4 set, YouTube has a lock on them… I have seen personally sell products.” [45:37]
  • Felix: “All of the Christmas presents that my wife wants, she gets from Instagram.” [46:21]

4. Numbers Round & Memorable Anecdotes

[46:30] – [51:45]

• Notable Numbers:
  • Emily: 15% — “My first apartment broker fee in NYC. But now they’re gone! No more broker fees.” [46:30]
  • Anna: £4.50 — “The Citigroup trader in London who stole a canteen sandwich and got fired just before bonuses.” [48:03]
  • Ed: 1 million — “NYT’s annual subscriber gain in 2019, but also Disney+ added the same in two weeks and Netflix in 10 days.” [49:23]
  • Felix: 80 billion — "Number of sea urchins ravaging Norwegian kelp forests, stressing opportunity for uni farming to restore balance." [49:53]

Notable Quotes

• On Tesla:

  • Felix: “The answer is the stock went up and there wasn’t a reason.” [08:46]
  • Anna: “Anytime there’s any type of short covering, people like, it’s a short squeeze. No... It doesn't have that dramatic effect.” [06:23]
  • Ed: “I think self driving is snake oil. That’s not real. Not for decades and decades.” [21:56]

• On New York Times Reinvention:

  • Emily: “A newspaper has managed to, I think we can say confidently, transform itself from old media newspaper into a subscriber based...new media company.” [25:24]
  • Felix: "There is only one New York Times. The, the Warren Buffett's newspapers are all local newspapers. No local newspaper can do what the New York Times did." [30:19]
  • Anna: “They're almost more becoming like a lifestyle brand.” [35:01]

• On Social Media Revenue:

  • Ed: “Instagram ads are addictive, am I right? I cannot stop clicking.” [41:50]
  • Felix: “Shopify is a multi-billion dollar business basically on the back of Instagram ads alone.” [42:04]

Timestamps for Key Segments

• Tesla Stock Mania — [01:07]–[18:54]
• New York Times Digital Transformation — [22:23]–[36:15]
• YouTube & Instagram Business Models — [37:15]–[46:21]
• Numbers Round — [46:30]–[51:45]

Tone

Witty, skeptical, data-driven, conversational, and periodically deadpan—reflecting the hosts’ skepticism toward hype (especially for Tesla and self-driving promises) and their appreciation for inventive business models and media reinvention.

For Listeners in a Hurry

• Tesla’s frantic price spikes? Sometimes there’s no “reason”—just FOMO, speculation, and the dream of riches.
• NYT is winning the digital subscription race by thinking beyond news (see: Cooking, Crossword, The Daily podcast), but that model is impossible for most local media.
• YouTube and Instagram are ad revenue monsters: YouTube likely subsidized for its data, Instagram wins on luxury and e-commerce integration.
• The future of media is oligopolistic—giant platforms and one-of-a-kind brands thrive, almost everyone else is left scrambling.

For more, listen to the full episode or check out Slate Money.