Rory Sutherland, Elfried Samba and Jordan Schwarzenberger on Scaling the Sidemen

Yeah. My forehead.

[Music] Oh, there we go. All done.

There we go. All right. Just bring it just a touch closer. Amazing. That's great. I'll try not to move too much. Lovely.

What are these cameras? They're called something, aren't they? They're black magic. They're black magic. They're black magic. Yeah. Got it.

You can stick them all up very easily for like live mixing. Hey, I I I basically just turn up and I let the the the goats do the work. I come in and everything is high in black magic. I don't care. What? Black magic. You're looking at it.

I was going to say I was going to say one one by the way interesting angle here which is quite interesting is that if you think about in a weird way and I've got a friend Don Marty who may actually we probably should get on. He would argue that what influencer marketing is and what and what actually customer relations will become is it's all a way of escaping the um meta Google bottleneck which is it's basically a massive duopoly strangle hold over advertising.

Yeah. Okay. And actually if you look at the you know the valuation of those two companies it's predicated on the fact that they will grow faster than the economy will grow which effectively means that they will take a greater and greater share of corporate revenue.

Yeah. To a point where it actually you have to argue they've gone from being creative businesses to extractive businesses. They're purely advertising businesses. But also with but with our regulations hashtag out everything else and the sort of strangulation of reach when you're complying it forces you back into that anyway through even through the vehicle of influencer marketing you pay for creative but to comply you have to run it through hashtag ad and all the things that then suppress reach and then you need to pay more money for.

So you're basically not actually paying to advertise you're bribing people not to suppress your message.

Exactly. Exactly. So, I mean, a lot of Amazon advertising apparently is called advertising, but it's if you pay us money, we won't put the Amazon basics product above your mafia. I mean, like something we've learned, so we'll get into it, but we've got all our consumer brands, and you realize, hold on a minute, you guys aren't you're not making money on the products here. You're making money on extracting every little drop of cash that these businesses have to support the products or we'll drop you.

That's the game. Oh, yeah. Quite clever. I've heard that before. Maybe in the 40s, New York, I don't know.

Well, where is It's very similar to the georgist argument against uh land ownership, why you should tax land value because the argument is once you have someone doing something economically valuable um uh where they're dependent on their location for the performance of their work a shop. Okay. Right.

Then increasingly the gains go to the landowner not to the actual person doing the work.

Yeah. And so Henry George was this 19th century American economist who was the only way you can describe him was he was a total free market libertarian in relation to labor and capital but a socialist in relation to land or you might argue if you take it further uh goods that are in scarce supply that are actually the creation of God rather than the creation of man. So he basically said if man creates something that's his to keep. But if you have something like oil or land which is actually a natural endowment that should be taxed for the benefit of the community because it's the community who give it value.

Okay. So I have a we have a weird point of view by the way which is I'm pro- car and anti-public transport in one respect which is that public transport concentrates people in narrow areas where there's a station or a terminus. And so the money the state spends on the public transport ends up own benefiting the person who owns the land near a place of high footfall.

Okay. All the highrises outside every zone two station.

Exactly. Totally. Exactly. And so so what Singapore does is the government builds a tube an extra extension to a tube line. The government then builds a massive great high-rise on top of the station and it pays for the tube line.

Okay. It's the most interesting thing in terms of solving a problem where nobody's interested. I wrote in the spectator that you can solve highspeed 2 by a making it free and b helping solve the housing crisis. Here's what you do. Okay, you build two stations between London and Birmingham and you build one station, let's say, between Birmingham and Manchester. Not every train stops there. I'm not suggesting, okay, but you have a little track that goes off to one side. Okay. When you build those stations, you buy 20,000 acres, let's say, of agricultural land around each of those three stations. Okay? Make sure they're somewhere near a road or motorway or something of that kind.

Okay? Now, that agricultural land, £3,000, £4,000 an acre. Okay? Suddenly, once the station opens, you've got and you award yourself planning permission, you've got land which is 20 minutes from Houston station, i.e., that's St. Alburn's, right? Okay. Okay, it doesn't matter where it is. It's like St. Alburn's. Okay, where land is probably worth 1 million million and a half an acre. Okay, you take the land value gain between those three projects, you've you've helped solve the housing crisis with a ton of houses. You've made 120 billion quid and you've just paid for the [ __ ] railway.

Now, what is weird about that is I wrote about that and I expected one of two things and I was equally happy with both. Someone to write to me and say, "You're wrong because"

Yeah. Nobody.

Mhm. Somebody to write to me and go, "That's really interesting. Maybe we should do that because it'll save the taxpayer120 billion pounds." Nobody. And so there's something weird about our attitude to land and this sort of weird idea that if the government were to open such a station, all they do is make a random farmer into a billionaire.

Yeah. At the taxpayers's expense. M and yet for some weird reason so this point that actually you have I would argue that you have land which is basically extractive it's a scarce commodity okay uh you have oil for example which is again and you also have I would argue businesses that own huge network effects I would argue that Meta and probably Google should be under georges principles they should be fairly heavily taxed because the advertising revenue that they garner is really not a product of any effort of theirs. It's the ownership of both mental real estate and to some extent network real estate. And I was I was less bothered by this 10 years ago when Google was like inventing really useful [ __ ]

Yeah. I mean, everybody gives Elon a hard time. I get it. Right. Okay. But on the other hand, Elon does do things that we weren't expecting.

Yeah. Um, now to be honest, Zuckerberg's never had a second idea, has he? Am I being really brutal there? We've given him like we've slooed like, you know, tens of hundreds of billions of dollars into the coffers of matter. I don't see any rockets landing on a launch pad. Right. There was a bit of me that thought actually if we're actually funneling advertising revenue into innovation that's just as valuable as funneling advertising revenue into content creation.

Yeah. If we're doing neither then what's the point?

Now David Oglevie interesting point wildly opposed to billboards.

Mhm. And David Oglevy's opposition to billboards was not expressed in George's terms but won't bear with me. Okay. He argued that if you advertise in a newspaper or you advertise on television, there's an ex an implicit contract with the consumer which is okay, you put up with the advertising, but in return the um content creator creates content.

Yeah. Nice little benign circle. If you own a billboard, the public arguably suffer through the ugliness. There are exceptions to that. Adshells, bus shelters paid for by advertising are providing a public service. You could argue that digital billboards that tell you, you know, that the Northern Line's buggered, you know, and what the weather is going to be. You could argue that that's a public service billboard and therefore acceptable. So, I'm prepared to take that.

Okay. But Og's argument, you could argue, by the way, that London Transporter poster advertising is acceptable because it actually funds lower affairs in some way. Okay. But a billboard that merely stands there by the side of a busy road, he argues, basically uglifies the environment for the consumer, it enriches only the landowner.

Yeah. Uh at the expense of the public and therefore he thought it wasn't really acceptable to define that as advertising.

Also, there's consent when you go in the tube, right? You pay your ticket and even though it's it's paid for, you understand there's an advertising ecosystem, but you could argue they've got a little bit of a monopoly unless you're a really heavy Uber Lux user. One could always walk you choosing to go. Correct. You there is a contrary argument by the way about censorship of tube ads which is that sort of unlike an ad on TV or in a magazine, you have no choice but to consume the content. So when you're in it, you're forced into it and there's a monopolization around that that network of transport. But obviously the the logical conclusion of a of walking through I don't know Hollywood is that you could you could have end like endless billboards as you do in certain parts of the world. No, there's no end point unless somebody says, "No, that's ugly. That needs to stop." And ultimately, it's forced upon everybody all the time without any level of consent. So, I've never heard it. I didn't know David Oggovy, who's obviously profited a lot from Billboards over he well, he he wrongly claimed they didn't work. They do work, but he well, he was in charge of the agency, he more or less he argued against them. I don't think he refused to use them, but he was deeply hostile.

Yeah, I agree. I agree with that. But going back to the whole conversation around like um land um so so I I think I put a couple of Tik Toks out about the fact that and Apple's my favorite company. People know that. It's the reason why I got into this industry. But I I was very disappointed by the innovation and and and the newness coming from Apple. The original thing.

Oh, you might get a new bezel7. Hey. So so so I was really disappointed by that. And then I realized that that that Apple is no longer in the innovation business. because they're a landlord, right? And the fact that actually a lot of the revenue is driven by the real estate that they've been able to to to build out with the the app store, the products that they have and the fact that everybody needs oh a large majority of the population need them to be able to build their businesses, right? And therefore, they're just extracting off the back of that. But before we can get into this rabbit hole, because I know that we've got

I'm disappointed they canned the car.

Yeah. because they had a brand which could have launched. It had the power. So one of the things that brands have is the power to get the consumer to give them the benefit of the doubt. And so one of the one of the unmeasured bits of brand value is the extent to which people will adopt innovation under your ages.

Mhm. And I thought that I think we need little bubble cars going around cities. Okay. I think I should actually leave my car on the outskirts of London and scuttle around in a little microlino. And I thought Apple had the power to make to get that to critical mass.

Yeah. You know, I mean, I'm a huge car devity, but I'm the first to acknowledge that inside cities, they're too goddamn big.

Oh, yeah. And the batteries are too big for the kind of purposes of urban driving. It's a great little business in Fulham where you basically rent a golf cart. Um, is it Yogo, I think it's called?

Yeah. But that that's you know I see in that a little bit of the future. I see in the Heathrow pod a little bit of the future. You seen those small I think are they citrons or something? Those tiny little electrical ones the ammy sorry. Yeah they're I mean they're and obviously in France right they're absolutely huge. Not so much I think in Paris not obviously as much here but you see them around and actually it makes a lot of sense for those who just want to scuttle rather than getting in their big Range Rover or something. It just makes so much more sense. Obviously congestion charge everything else. That's going to squeeze people out increasingly. Those solutions make sense to fill the gap. I think

I remember something somebody said something about the fact that actually how many you pay for a car or you own a car but the amount of times you actually use it is actually very very little right so actually you would like a car to be mobile for rural dwellers like me it's nice to know it's there

okay 3:00 in the morning you got to take your daughter to the hospital three kids in that car far too much no you're right I mean actually

but only only sense only since really I mean I didn't really use a Not hardly at all before we and actually you need to make cars a bit more utilitarian and basic for us to be happy to share them. Once you've got leather quilted seats and you know a load of incar bling, you know, I don't even like my wife using, you know, I don't like my children sitting in it. But if you have that kind of citroron like thing, you go what? Whatever. You know, it's the lime bike philosophy. You know, if you like, you know, no one's going to share a titanium bike. Okay. Right.

Yeah, totally. Well, you know what? I'm already excited about this episode. I got Jordan in looking dripped out. I'm no longer the drippiest person on the pod, but actually, I was really excited to get Jordan on because a very, very relevant topic of conversation about the creator economy that's happening right now. There's some crazy stats out there about the growth of the industry, some crazy shifts that's happening in the industry. I'm not going to spoil too much. I want to give you the floor to let everybody know who you are, what you've been doing, and uh what's your bottleneck within the creative economy.

Well, firstly, thank you both for having me. This is going to be a lot of fun. I can tell. Um yeah, so I'm Jordan, manager of the side. Been working in this space now for about 10 years out of school pretty much. Went into Vice is my first my first sort of job as a junior creative in in the agency there, Virtue. Uh then went to Lab Bible to sort of help build their agency. Then start my own Gen Z agency at 19 to help brands connect with me being the sort of target consumer. I was again 19 at the time but I worked with quite a few brands and partners so was like I can I can go out and do this thing even though I couldn't but I tried.

You at Lab Bible which years? Yes I was there. I would say the glory years that offends some of the recent Lab Bible cast but no it was like 2016 to well yeah 2016 to the end of 2017. Um so that was like you know the shoddy office behind All Saints in great in um Great Eastern Street. I mean it was it was a mess but it was it was that kind of early period. And it was amazing time to be there cuz it was bringing over the more sort of professional types if you will from the likes of Vice etc to help age it up and make it more sort of corporate less bumday mum days period out of its puberty phase and into moving away from home I would say. So anyway was there for year and a half loved it and then went over to start my agency then from there fell into the world of talent. So I ended up um at a company called James Grant, now YMU, as their chief creative officer um but started through uh through my agency and I was in a period like going into that business and realizing hold on a minute you have 200 300 incredible clients across sport, music, entertainment for those who don't know you know people like your Antonex of the world at the time your your Hollywood you're Philip Scoffields can't mention that name anymore but you're Philip Scoffields of the world your you know very much your sort of ITV Heartland presenters and then also people like Steve Okei take that uh Clean Bandit who might be on music and then over on There we go. There we go. Um, and you know, same same across sport. And then going to that business, you realize that if you treated the the talent, I hate the word talent, but if you treated the talent as creators or as you know, publishers, how much more could you extract from brands, how much more value could you provide for audiences, you know, creating original formats and content series, plugging brands in through through branded content as we did at Lab Bible, as we did at Vice, rather than just doing your basic endorsements and the stuff that doesn't really work, but also, you know, limits the creative potential, right? and actually you've got 2 million, 3 million, 4 million followers per some of these big heavy hitters, but you're not using it in any way. You're just posting pictures of yourself, a good one in Britain or whatever it might be. So that was the mindset came in and then my role was to help future proof it and make it more relevant. So first thing I did actually look about was it was a good move, but I brought Amelia to Moldenberg over from she was a manager at the time. I think she was on 100,000 subscribers. I met her during my time at Lab Bible.

Do you a chicken shop date? Yeah.

Yeah, of course. Yeah. Here we go. There we go. It's mainly fantastic. I mean, yeah, it's been plugging away for 11 years. You tried to bite actually get that on there. Oh, you'd be a great guest. I always want to do the one with the hot sauces as well. I think I'd be actually quite badass on firming up the the chicken chop J. I loved it. She loved it. Yeah. As I always say, no surprise. She had the best years of her career since I left for sure. But she's done unbelievably well. That was the first thing I did. people like you know Zack and Jay Wood in Klein um Mini Chihuahua Jack Harry's you know basically helping to future proof that roster but also provide creative and strategy for um the bigger clients to help them just look ahead rather than stay in the sort of old school TV model so people ant so anyway so did that and then ended up meeting guy called Sam and Aaron Aaron had worked with me at YMU in the business management side of the business Sam has been the accountant for most of the UK YouTube scene for the last 10 years so his one of his best friends growing up was Marcus Butler who was like a big YouTuber he started making Sam's an accountant. Oh, Sam, can you help me with with my accounts? Sure. And from there, you go from Marcus to Zoella, Alfie Days, and Joe Sag, etc. And you build out this roster of, you know, of YouTube clients as they're making money for the first time. And Sam built this. I It's incredible looking back. He was so ahead of it. But he built this uh this accounty firm within a bigger accounty firm called Carpenter Box in Worththing Purely focused on YouTubers and content creators at the time like literally 10 to 12 years ago when no one was doing it.

Yeah. Exactly. So uh in that process he met the side men. The side men became clients and as they were starting to form as a group but also as they were doing their individual stuff he was looking after all of them had a great relationship and always saw that they had a unique opportunity that for anyone in our generation I would say and under you know you know in instinctively what the cybermen represent you know how big they are 10 years ago even right you know what this thing is and how culturally relevant you know go down any single street in London or around Europe or even in America they would get mobbed they get recognized and that's been going on for a long time. So Sam had always seen this, but they had they he'd seen that the business operation and structure around them had not caught up to the opportunity. I think in the UK, right, we have a very archaic agency management structure which is I think going to collapse actually. We can get into that maybe in time, but I know it's got future for a number of reasons.

Do you think the US is way ahead? Do you in this respect or Yes. No. I think I mean I think so in LA for example, obviously it varies in different states, but if you go to California, you go to LA, you have very distinct laws around managers and agents. you can't be the same. So, of course, the money at the highest end of Hollywood has always been massive. So, you've had competition laws that have prevented managers and agents from being the same person, which is why you have, you know, your CAS, your WME, your UTAs, etc. And you also have managers. So, if you're Mark Wahberg, whoever it might be, obviously the case in Entourage, you have your ARI from WME, Ari Emanuel.

Is the flack the kind of personal PR person also much more American than British? Yes. One of the reasons I think that American coverage of celebrities is much more differential than British is because these people kind of control of course and everyone's in bed with each other and everyone's very friendly and you don't want to annoy this person or they'll hold some gun over your head and you know so it's all very uh controlled I think in quite under hand maybe like a passive aggressive way that does have maybe a bit of violence underneath I don't know let's see slightly sinister like yeah don't report on on this person whatever it might be in America you have the the clear split between agents of managers over here. You don't have that. And that's legally codified. That's not here. So, you have a situation here where managers just chase short-term brand deals. And that's, you know, the same for big sort of stars, if you will, but it's also, of course, the same for creators where they're nowhere near as big at the time anyway. Uh the money was coming, but it wasn't absolutely massive in the same way that you'd have for your sort of A-listers or your equivalent over here. So, again, you have just agencies scrambling for deals. What that means is there's a big vacuum for those that have potential to build something much more meaningful, but don't have anyone doing it for them. So the conversation with the side men through Sam was you know let's talk to you guys and say well actually I've been at YMU helping to build strategically creatively from a proper management perspective and why you were brilliant at that for a long time. That was my role there. Let's actually put something together for you that shows a vision. You're here where can you go and how can we help you get there? Um across a number of different areas and we had this deck. I think it might have been the first time they've been presented like a proper strategy deck for them which is crazy considering at the time they had like 9 million 10 million subscribers.

Um what is it now by the way? 22 on their main channels, collectively about 140 across all all of them individually in the group. Um but you know country

Yeah no I mean it's insane but you you put that debt together and it had you know restaurants uh it had spirit brand it had um you know building out in the states building out in China it had obviously TV documentaries all this this world of opportunity right and most talent interesting I think again I don't like the word talent but engineered from being in a talent agency most talent have the same spokes and and different talent have the ability to do different things right but the opportunities are like there's maybe 20 things you could possibly do whether it's you know getting into video, documentaries, maybe it's on screen stream, whatever it might be, there's a certain amount of things you

And there's an ecosystem, isn't there? Or you might call it a flywheel. So, if you simply optimize for short-term revenue,

Yeah, you're totally missing because what are the options? You have audience. Audience is always the gold. You have audience. Brands want to advertise to audience. You do brand deals. That's it. Maybe you do TV or maybe you do a few other sort of very sort of transactional commercial bits, but in reality, you know, that stuff doesn't pay nearly as much as your AdSense. And the problem with YouTubers is that they make a considerable considerable amount of money from ad revenue directly through YouTube, which means that their expectation of income, but also what TV and the traditional players and channels can offer is night and day to just them going and making more videos themselves. Totally different dynamic to traditional talent who are pay for play, right? you show up, you get paid because you're in this documentary on channel 4, you're in this show, whatever it might be. Very different world. So, they're reliant on that system. YouTubers and creators are not reliant. In fact, that system is actually financially a sacrifice. They're going to lose money doing it. So, it has to be worth their while. That's a whole another thing. But anyway, so we we speak to the boys. There was like 15 different things we we proposed for them to do. And um they were like, "Yeah, let's give it let's go for it." So, left YMU. We started Arcade in the beginning of 20 well, April 2021. And we basically spent the first six months rattling through the ones that passed the voting system. So we had a we put them all in a spreadsheet. They all voted on them 1 to 10. We pumped out a number and a sort of color coding of the ideas they wanted to do and the top two were restaurant and alcohol brand. Uh we had in their membership club, we had a hotel, we had trading cards, all this different stuff. Very much thinking like how big can you go? What what can we do? What would you love to do? Let's try and make it happen. And then yeah like fast forward now this is into the fifth year. Um we've done most a lot of those things. All the things that pass actually I think we have that we have actually now done. So we have sides which is a fried fried chicken chains going up to its eighth store in the UK. Got 15 coming in the UK this year. Launched in Singapore last week. We've got XX Vodka which is one of the highest sellers in Weatherspoons and all around retailers. Best cereal cereal brand which is in retailers like Morrison's and Tesla.

Where's my nearest sides if I want to go try it out? I'm quite keen on Oh, you got to check it out. We've got Blue Water. We've got Mary Blue Water. I try not to leave Kent where possible.

Yeah, there we go. There we go. And Lakeside as well. Lakes Side not far. Yeah. for you.

Good. That's it. That's it. We got membership clubside plus. Uh we've got VC fund upside. Um got production company which is the home for the reality show inside which went on Netflix and got number three globally which is great and hopefully building out more with them. Um yeah, and then obviously the charity matches. Done three charity matches together. 90,000 at Wembley at the last one. Sold out in I think was 180 minutes which is great. Fastest selling football match ever at Wembley. Thank you very much. The word football's debatable but we'll take it. Uh London Stadium prior to that and then uh Charlton in 2022. Um, and yeah, and then beyond that, beat Mariah Care at Christmas with Christmas joins. I mean, I say nothing beats that, the cherry, the icing. We beat the queen of Christmas at our own game. Thank you very much. In 2022 as well. So, we've basically been on this journey of of what I would call obviously the brands, uh, scaling the team that's now gone from one employee when we started to 50 people in cyber entertainment. Um, building out moments I would say that are kind of on top of their core, which is YouTube. So, YouTube is always the core. Cyber Sunday goes out every single week. You know, it's an hour. By the way, this is a a momentous week in which to mention YouTube because of course it's now the UK's second most watched channel on the TV

And it's only getting started. It is. It is. We should have predicted. I mean, I did predict it a bit, but I mean it's amazing how this has taken people by surprise. Jimmy Carr's great phrase was that YouTube became the biggest TV channel in the world and nobody noticed.

Yeah. And it's absolutely true. I mean, like again if you're in the space, we've been seeing it for a long time. It's no surprise at I was on um BBC on Thursday talking about it on BBC News and saying like for anyone who's been watching with their eyes open, why is anybody surprised at this? Of course, YouTube is the biggest. And you know, I think one thing that the numbers skew a little bit is, you know, the biggest driver on TV screens is is parents putting on for their kids, right? That's like that's actually where the biggest amount of traffic is coming from. It's Peppa Pig. It's Miss Rachel gets, you know, billions of views of video. Now, obviously with Netflix, like that's where people are sitting down and they're just on for hours and hours and hours, but nonetheless,

So auto play is a really really Yeah. But also, you know, especially with like the nursery rams, I mean, if you got the young kids, like, you know, some of that content, it might be an hour and a half, 2 hours long, and they're just churning, churning, churning. The watch time is obscene. That's why Miss Rachel literally has billions of views a video. I think her lowest video maybe is like 250 million, 300 million views. I mean, that's obscene. But that's where the traffic's really come from on on the TV screen.

Can I briefly interrupt with my favorite Peppa Pig story, cuz I have to tell you. Okay, so there's an episode of Peppa Pig called Mr. skinny legs in which George mischievously hides a spider in the bed of Peppa's doll's house. And Peppa goes upstairs, discovers there's a spider in the bed in the doll's house, and gets deeply alarmed. And Daddy Pig, who's the kind of voice of reason in most episodes of Peppa Pig. Daddy Pig reassures Peppa and says, "Don't worry, Peppa. Spiders are very, very small and can't possibly hurt you." Now, the episode went out unedited in Australia. So, there were literally a million Australian like kids being spiders. Nothing to worry about.

Sorry. And I suppose that's more of a problem when you have YouTube content because of course sometimes you need to edit it for a specific climate or audience. so British and and and that's and sorry Australians I shouldn't find that funny but but I kind of do in a very evil way but but like like if you think about like YouTube's been like the thing that set so many of the emerging brands apart like for example with a brand like Gym Shark a a key factor when selecting creators to work with was are they on YouTube because it's how much is that audience invested in them and how much time are they spending you see that with streamers now as well Right. The longer you can get people to spend time with you, the longer the dwell time, the longer the watch time, the longer the commitment, the greater the advocacy usually.

I think if they want to, they can seize another land grab by creating as well as YouTube music and YouTube kids, they can actually create YouTube audio. By which I mean is if you're in the car where it's generally not safe to watch a screen, they could actually cherrypick content which is perfectly consumable. Well, like this, I guess. I hope. I hope totally without video.

Yeah. And so they could actually make a grab for the ear as well as the eye if they want to. Well, you have YouTube Premium, right? So YouTube best investment of all time.

It feels expensive at the start and then you use it. I'm never going back. No. What happens is when you don't use it, I think we should take 3% of the UK's education budget and buy the entire population YouTube premium.

Thank you very much. Australia would not agree with you, Rory. Southern Australia would not agree with they've just banned it for under 16. YouTube. There's YouTube kids.

I know, but between 13 and 16, you can have an account. But still, they banned. How will my kids learn how to descale a washing machine? If if it's These Australians are about authentic as well, aren't they? They're completely whack.

I know. Australian. What you got to remember about Australia, by the way, is it's a mixture of a totally free and easy culture and one that's surprisingly oppressive. And one Australian explains this to me. He said, "What you got to remember is that some of us are descended from the convicts, but some of us are descended from the gods." That's very good. Yeah. And I think because you hear from a lot of Australians, the resentment, espec specifically to Australian politics, there's this extreme sort of, as you say, thread that carries through in Australian politics often and you see a lot of people maybe the the prison descendants who push back quite heavily against it. They're not happy about it at all. It seems like Australian politics is never happy and never content. Not that it's most places, but definitely not there. But they banned I mean they said that you know they want to protect the kids from the wolves and they use quite extreme language to describe YouTube and I'm like have you ever have you been on YouTube in the last five years it's actually incredibly safe. There's hardly any really out there dangerous content you clean that act up in 2017. So, as with Tik Tok, when my kids told me I'm old, right? When my kids told me they use Tik Tok as a search engine, I was like, "What?" Okay, cuz I just assumed you let the algorithm go. And I I like Tik Tok. I It depends on who you are, whether Tik Tok's malign or whether it's just entertaining depends on the algorithm and who you are. But there was a there was a weird threshold which was crossed a kind of you tipping point where YouTube became so unbelievably abundant with content that you could actually search for something with the confident expectation you know if I want if I want to see an animation of the battle of thermopoly now I don't know by the way I don't know if that exists I haven't actually searched for it okay um I'm pretty confident that there's someone somewhere in the world who's produced some sort of you know animated description of a battle that happened in the fifth century BC or whatever. Okay. And also um it's glorious because a whole load of people discover forms of entertainment which television had neglected. This isn't my most embarrassing confession. Okay. about 4% of my YouTube viewing is watching people solve mathematical equations and it's just someone it's usually an Indian guy and it's a pen and a bit of paper and they talk you through solving an interesting maths problem. Now if you told me a year ago that that would be a form of entertainment I would have had you committed. Okay that's what but TV fundamentally didn't experiment very well because it's very format because you can't get into niches because niches don't don't work in terms of radio. Apparently, there's a whole group of people. It's like 50,000 people for whom train spotting is much much too mainstream. They're into elevator repair and servicing.

It's crazy. There's some people that watch people chop grass, right? It's absolutely crazy. That looks Hey, if you're into whatever drain unblocking, come on. We all enjoy that, right?

Satisfying is the category apparently. And it's funny. I remember when YouTube um was something that people searched for. So, how-to videos was always at the top, right? So, I remember whole videos, try on videos, it was always like a search for something. And then I remember there was a member in my team uh I think it's now like seven years ago. And he was like, I actually don't go to YouTube to search. I go to YouTube to discover. And I was like, that's interesting. I never thought of YouTube in that almost like framework. And now Tik Tok did the reverse, if you will. They started with the discovery and they realized that actually it's more of a confirmation tool. So people would go on Google, look for a restaurant, a hotel, a location, get the list of what's the best locations that have been rated by people on Trip Advisor or whatever and then go on Tik Tok to confirm

From the people that have actually been there. Yeah. Because because Tik Tok feels so authentic and real and ultimately rewards authenticity more than any other platforms. And obviously YouTube the problem and the challenge is you know you and this is why it's so absurd to call it dangerous and whatever else because it filters

What's the idea of the danger because cuz I've just got this brilliant solution to the British economy which is we let the Australians ban YouTube, right? We give everybody in Britain YouTube premium for free. Okay. And then in 10 years time whenever an Australian needs a drain unblocked they'll have to call a Brit or state VPN. Yeah. State to build a VPN because I mean it's like have you not heard of VPN? You can just bypass it. and also they're letting kids so you can technically watch it but you can't create an account which is the most absurd thing. If you can't produce any content, right? And you can't make any libraries or playlist isn't one of the most important skills of today. Being able to create content, being able to experiment with with with videos, why are you stopping that bit?

By the way, when I write in the spectator and it's a very fractious audience, okay, the only one of very few things I ever say which gets universal agreement in the comments is that YouTube Premium is brilliant. Oh, yeah. I think it's the great, you know, I mean, okay, my father died last year. He was 93. It contributed very significantly to the happiness of the last 10 years of his life. Okay. It's not demographically narrow. It's it's genuinely and actually the economist did a survey which said basically it's also quite low on toxicity.

Yeah. Unless you seek it out completely. But also, you know, they had their ad apocalypse in 2017 and that was when, you know, they were having ads shown against videos that weren't being put through any filter system. And ultimately their ad system wasn't mature enough to manage the types of content that were going on the platform but also the advertisers that were starting to spend and they had a massive crisis obviously you know advertisers pulled millions and millions out and they had to totally change the system but since then especially in the last few years what risky dangerous you know toxic content are you really like you really going to find on YouTube not at all because it's so well censored because of the advertising that relies on on brand safety right which is an absolutely top priority for them

And also two things of course if you appear uh you're not anonymous. I I agree with Scott Galloway's comment that a lot of the toxicity of social media is just created by anonymity, but also it requires some degree of effort and some degree it's a bit like the thing that I don't really support postal voting because I think you should go for a bit of a walk before you vote, right? Only 100 yards, okay? You know, I don't think you should vote by text, right? Because it's kind of impulsive and and actually, by the way, there's the risk of coercion and all sorts of other things. in family coercion.

Um, but in the same way before you say something, you know, you're probably going to record it, you're going to watch it, you're going to have that little moment of, "Do I really want to say this?" You know what I mean? And so, well, you know, the problem with a lot of social media is that there's the knee-jerk, the knee-jerk, boring response. Okay.

But YouTube is not social media, and this is the big thing, right? You alluded to it. It's a search engine. I remember going in for meetings with them 10 years ago, and they were drumming that home that YouTube is not social media. It's a search engine. It's the video equivalent to to Google effectively. And I think it's important to remember that which is why it's also it's all about the ranking comments. Yes, you might get hate. You might get people doing whatever they're doing and saying whatever they're saying, but it won't get ranked. You won't see it. Same with videos. If the videos aren't good, if they don't check past clickthrough rate, average duration, satisfaction, which is the key three things for any YouTube video to do well, it won't get seen. It won't get it won't get ranked in any way highly. So, it it incentivizes and rewards good content and incentivizes and rewards effort to make content that satisfies, etc. And that's a totally different thing to every other platform.

And going back to your point, because the game has it's not changed, it's always been the case. But then because more people are also investing in YouTube Premium, more content creators in the place, the bar is a lot higher, especially for brands that are being left behind, right? So we're starting to get into this entertainment era where we're always talking about the fact that actually this is a fight for attention and brands are not just competing with each other or people that are selling the same thing. You're competing with everybody, right? cat videos, memes, YouTubers, everyone's trying to compete for exactly the same thing, right? So, with that in mind, there's a lot of brands or there's a lot of creators that are amassing these massive massing followings. And obviously, you've seen success of brands like the Sidemen, etc., etc., making that transition from just being entertainers to also being great business starters, right? Why is it that so many uh creators that have a massive amount of audience, like they have millions of followers, they still can't make that transition? what are they getting? So, this is my big sort of controversial point. I'm I'm very passionate about this concept, right? That most creators are cooked that the economy that's coming into the world of of content and social media does not actually support high value for individual creators. And what you're seeing right now is a lot of creators get squeezed and squeezed and squeezed in terms of value. Why? There's so much saturation. Like with any economy, when you have too much supply, what happens? The price goes down. And that's what's happening.

Except there's usually a winner takes all effect, isn't there? So there will be a small number of people correct and you've got but the cream is is is decreasing but the the what I would call the working class creator set is drastically increasing and even those that maybe were doing okay before when they were relatively close to the top they didn't quite get up to that scale which creates that intrinsic value of of just superized audience for example the Mr. of the world the side but you could probably

Count the number of creators who have that super scale globally, or maybe two hands. Really, I mean, that's a sort of universal law when you have network effects. I mean, the famous example of this is what happened to opera singers when they invented the gramophone, okay? So, beforehand, if you were the fifth best opera singer in Denmark, you know, you'd make an okay living, okay? Because there were lots of times when the four better opera singers, you know, weren't free and who opera, if such a thing exists, needed an opera singer, and you came in. In the in the world of recorded records, everybody wanted Caruso, okay? And so Caruso basically, in terms of record sales as opposed to opera appearances, absolutely coined it, and everybody else was also-ran. And I mean, the one of the things is, there's probably room for a winner in quite a lot of categories because the great thing about YouTube is there are a lot of, you know, there's there's going to be a winner in the drain unblocking category, you know?

Correct. But but specificity is now more important than ever. So, to go to the point, the broad church entertainment banner, if you will, has been so squeezed. Um, but also because, and this is, and YouTube's obviously one element, but YouTube is is very difficult because to make content that can build enough value requires a lot of volume. A lot of creators, I think, also got stuck with the Mr. Beastification, if you will, style of content, which required bigger, bigger, bigger, more scale, more scale. And the economics don't match up to to the YouTube, which is that, you know, the RPMs, what you're making per video, generally are okay, but they're not, it's not life-changing money unless you're able to do enough volume. Comes obviously with being able to fund the volume. But if your videos are so big that they require months and months and months of planning to get up to that scale of making it, you know, what you've trained your audience to expect, which is big in scale and and grand in terms of concept and idea.

How do you top? But also, how do you afford that? How do you pay for that? Because you're not going to make the money, you're not going to make enough of the money back from the videos you're making. So, it's this vicious cycle. So, I think a lot of creators are actually trapped in that in that sort of scale-up point where they also, and this is the other challenge, because YouTube is for most of them their primary revenue stream. Your payroll is funded by the type of content that you're making and consistently producing to create to to build enough of an audience to pay your bills. What does that mean? It means you're trapped creatively. You can't experiment and take risks because, hold on a minute, my payroll is literally funded by the type of content I've set my audience up to expect. If I change that, the maybe it'll dip and come back up if you were to do five more of them over time.

Who's who's willing to take the risk and who's funding the gaps? There's a massive funding and bridge financing problem. I would actually say for risk-taking, which will allow those creators to scale up and get bigger. Otherwise, they're trapped on the treadmill. But but like, if you think about the size of the creator economy, the size of how the sheer amount of money that goes through creatives, still the finance companies, the business world still just don't understand it.

Totally. Why is that?

I think because most of them don't watch YouTube. I think it's one thing you keep finding out and you you speak to TV production companies, broadcast, they're not watching it. They don't understand it.

TV people are obsessed with the TV world of narrow celebrity. In other words, someone who's on TV on breakfast time in their particular pantheon, okay, is vastly superior to someone with an audience of like 5 million on YouTube.

Completely narrow celebrity, but also institutionally backed things and voices that have that kind of cultural credibility tick, if you will, that is, you know, in the newspaper, on the big screen, whatever it might be, by ITV, BBC, whatever it is, rather than the audience actually. By the way, there's also a status thing, and I always tease people in radio that everybody in radio secretly wants to work in TV. And I always joke that working in radio is actually a joy, whereas working in TV is a pain in the ass. Okay. But you have this thing which is TV in a way turned its back on people in a room talking. Not I think because the audience didn't like watching it, but in a weird way because people wanted to make drama or they wanted to make, you know. And I think there's a weird, you know, there is a weird thing that what people, what gives you status within the TV world, probably isn't very well aligned with necessarily what people want to watch.

Totally. But also to the point of, you know, traditional TV and linear specifically is obviously on the massive decrease. How can they in any way compete with the Netflixes, the Amazons, those that have literally infinite money to invest into content?

By the way, by the way, really critical thing which nobody talks about, but I'm a behavioral science choice architecture nerd.

Two things have fundamentally happened with the household TV. Let's forget about actually laptops, mobiles, tablets, okay? The household TV. One of which is when you turned on a TV 10 years ago, it defaulted to linear broadcast terrestrial or TV. Okay. Your Sky box would turn on. Okay.

Now, one, Netflix and YouTube probably pay quite a lot of money to have a unique button on the remote control.

Um, but that's not even that necessary because now when you turn on a TV, the Samsung hub appears and it says, "Do you want to watch YouTube? Do you want to watch Netflix? Do you want to watch iPlayer? Or maybe you want to watch TV?" A second thing happened, of course, which is that in a lot of rooms of the house. Okay. You, if you want to watch linear broadcast TV, you've got to connect it to something.

Yeah.

Whereas OTA, you've only got to connect your Wi-Fi, which assuming you've got, you know, you don't live in Chadsworth. Okay. Basically covers the whole house.

So, they're going to be a load of people who are just going to install a TV in the kids' bedroom and going to go, "Do I want to pay Sky for a whole separate multi-room package?" This is why I think this is what Sky is doing with Sky Glass. Okay. It's a desperate attempt not to be de-positioned.

Oh.

Okay. Or or intermediated.

By effectively the Samsung, um, uh, what would you call it? You know, the Samsung choice architecture.

The no, totally agree. And to your point, how much of TV just relied on the default option? And again, this is the thing. We're in a world now where the the TVs and the platform and, you know, the actual tech itself is engineering choice. Everything is driven by choice today. And that's the bit that they can't compete with and catch up with, 'cause they've been used to just being the default.

If Sky 1 had been allowed to be channel 101 on Sky, which they weren't, 101, 102, 103, 104, 105 are reserved. Okay. I mean, I always thought they could have been clever and just put it one up at the very bottom of the thing and then made it visible on the on the EPG. Okay. But we'll park that one. You didn't think of that, Sky, did you? Okay. But I think it'll be, you know, I think it'll be one of the major channels, you know, if they've been allowed to basically make it channel 101.

I I think the biggest thing that still keeps businesses like Sky around is uh sport, right? And the live streaming of sport. And I heard some news about like the Premier League trying to have their own streaming system, right? What is that going to do for broadcasting? I always, so one of the early ideas I had uh when I first, this was like 2015 time, I was like, well, if you look at Meta and like Instagram, a lot of the conversations around teams happen on the club's account, right? Like people follow their favorite club. Why didn't they make a big purchase to try to get streaming on the pages in which you follow anyway? That would literally make that transition from uh almost like traditional TV to digital happen. But Netflix have got it. They made the big move with WWE, and that's been massive. Not only did they do the streaming of WWE live streaming, they also did the storytelling around it. And now I can't get away from it, and I love the WWE. So I grew up on that. It's never been higher. And now if you're looking at the storytelling that's happening, and going back to the whole play around being the landlord, I can see Netflix making that move. It's looking at YouTube, seeing what are the best shows that are happening over there. We saw that with the side with the side show. We saw with Pop the Balloon that's happening as well, right? They're starting to see, okay, who are better entertainers than us, if you will, who are more connected than us, and how can we level them up to like our space now? And I think that's what's going to be happening in the next couple of years.

It's about necessity. To your point, who can connect more than us? Like they, I think, realize that Netflix, you know, brilliant partners for us, but you can see that from a top level, they're realizing they aren't as dialed in to culture as they were when there was far more of a monopoly on culture, of course. So audience go audience a streamers for on YouTube and social, and they're turning to people like the Sidemen, and that's where the audience are. So therefore, we need them on the platform because they are clearly connecting in a way that traditional production just simply hasn't been able to do.

And if you think about it this way, because first, you'd have to go on to these like bidding wars to win these shows from other production houses. And what would happen is they would create Netflix own shows. And what would happen with Netflix's profits? Like, what I saw the trend is, is like they're either really high and then they go down, but that's when they're producing stuff. Whereas if you can fill that gap with like shows from like highly connected creators, you can just keep going on the up and up, which is phenomenal.

But also, the notion of content efficiency is now one of the biggest phrases that you can see in all the reports and everything else that Netflix put out. I'm not saying it was directly linked to Insight. I don't think it was. But they definitely, it was a light bulb moment for a lot of people that, hold on a minute, we can get a show here that costs 10x than this big huge splashy production over here, but drives 10x more reach and engagement around the world. Why are we not just doing that each and every day?

We probably should give a bit of a high five to Channel 5 here.

I love Channel 5.

Obsessed with Channel 5.

If you think about it as a terrestrial, terrestrial, okay, they they know what they are. They do what they do very, very well. We, you know, every now and then we all have a thing that will cause us to go there.

Totally. And, um, I have to say, you know, given given the fact that it, you know, in a sense, in terms of choice architecture, it was the most unpromising slot on the dial, uh, they've actually played a blinder with it.

They've done unbelievably well, and that's because they know their place, and also fundamentally, they know their audience. And I think the problem with TV is it's been traditional linear broadcasting has been deluded around who the audience are and who the next audience are coming up. The reality is there isn't one. So go to the audience that are there and are going to ultimately die with the technology in 50 years' time. That's okay. That's enough of a slow burn. But satisfy the audience who are actually there. Stop trying to appeal to people who aren't watching the form of TV that you're producing.

Yeah.

By the way, I mean, interestingly, uh, that point about knowing your audience, we did a survey, uh, a bit of work we did professionally with a major broadcaster.

And, uh, one of the things we found is that the, by the way, this is also true of people who work in marketing, okay? They're in terms of their personality type, they're not very well aligned with their audience. I mean, in marketing, what you know, one factor in marketing is everybody in marketing, myself included, okay, is massively high on what's called openness in terms of the big five personality values, okay? What is it? Conscientiousness, openness, agreeableness, neuroticism, and, um, extraversion, okay? And everybody in marketing is massively high on openness to. And and they then work in a culture that's massively high in openness, which is keen to display effectively. I mean, in a sense, you know, humanity is always this battle between, do I fit in? Do I stand out? Okay? You know, there's that deep down in our humanity. Broadly speaking, if you want to survive, you fit in. If you're dating, you want to stand out. Okay? You know,

Um,

And people in TV are massively high on this openness thing that, you know, you know, in other words, they don't want to buy a mainstream car, you know? And then, and it's true of marketers as well. And and it leads to this extraordinary misalignment with what they think people want.

Yeah. Oh, I always used to say that the the marketing world is filled with a lot of people that don't want to lose instead of want to win, right? So, it's almost like, we'll wait for the winners and then we'll copy, right? That's typically what tends to happen because everyone's scared to fail. Everyone's scared to lose. But then what happens is it's filled with a lot of performative acts where you do things that make it look like you're actually gaining progress, but really you're not, right? It's like, you will say that you want to invest in an unskippable ad on YouTube, but the first thing that happens when you go home is that you skip those ads by going and doing something or spending your time somewhere else. So you don't create or produce like how you consume, right? You almost like put on your marketing brand hat on,

get into this almost like main character syndrome, believing that the world should care about you, but really you have to earn that, right? And I think that's the difference between what you get from like creators versus what you're getting from the production side is like they're outperforming because they're outconnecting because they're thinking about the end consumer and producing for the end consumer as opposed to producing for themselves.

But it's about incentivization, right? I mean, those bigger cruise ship companies, whoever it might be, of course, they struggle with pivoting and risk because everyone's incentives are based on steady security growth. And obviously, that's why CMOs have such a high amount of churn, and that's why people are constantly scared about being fired. And of course, that that spills into the traditional TV world too. You know, you're there to collect your paycheck, to get your bonus, to go home, and make sure you don't crash the whole thing. Risk-taking is seldom uh valued. And obviously, it doesn't go for every company, but Gymshark, you guys were a rocket ship because you took risks, you tried things, and you were aggressively open about that that principle, rather. And obviously, it's easier when you're going up than when you're there. You have to sustain, especially when you're traded publicly and you know the other factors which then determine your profile for risk. But of course, it's very difficult to make those shifts. But to your point, of course, when you're a content creator, when you're a YouTuber specifically, but any creator really, you're entirely governed by how you satisfy your audience and how you show up again and again and again to get people to click into your videos, to stay and be satisfied. And ultimately, you get paid off the back of that. If you don't do that, you don't get paid. The incentives are all around the audience.

I I'm also intrigued by the creative nature of, let's say, uh, in-content promotion by influencers. And I think one of the interesting things is presumably you sign a contract, and I've never done it, you know, um, uh, but you sign a contract, and you are expected to say certain things, okay? I've always thought there are ways in which you could embed the, I mean, famously when TV advertising started in the US, go back to that, they'd say, "And now a word from our sponsor," okay? Right. And, and, you know, and radio programs were brought to you by. And we're still in that period. Okay.

It's almost like the, you know, the 1940s in the United States.

In terms of the way in which you're watching some review of something, and then suddenly the guy starts talking about VPNs.

Go to the NBA, and you'll just hear that all the time. This is brought to you by Gary.

Totally. But I would say though,

I think there better, I think just there are better ways of doing it. I one of the things I would say is I would give permission to the person to include a few negatives.

Okay? Because one of the things we know about persuasion is if you say

Seven out of five versus five out of five.

Yeah, you've got it exactly. Yeah. Yeah. If you actually say, look, to be honest, it is a bit expensive, and the one downside is there isn't much boot space. But in every other respect,

you know, I I'm looking at electric cars at the moment. And weirdly, the most one of the most powerful selling messages is a negative I don't care about. Okay. Now, I'm Welsh. I'm about 5'8". My wife's tiny. My kids, they're 25, but they're actually miniature. And one of the best selling points is, oh, there's not much rear headroom.

My kids are about three feet high. Okay, who cares? And so, you know, little things, little moments of candor, you know, all you know, you can actually turn advertising into a service.

Yeah.

Okay. Can genuinely be useful if you do it really well.

Go home today if you and watch Side Sunday on This Week, which was the Storage Wars equivalent, um, which had a Lego partnership in it, which was the first time. And this is exactly what, because we believe the same thing.

I need to watch this.

It is the first time that we, from our own our knowledge, that a YouTuber has has bought or was sold media through publicists on a YouTube channel as a media buy in a very traditional way, but in a way that has created an integration into the content itself, wrapped around the content too. And what they did is they had a Lego, they had storage boards, essentially, that type of concept, but imagine one of the whole units are full of Lego, and it paired in with, and it was a total reaction. The boys opened up, they were like, "Oh, this is amazing." They had like Lego versions of themselves, and then we did a giveaway, um, on site as well, and we had this full campaign around it. But it was, I mean, for the giveaway, for example, this is how authentic it is when it's in the content and then layered in with some other CTA, 116,000 competition entries.

116,000 off the back of it. Super important for brands to be co-creators with the creators, right? You should

an approach that brands keep getting wrong. And we'll touch on the ins and outs of like actually running a creative business. I I really want to understand that.

The the problem is that brands always say, "This is our message. We want to force it down in this way." It should really be, "Here's who we are. Here's what we want the audience to know about us. Let's go to the best creators that can articulate it in the best way, and let's co-create with them." And the best form of marketing is a dramatic demonstration, right? So, how's the best way that we can cook with? I used to remember the guys at Manscaped,

right? They would always have a very like a joke about balls, right, in that ad reads, right? Because that's what the brand's all about. It's lighthearted, and it was always integrated into the podcast content. And I you tend to see the best brands that best communicate and collaborate with creators are the ones that actually like co-create with them. They leave the feeling of the brand in the content, but they let the creator take the lead on how they always think one of the best examples of this was that early podcast sponsorship boom when you had like Casper mattress, right? And Casper mattress were everywhere all the time, but in such an authentic way. And no surprise, they're the number one bestselling mattress in America within not very long because they had a total, to your point, co-creation approach. They gave it was all podcast. They gave the reads to the podcast host. They let them do their thing with it. They had, yes, of course, the beats in the script, but then every time you heard it, it felt authentic. Yes. You know, it was an ad, but it felt like it was authentically translated, and that gave it real for the ad.

Yeah. And by the end, you're like, "Yeah, maybe I'll get a Casper mattress." You know, it worked. It worked.

Uh, so one of the big things there is like, obviously we talked about the big following, we talked about authenticity, we talked about co-creation, etc., etc. But then, what is the difficulty about having like starting and growing a creator brand? You've created multiple seven-figure businesses. What's the biggest challenge that comes with it that other maybe remads don't see the same challenge?

I mean, look, it's one of those things. I feel like sometimes where, you know, the young kids who try who go into these traditional marketing industries and then get hit with the reality of them, which you, if you'd asked somebody, they would have told us straight off the bat. The biggest challenge with any product, specifically that's physical, right? Digital products are different, that's creator-led, is cash.

Mhm.

Surprise. Cash to support the expectations of the retailer, and cash to support the expectations of of of the audience as well. What I mean by that is, you know, for example, with our alcohol brand, XX Vodka, you have huge amount of demand. Same with Best Cereal, any of the things we're doing, or any creator expectations all the way up there.

Mhm.

Two things happen. One is the expectation in terms of how much they buy goes to an unhealthy level because they're also not necessarily from this world. So they don't understand, okay, cool. Yes, of course it goes up here for now, but it will come back down. They'll have to go back up, and you have to manage that without overbuying. So that's a problem that you see. But then also, to satisfy the demand, of course, there comes a lot of cost in terms of, you know, supporting with retail media, sponsorships, around everything else that needs to be done to look after the retailers who bought a huge amount of stock because they've expected sales to be there and sustain forever. And the reality is it goes on that Jacob, everything goes on that Jacob, just how deep it will go. And I think for us, anyway, we've definitely learned that, you know, cash is ultimately the absolute fundamental lifeblood of these of retail businesses that have tiny margins, have huge amounts of cost attached, and you have to be able to support them long-term. You look at something like Fastables, Mr. Beast, 250 million in retail sales, right? 25 million in in America. Hershey's, same character there, 6 billion. Do you see the the scale of that, right? So, yes. Amazing. But that's the biggest in the world at the highest level, 250 million, and he any gross, the gross profit is 25 million pre all their staff cost, their marketing activity, and everything else. Maybe you net with, I don't know, five, six. If you think about the sheer efforts and the scale of the audience and everything else that's gone into getting that 250, and that's your ultimate net, you have to be so, the amount of funding you need.

Does that allow for repeat purchase though? Because I'm not sure we're looking at lifetime value there. You see.

Well, for sure. I mean,

this is this is the curse of marketing that it's held responsible for every penny of costs, but it's only allowed to claim the credit for sales in a very narrow window after they occur, after the marketing activity occurs. But repeat purchase also is about the product quality, of course, and that's where, you know. So, you know, and I think with Feasible, they've done a great job of reformulating because they had a lot of criticism upfront. They changed the whole product, and I think, you know, they're doing well as a result. But it's just the learning of course that yes, when you have a huge audience, expectations go through the roof, retailer expectations, audience expectations, the ability to actually just get the product distributed, but that comes with a huge amount of cost. Let alone when you're in a business like alcohol, when you have huge amounts of tax, you know, I think we're paying £8 a bottle just to get it out of a bonded warehouse. I mean, that is obscene, like the amount of money for every order that comes from anyone big, you're paying hundreds of thousands, if not millions, just to get out of the warehouse and over to them overnight immediately. Right? So, it's those things, the float you need to be able to run these things. And of course, that's why you go to see a DA and they go, you know, well, we when we launch a new brand, obviously, you know, they're spending 15 million standard as a budget for a test new brand that they're trying to get out into the market. And you see why. But also the reality of the margins of a cereal brand or anything else is they're so low on the product, 'cause obviously they're two-pound boxes. You're not going to make enough to satisfy the growth. So, you need to be able to fund it. Who's going to pay the bill?

There's genuinely a worry I have about the future of digital advertising, which is that if you have these extraordinary costs, whether they're imposed by Meta or Google or anybody else, okay, the only people who will be able to afford to advertise, uh, high margin brands, luxury goods. Okay?

At some level, this will create a massive distortion in the economy. Okay? Where effectively people are waking. There was always a vague in the old-fashioned media world, advertising world, okay, you would always see more advertising for luxury goods than was commensurate with where you spent your money, unless you were, you know, Mr. Blingtastic, right? But I notice now that I never see any online ads for Unilever or P&G products. Okay? And my problem with that is that, okay, there are, you know, there are advertisers who are more interested in me than P&G is because my, you know, my expenditure on shampoo is, you know, not disproportionately high or anything like that. But the fact that I don't see anything online

for first of all, the world's biggest advertisers, but secondly, something I do spend sort of 40 quid a month on, okay? In an advertising ecosystem, if it's to work, uh, roughly speaking, we should see advertising that's vaguely commensurate with where the contents of our wallets end up.

And I'm seeing this extraordinary distortion where weird categories, anything with a subscription, so high lifetime value, in other words, automatic repeat purchase. Okay? Anything super high margin, anything with high attribution gets advertised to buggery, completely. Okay? Whereas things that I quite routinely use and buy, but where there's low attribution, low margin, etc., I never see.

Now, that's that's ultimately at the level of the individual brand, it's rational. At the level of the ecosystem, it's grotesque distortion.

Yeah. But it's because you can get a profitable model with the advertising very quickly and you can say, well, actually, if we put £5 in, we get £15, £20 back depending on the margin of the product. You can't do that with a two-pound box of cereal that has all the costs attached to everything else. So, of course, they're not going to, they're just not going to be there. I mean, if you had perfect data, funnily enough, you might be able to calculate the lifetime value of a new Frosties customer. Okay.

Um, but generally in in FMCG world, you're dealing with repertoires. People have a repertoire.

In VPN world, you're dealing with 100%. By the way, one of the most interesting things, you're not going to believe this, but but a cat

is more valuable to a cat food advertiser than a human is to a food advertiser because a cat only eats cat food. So, you get 100% share of throat. I know share of throat is the world's most unattractive. Uh, okay. Literally, I'm not making this up, okay? I mean, drinks brands do talk about share of throat, okay? Horrible phrase. Okay, that's crazy. It sounds like something a porn star would come up with. Okay. But a cat will basically, and particularly because cats are really picky, you can get 100% of that. Actually, Dreamies probably come in as a cat luxury good, don't they? On top, but you get 100% of that money, okay? You're never, you know, I mean, unless you've got someone who's a really really fussy eater, okay, you're never going to 100% share of throat of a human. Now, a human's richer than a cat, and obviously more money is spent on human food than cat food. In actually, that's not totally true. I'm sure there are households where that's there's an exception where people starve themselves to buy premium food for their cat. But that is literally true that to at the individual brand level, you know, uh, gaining a cat customer is better than gaining a Frosties customer.

But then also, I also think that it's actually much deeper than that. I would love to give almost like credit to it being more of like a almost like a smart almost like hedge your bets kind of like decision, but I actually think that what you get because when you go to these pages like the pages of these Unilever brands, they're still putting content every day. They're still investing a lot in Meta ads, but they're not being creative. They're not co-creating with creators. And also because products are somewhat a necessity, they believe that people will come anyway. But I actually think that a lot of these industries are still around because they've not been disrupted yet. Once you've got people creators that go into these like unsexy industries and want to create a sexy brand, that's exactly what Mr. Beast said. Why don't we go to these spaces that have not been innovated and create our brand there instead of going to fashion and sport and all these like sexy industries where everyone's almost exaggerated.

The other thing I think we probably need to do is do more category advertising. Okay. So, one of my weird arguments are, let's say you were a really evil oil company, right? Okay. And you desperately wanted to discourage people from buying electric cars, okay? What would you do? You'd focus, I would argue, and I'm I'm an extremist here, okay? I'm, you know, I'm the provisional wing of the electrification army here, but I would argue that electric cars are better than gasoline cars in every respect except to uh range and the time it takes to fill them up.

I'd even debate the second one, by the way, because when I get home, I drive up, I go plug.

I don't have to stand over the plug for 8 minutes and then go in and buy charging, right? It's actually less time consuming than filling up the petrol, and I don't have to go in and buy a Ginsters and pay, right? I just plug in and walk away. I do check it's working, but I mean, it's literally 30 seconds. So the whole charging time thing, if you've got house charging, is irrelevant. And the range thing, in a country like the UK, is a distraction.

Now, the electric car manufacturers, by all competing on boasting about their range, have effectively directed people's attention towards the one negative of having an electric car, which isn't even that much of a negative, trust me. Okay? I mean, I had range anxiety once in four years with two electric cars. I had range anxiety with a petrol car once every four years 'cause I forgot to refill, and it was 1:00 in the morning, right?

It's the same.

And actually, electric car chargers are open at 1:00 in the morning. A lot of petrol stations aren't.

Yeah. Yeah, I'm I'm quite nocturnal, just so you know. Okay.

And it suddenly occurred to me that the electric car industry, by competing on a negative.

Yeah.

Nobody's done the, I mean, I did 'cause I did that weird thing where I said, "Imagine if all cars were electric and someone invented the internal combustion engine. You'd have them sectioned, right?" The electric motor, sorry, just just simple, simple. The electric motor is the most beautiful thing to translate energy generated from any source into momentum. Okay, it is just unbel genuine working-class guy who came from nowhere. Really, really interesting guy. I mean, if you want to if you want to idolize anybody, he's high on the list, right?

Um, and and and nobody's doing the category job.

Yeah. Now, you know, I I've always wanted to do for Gen Z a catering job because I noticed I'm al I use soap. A bar of [ __ ] soap, right? It's not washing properly if you put some spunky [ __ ] on your hand and rub it over your body. You need a Anybody else agree with you because

all young people, right, for I know, and what they what they think is they think soap's disgusting because you share it with other people. Okay. In fact, there's a magical chemical property of soap bars which means that actually basically they're totally sort of germicidal and also you've only got to rinse them for half seconds. It comes off every time. You see now nobody knows this, so they go, "Soap, it's really disgusting."

I mean, I do as an old person like.

The amount of memes that are going to come out of this podcast. I I do I do like teasing Gen Z because what I always tease my kids about Gen Z, if you grew up in the 80s, okay, they go, "Blah blah blah class A drugs, blah blah blah Molly, blah blah blah ket." And you go, "Okay, kids, that's enough about class A drugs. How about a cup of coffee?" And they go, "No, I've already had one today." What the hell? They're so wussy with conventional drugs. Right. I had two cigarettes yesterday. I was out of my head, and I smoked a second cigarette. These kids should have been around in the 80s. Anyway, sorry. That's my rant. But but I suddenly realized there are a whole lot of category problems. I love. Okay, if you took my idea where you take 5% of the government's education budget and you give everybody a YouTube Premium, the condition is that everybody's got to watch 10 minutes of educ the same 10 minutes of educational content every month to qualify for their YouTube Premium. And you could bring back government public information films like "Don't Litter." You know, I I miss all that stuff, you know, "Close gates so the animals don't escape," right? But also things like, 50% of the population have no clue about what in their home uses a lot of electricity.

And what doesn't use any.

Yeah. So I I, you know, just to give an anecdotal example, you know, somebody I know with a degree got really upset because some people stayed overnight and without asking charged their mobile phones in their bedroom. Okay, which is like, you know, you know, it's totally irrelevant. Okay. In terms of it, probably a couple of pence. I don't know what it is. Okay. Whereas if they left a fan heater on all night, they wouldn't have been that bothered. You see, and genuinely, people have no clue.

Yeah. And actually, if you want to buy an electric car, sorry guys, but you've literally got to sit down for 10 to 20 minutes and educate yourself on what a kilowatt hour is, and you know, and you know, what what all this stuff means. And the part of the reason I bought an electric car is 'cause my brother's a bloody physicist. And so he knows all the Maxwell's equation [ __ ] or whatever it is. Okay. And he knows, no, no, no. If it's a 50 kW charger, that will give you about 50 miles in 20 minutes. If it's a 100 kilowatt charger, it'll give you 100 miles in 20 minutes. Okay, now I get it. Right. I'm happy now. Okay.

And so, you know, we can, I don't mean anything that's politically sensitive. I just mean information about goddamn maths and physics, right?

You know, genuine educational stuff. If I can spend, you know, an hour a month, which I do, watching people solve maths equations, I think the public should be able to have YouTube Premium in exchange for just watching things which are incontestable scientific facts which massively contribute to your understanding of the world.

Well, there's this conversation. Oh, go. There is this conversation going going on from the BBC, right, around YouTube. Can they have more prominence? Should public service broadcasters have more prominence on a platform which is obviously, you know, a tech business, not editorial? They don't push things generally because they fall into some gray areas around curation and around what they can and can't do if they start saying, "Well, we push this thing and we don't push that thing," which is a legal gray area. But there is this argument about about PSBs. CBB's, BBC, you know, the kids' content in the BBC has always, I think, been one of the best things about it, actually, in terms of some of that stuff. And actually, and and again, to your point, great idea, and I think YouTube would love it, but it would also give PSBs a chance to have some of that real estate around, okay, what is being shown to kids across the country in an educational capacity as part of their YouTube Premium subscription for 5% of GDP.

Every time I give a talk on stage, I devote four minutes to the paceometer.

Okay. You've seen it, haven't you? No. Oh, okay. So, it's a speedometer. Standard speedometer. We all got one if you got a car. Okay. And then alongside it, it shows at that speed, how many minutes does it take to go 10 miles?

Yeah.

And what you realize when you see this, and by the way, I went on a speed awareness course. I'm not I'm not proud. Right.

And I turned up thinking this is going to be a load of bollocks, and it was brilliant.

My wife, my wife did the same. She was like, "I learned so much. That was so much fun."

And we'd all been driving for a few years, and you suddenly came away and went, "I never thought of it like that before." I'll give you I'll give you a great story. Okay. Speed awareness course. Two cars, one going 70, one going 100 miles an hour. Okay.

Mhm.

They're side by side. They both come around the corner. Okay. And they see an obstacle.

Mhm.

Like a tree across the road. They both brake simultaneously. They're identical cars. The car that was traveling at 70 screeches to a halt 6 inches from the tree. What speed is the car that was going 100 miles an hour going at when it hits the tree? And everybody says 70, 30 mph, because they think, well, it's going 30 mph faster, therefore, it's going to be going 30 mph faster when it hits the tree.

But A, there's reaction time during which the 100 mph car has traveled much further. And braking distance is exponential.

Mhm.

The car that hits the tree hits the tree at 70 mph.

Mhm.

So a car going at 70 breaks to a halt at point A. The car going at 100 is still going at 70 when it hits that point. Now, everybody should know that the paceometer shows you that if you accelerate from 20 to 30, every 10 miles, uh, that's right. Uh, okay. If you accelerate from 10 miles an hour to 20 miles an hour, uh, you're saving 30 minutes on a 10-mile journey. Okay. If you accelerate from sort of 70 to 80, you're saving like 1 minute 10. Yeah.

Okay. The faster you go, everything becomes worse. Energy consumption, um, danger, risk, serious injury risk goes up exponentially. Time saving is actually flattening off. Now, once people know that.

That's that's right. She was like, the difference when you think you're going, I know, 50 or 40, whatever it might be, the difference in terms of in terms of time to get to your destination is is fractional versus, you know, 20 to 30, whatever it might be. That is exponential in terms. Yeah.

And I just want everybody to know that because it's true, okay? It's not political.

Speed awareness course on YouTube preview. The kids supposed to. But no, I mean, physics is not political. It's pure phys. Said of this of the paceometer. He said it's fascinating because it's mathematically trivial, but it's it's counterintuitive.

Totally.

And actually, it was interesting because there were a load of people on the spectator thing going, "That can't be right. In my comments, are you sure that's right, D? That the relationship between speed and time saving is nonlinear? You know, that can't be right." And then a load of mathematicians just pile in and whoop their ass.

But it's true. Going faster doesn't mean you get to where you get. It becomes even worse. That's why High Speed 2 was later bollocks because you needed to make it a bit fast.

Yeah.

But by making it go at 240 mph, it meant it had to go in a straight line. It couldn't stop. Okay. It had to go straight through the Chilterns rather than going along the M. Or wanted it to be a bit slower and follow the route of the M40.

Lovely.

You know, they're they're the they're the smartest tools in the box. Actually, it's either Ora. I think they split them. Anyway, some of those guys who are like, you know, pipe hidden engineer, good guys, right? Okay. They basically said, "Look, you don't need to make it go that fast because it's then got to go in a bloody straight line, and then it's got to go through tunnels, which means your [ __ ] Wi-Fi doesn't work because you're in a tunnel. And also, if you use High Speed 1, when you're in a tunnel, it's [ __ ] noisy."

Oh, yeah. It's terrible.

That's the worst bit of the, once you come out of London, you come out of that tunnel section, and on High Speed 1, it's like, "Ha, peace." You know,

finally.

Yeah. But but like, so and going back to the original conversation because Jordan, we talked about Simon, we talked about creative businesses, we talked about it's such a, it's one of my favorite conversations today. But then just two final questions. The first one being,

what is it about the early days of Sidemen, especially the business end, that other creator groups or creators should aim to copy? And number two, what is it that you would do differently if you had to start from day zero all over again?

Yeah, it's a really good good question. I mean, look, so we came in, I said, 8, 9 years in or whatever, no, seven years in to their journey. They've been doing it a long time. I think if you go back to what made them successful is because it wasn't a commercial venture. It was about the audience. It was about connection. They built audience very authentically. Nowadays, a lot of creators, a lot of people go into the space thinking, "I want to make money." And the problem is with making money is money and value is a reflection of the quality of your audience because you're ultimately, whether it's through YouTube AdSense, whether it's through TikTok Creator Program, whatever it might be, you're being paid by advertisers to reach your audience, way, shape or form. The definition of that audience and the quality of the audience is what will dictate your value and make you money anyway. So, focus on the audience more than anything else. And what does that mean? It means making content that is authentic, that has specificity, if you can. And ultimately, it's content you want to make and create. Problem is is, you know, if commercially and financially, sorry, you know, that content's expensive, you're going to probably run out of steam. So, I think it's setting yourself up for the long term. Don't do it as a hobby, but treat it more as something that you could afford to do forever. Don't overextend yourself financially to the point where you burn out. I think that's the big thing that you see with a lot of creators. They struggle to keep it up. Um, so if I was looking at somebody starting again today, the advice would be go for the long the long haul. Keep it financially sustainable and do it in a way that is totally authentic to what you want to do. Don't try and copy others to try and make money because it will probably be a false economy anyway. One little tip by the way is which is one, you know, one of the sort of sidelines of becoming mildly famous is I can occasionally plug businesses that I really like for no reward.

You know, even small businesses, okay? Businesses where obviously they haven't paid me to say this.

And actually, one way to be authentic is don't just sell things you're paid to sell.

Totally.

Okay. So, you know, give people useful tips, useful life skills.

Be valuable.

Be valuable, 100%. And then they trust people trust you. I I always joke.

Get used to it too.

It's kind of true. Okay. Uh, that they're kind of there three roles for media. Okay. Which I used to call what was it? Court jester, uh, court jester or courtesan. Courtesan is be useful. Okay. Uh, court jester is be entertaining, be funny. And courtesan is be sexy.

Fundamentally, an awful lot of content. And then the courtier thing is genuinely, as you said, just be useful. Yeah.

Just be genuinely useful. And then when when you come along and say, "And by the way, another way of, you know, another useful thing is, uh, you getting a Japanese toilet, which I've been totally unpaid by Toto, by the way, and, uh, the air fryer industry.

Uh, you know, that that was an extraordinary case, I think, where genuinely a whole category benefited from effectively, it was TikTok, wasn't it?

Yeah, totally. Totally. I mean, they're not actually as healthy as we think unless you get a glass one or something.

Oh, no. No, no, no, no, no. Do you mean do you think? Sorry. Okay, you you you're just being misled by Big Oven. Big Oven is the evil part of the economy that's desperate for us to.

I love an air fryer. I just was told that last night. But, uh, uh, this is amazing.

Big Oven misinformation campaign. Who is Big Oven?

Who is Who is Big Oven?

It's a sinister, sinister group of people like in the shadows.

Who are there to discredit the air fryer. The beauty of the air fryer. Yeah. Yeah.

But, uh, Jordan, thank you so much for coming down, by the way. Incredibly useful. Incredibly. So, where can everybody find you? What you got going on right now?

I mean, I would list out my last name, spell out, but it's very long. It's just like Jordan. Okay. S H W A R Z E N B E R G E R. If you're a receptionist, yeah, type in Jordan S. Probably come up. Um, but yeah, I have my newsletter, I think like a creator obviously on LinkedIn, everywhere else. So, yeah, thank you guys for having me. It's been a lot of fun, bro. Thank you, bro. It's a wrap. [Music]