Infinite Content: Doug Shapiro on Media in the Age of Disruption

excited to talk to you. I’ve seen you talk multiple times. Each time I
need sort of new cartridges for my pen, because I take furious notes.
But thank you so much for being on with us.
Doug Shapiro (00:19)
Yeah, no, it’s my pleasure. Thanks for having me. And I’m amazed you
used a pen.
Orlando Wood (00:24)
I do still an old school pen and I’m stuck with it. Yeah, you’re very
tech forward. see you’re your thought leader at all the tech
conferences. You’re the author of the mediator and as well as being,
a, you know, well, like I said, I kind of thought leader and I’ve seen
you speak at so many conferences so well about the state of media.
Doug Shapiro (00:26)
Yeah, I have one those around here someplace too.
Orlando Wood (00:48)
and the major shifts we’re going through and actually really well
articulating how we’re actually going through two different shifts
that are happening at the same time and kind of causing a bit of a
perfect storm. Can you give some background on your position in media
and how you’ve kind of noticed these changes?
Doug Shapiro (01:07)
sure. So I’ve been in and around media for my whole career. So for
more than 30 years, and, I was an analyst on Wall Street for about 15
years. And then I worked at, Time Warner for 12 years. and then, you
know, since then I’ve, I’ve been writing and advising, and the sort of
through line through all of that has, I’ve basically had the same core
job.
regardless of what the title was, which is to recognize the big shifts
as they’re happening, to figure out how those pieces all fit together,
to predict what they mean for the future, then to create some, you
know, to figure out what to do about it. So it’s basically this sort
of, you know,
pattern recognition, synthesis, forecast, call to action. That’s
always what I’ve done. And it’s always what I’ve enjoyed doing. you
know, for instance, as an analyst, I don’t know how much you know
about the job of Wall Street analyst, but there’s a lot of ways you
can be good at it. You know, could be a great stock picker. You could
be great at having industry contacts and connecting investors to
senior executives, what’s called corporate access. You could have
great financial models. What I always really enjoyed the most was just
figuring out the big moving pieces and understanding what they implied
about where the world was going. So yeah, mean, just like what I’ve
always really enjoyed doing. that’s what I’m still doing today.

senior executives, what’s called corporate access. You could have
great financial models. What I always really enjoyed the most was just
figuring out the big moving pieces and understanding what they implied
about where the world was going. So yeah, mean, just like what I’ve
always really enjoyed doing. that’s what I’m still doing today.
Orlando Wood (02:31)
Yeah, the only thing I know about analysts is what I’ve learned from
either margin call or the big short or, you know, things like that.
Doug Shapiro (02:37)
Yeah, yeah, yeah. Those are always completely
accurate. Because whatever you see on TV or Hollywood, it’s 100 % true
to life.
Orlando Wood (02:46)
Well,
I figured and you look remarkably like Ryan Gosling. there’s, I think
that, know, for just to kind of lay the foundation for people who kind
of only have a surface level understanding, I think it’s no news to
anybody who cares about media and creativity that major shifts are
happening with networks, major shifts are happening with traditional
media companies and conglomerates.
Doug Shapiro (02:50)
Yeah, no, I get that a lot, yeah.
Orlando Wood (03:14)
You know, obviously MGM closing down now owned by Amazon, Paramount
now being sort of, you know, expectantly taken over by a sort of a
Google, an Oracle proxy, if you will, in Skydance media. Sorry, that
was maybe showing a bit of my bias there. you know, and, you know, a
lot of talk about, you know, what Apple might do in the space, what
Google might do in space and things like that. I think people are
noticing that shift.
I think a lot of people are blaming it on streaming and Netflix. And I
think that that’s really a surface level understanding of what’s
happening. Can you give a broader but deeper than that understanding
of what really the shift that we’re seeing is?
Doug Shapiro (03:52)
I can try. ⁓ usually the one sentence summary that I give or that I
use is that the last 10 to 15 years in the media business were really
defined by the disruption of content distribution. And I also talk and
I’m sure we’ll get to this, but I think there’s another disruption
coming. But you’re not asking about that. You’re asking about how do
we kind of how do we get to where? Yeah, not yet. How do we get to
where we are today? Yeah, yeah. So if you go back
Orlando Wood (03:54)

Orlando Wood (03:54)
Sure.
Not yet. I’m gonna, definitely gonna.
Doug Shapiro (04:21)
If you go back to like the 80s, you had these two foundational
technological changes or shifts. One was digitization and the other
one was the internet. And prior to that, media was completely siloed,
right? You had a different way of creating and distributing and
consuming the news versus television versus film versus radio. And
then what happened was the, you know,
that the digitization of internet, came in, they unified all of those
media in bits, know, they basically made the atomic unit of all media
the bit, and they unified them all in one network, which is the
internet. And what that did was it fundamentally changed the
architecture of media. the biggest thing it did, the biggest
consequence of that was it caused the cost to distribute media to go
from really expensive
to basically put it on a path to be essentially free, right? And that
really brought down the barriers to entry. so you, to distribute
media, you had, you know, new competitors rush in in every form of
media. And so when I talk about the disruption of content
distribution, that’s what I mean, is that the, you have this
technological shift, barriers to entry come down, new competitors come
in.
and they changed the economics of the media business. And so you could
tie that directly to what I call the five tectonic themes that
dominate the media business today. One is price deflation, that
there’s just pricing pressure because of this new supply, basically.
The stagnation of the revenue pie, which is that media revenue is
ultimately constrained by the amount of time people spend and there’s
only so much time in the day and we’re kind of, I have this stat I
show a lot that US adults are spending 75 % of their waking time with
media today. And so there’s just not a lot of attention. There’s not a
lot of time to go around. The third one is the fragmentation of
attention. Obviously your attention is getting split up in all these
different directions. And part of that is because of someone’s supply,
but another part which maybe we’ll talk about is that the consumer
definition of quality is changing. You people are
embracing some of these new forms of media and they care about more
about things like authenticity and relatability and my power of social
relationship with the creator or whatever. the definition of quality
is changing. The fourth one.

Orlando Wood (06:38)
And think,
quickly on that, I think that that was a similar thing that happened,
you when Sundance in the 90s, when people started making movies on
camcorders and things like that, it was a similar kind of thing.
People were like, wait, there’s a really good story here and a good
storyteller behind it. I almost don’t matter that it’s a little bit
grainy and a little bit shot on VHS and whatever else. I actually, you
know, and those movies started to do well. It’s sort of, that’s always
been in there for good storytellers. ⁓
Doug Shapiro (06:56)
Yeah.
Yeah,
and I think that right now we can talk about it it’s a very
interesting, I think it’s a very interesting topic and it’s one that
if you’re in these businesses and you grew up with a certain
definition of quality, especially one that really revolves around
super high production values and high budgets, it just could be like a
really hard thing to swallow. But it seems very clear and you can see
right now in media what’s growing mostly in television, it’s YouTube.
In gaming, it’s Roblox, which is a little blocky character, right? In
music even, it’s like functional music, ambient music. None of that’s
hyper. The stuff that’s high production value is pretty stagnant.
Where the growth is is stuff that you would consider not high
production value, but it has these other attributes of quality, like
it is more raw, more authentic, more relatable. Anyway, we’ll get back
to that. So the fourth one is this idea of what I call
disintermediation,
Orlando Wood (07:52)
Yeah, so sorry, your fifth, fifth, yeah.
Doug Shapiro (07:57)
the middlemen, the traditional power brokers in media are losing
bargaining power. And we can talk about that. And then the last one is
what I call concentration, that because everything’s on a network, now
everything is networked, networks have very strong positive feedback
loops, which makes strong things stronger. And so you end up with
these network effects, super
you know, super powerful platforms. You end up with like a few hits,
but this very long tail of anonymity. So anyway, I’m giving you a very
long answer to your question. But I think the bottom line is that you
have these, you know, foundational technological changes and you can
draw pretty much a straight line from there.

Orlando Wood (08:31)
No, it’s great.
Doug Shapiro (08:45)
where we are now and so when you think about you know when i think
about like that you know challenges in hollywood and why is production
not snapped back after the strikes and why are you know why is there a
cord cutting and you know why is you know rsn’s failing and why
Is Paramount being sold and why is WBD splitting up and why is NBCU
splitting up and you know, why are there all these questions about why
did Bob Iger come back and you know, why did Scarlett Johansson sue
Disney over the way Black Widow was distributed? All of these things
are basically happening because there’s just less money in the system.
You know that that you can trace that all back to that disruption is
that new entrants come in.
And this is like econ 101, when there’s more supply, when there’s more
competitors, profits go down. And so that’s kind of where we are now
is we’re just an immediate business where a lot of value has shifted
to consumers in the form of more choices at, generally at lower costs.
Um, you think about TV as an example, what people used to pay for
cable compared to what you pay today for streaming. This is sort of
mean that you’re paying the same, you know, cause it, but it’s not.
It’s not true. The truth is that people are
Orlando Wood (10:01)
Yeah.
Doug Shapiro (10:02)
legitimately, they have four services on average. Maybe they’re
spending 40 bucks on average, 50 bucks on average. They’re not
spending 110, 120, what they need to spend. that’s kind of, anyway,
that’s the brief sketch of why are we where we are now.
Orlando Wood (10:21)
Mm-hmm.
Mm-hmm. Yeah, and, you know, I think there was a metric you said at
some point, which was that the actual, all of the growth in the media
sector is being entirely accounted for by the creator economy, not in
traditional media is actually shrinking or staying entirely stagnant.
Is that right?
Doug Shapiro (10:41)
Yeah, not entirely. not entirely. mean, by my math, the creator
economy is about 15 % of all media revenue. even though it’s small,
because it’s growing so fast, it’s represented about half of the
growth of all media pie. So the rest is growing very slowly. The rest
is growing slower than inflation. So you’d say

Yeah, not entirely. not entirely. mean, by my math, the creator
economy is about 15 % of all media revenue. even though it’s small,
because it’s growing so fast, it’s represented about half of the
growth of all media pie. So the rest is growing very slowly. The rest
is growing slower than inflation. So you’d say
it’s actually shrinking on a real basis, on an absolute basis. So it
depends on your, how you want to define growth, either way it’s not,
it’s pretty stagnant.
Orlando Wood (11:12)
And either way, mean, the outlook just isn’t great for traditional
media.
Doug Shapiro (11:17)
Yeah, is that a statement or a question?
Orlando Wood (11:19)
That was a sort of statement generally. ⁓
Doug Shapiro (11:21)
Yeah, so
I’m going to allow you to make statements without commenting on them.
Orlando Wood (11:25)
Okay, all right. Yeah, because I think that, you know, as we’re kind
of, you know, seeing, you know, that, you know, I think that what was
interesting about something that you talked about in one of your talks
was this shift that all of that democratization
of the distribution platform. A, it’s making people expect things to
be cheaper, but B, it’s putting the, it’s changing the nature of the
creatives in the media sector. They used to have creatives and what
they required in order to do their work was they required a media
company or a publishing house or any number of creative companies or
media companies.
to provide them with access to high level production infrastructure so
that their creative ideas could then be distributed by that media
company. And now what we’re seeing is creators who have as many of the
tools now as they possibly can. I always think that when I was in film
school, the notion of getting your hands on a lighting kit was, that
was an exciting prospect. That if you had a weekend,
Doug Shapiro (12:30)
Yeah.
Orlando Wood (12:32)
If the lighting kit wasn’t booked and you could get your hands on it
in film school, that was a big weekend. That was an exciting weekend.
Now there are lighting kits all around America in people’s homes and
living rooms. ⁓ And so it goes all the way from the distribution
channels to just the physical ability to make things. so that was a
really interesting perspective for me that…

If the lighting kit wasn’t booked and you could get your hands on it
in film school, that was a big weekend. That was an exciting weekend.
Now there are lighting kits all around America in people’s homes and
living rooms. ⁓ And so it goes all the way from the distribution
channels to just the physical ability to make things. so that was a
really interesting perspective for me that…
Doug Shapiro (12:37)
Yep. Yeah.
Yeah. Yeah.
Orlando Wood (12:56)
the shift between creatives to creators and that we’re seeing a real
emboldening of the creator ecosystem.
Doug Shapiro (13:04)
Yeah. And I went through that list of those tectonic trends really
quickly, but one of them is disintermediation, which is what I mean. I
mean what you’re describing by that in the sense that technology has
democratized really every step of the product development process to
certain degree. where my whole like
Orlando Wood (13:14)
Mm-hmm. Mm-hmm.
Doug Shapiro (13:27)
you can trace this back to the disruption of distribution theory gets
a little bit blurry is distribution was the big one. Like the fall of
the distribution mode was the big one because the costs really went to
zero. mean, you you’re going to distribute this podcast for what’s
essentially free. I put out a first act for free, you know, today I
didn’t have to have a printing press and trucks and delivery people,
right? ⁓ But the other parts have also
Orlando Wood (13:50)
Mm-hmm. Yeah.
Doug Shapiro (13:55)
been democratized to a certain degree like production depending on
what medium you’re talking about production is cheaper you you you
have cheaper in-home hardware was just you know better chips and you
know more global competition all that you in-home editing software
like you said you you have billie eilish and her brother can create a
multi-platinum album in their house right is what they did
Marketing is now being democratized to some degree by social
monetization is being democratized by these kind of self-service
distribution platforms, whether it’s Spotify or substack or YouTube or
whatever. So yeah, every every step to varying degrees has been Has
been democratized by technology and so that has given rise to this
this creator class and you’re drawing the distinction between a
creative
that works with the middleman and the creator that has a direct
consumer relationship, which I think that’s a good way of thinking
about is that distinction between creative and creator. But it’s not
only has it created the rise of the whole creator economy that $250
billion a year and growing rapidly, but even for creatives, it’s
changing in a more subtle way or a subtler way.

that works with the middleman and the creator that has a direct
consumer relationship, which I think that’s a good way of thinking
about is that distinction between creative and creator. But it’s not
only has it created the rise of the whole creator economy that $250
billion a year and growing rapidly, but even for creatives, it’s
changing in a more subtle way or a subtler way.
It’s changing their relationships, their relationship with the
middleman. It’s giving them more bar power over the middleman because
they can circumvent them. know, and you see things, you know, when you
see Taylor Swift say, I’m going to film the heiress tour movie and
then distribute it without a studio, right? Or you see what’s
happening in music, which is every new artist, you know, almost all
new artists these days emerge
Orlando Wood (15:14)
Mm-hmm. Mm-hmm.
Mm-hmm.
Mm-hmm.
Doug Shapiro (15:36)
from the tail of self-distribution on Bandcamp, SoundCloud, or TikTok,
or YouTube, or whatever. And the first thing they do when they have a
couple of hits is they go cut a major label deal, right? They want
validation, they want the infrastructure, but they’re walking in the
door with more bargaining power than they had a decade ago, right? And
they’re asking things like, I want a rights reversion, I want rights
to my master’s back in…
Orlando Wood (15:39)
Mm-hmm.
Doug Shapiro (16:02)
in, you know, I’m, I am effectively renting you, you know, I’m
licensing your rights to my music. I’m not giving, I’m not, I’m not
giving them to you. I’m not selling them to you. ⁓ So, so yeah, that,
that, that disintermediation, that sort of weakening of the middle is
also, it, it, it is definitely happening and happening in very
obvious, explicit ways. When you look at the rise of creators that
Orlando Wood (16:10)
Mm-hmm. Mm-hmm.
Hmm.
Doug Shapiro (16:28)
have done away with the middlemen altogether. And in these subtler
ways, as you see bargaining power shifting to the creatives that are
at the very tippy top of the head of the curve.

have done away with the middlemen altogether. And in these subtler
ways, as you see bargaining power shifting to the creatives that are
at the very tippy top of the head of the curve.
Orlando Wood (16:39)
Mm-hmm. Yeah, it’s interesting because there’s usually been this path
that a creator travels up and does really well. And then they sort of
tend to go into traditional media. mean, Joe Rogan, for example, has
his podcast and then he goes into and does a huge deal with Spotify or
Howard Stern with Sirius FM, XM.
But now we’re kind of seeing that stop a little bit. Like Stephen
Bartlett just recently was offered a hundred million by multiple, you
know, podcast companies for, or, or streaming companies for Dire the
CEO. And he just said a flat out, no, you know, he was like, I don’t
think there’s much worth in me doing a deal with you. I can grow
better on my own, have more freedom. And my hundred million isn’t all
just a cash check of a hundred million. It’s tied to certain.
Doug Shapiro (17:18)
Mm.
Orlando Wood (17:30)
you know, you know, targets I have to hit, but targets I have to hit
on a media platform I don’t own. So if I can keep control of my media
and my distribution channel, I know what my growth looks like. And I
know that I can kind of get there on my own. And even somebody like
Mr. Beast as well. I mean, he’s, he’s doing beast games with a
traditional distributor, but he’s taking his money and going. mean,
they’re not gaining a piece of anything else that he’s creating.
Doug Shapiro (17:54)
Yeah, and that’s, mean, I guess the only place I push back is I don’t
really think of Spotify as traditional media, you know, but yeah, I
think the relationship with the, I don’t want to say anything that’s,
I don’t want to denigrate anyone, but I think the music labels are an
interesting model for this because they’re,
you know, their relationship, their value proposition to artists
changed a lot over the course of a decade. It used to be that they
needed a label to do the, you know, to finance the production and to
do the distribution. Like if you wanted to be in tower records, right?
If you wanted radio play, if you wanted any of that stuff, like you
had to be with a label. Like there just wasn’t viable.
to be an independent musician and have any kind of real presence. But
they completely pivoted. They changed what their value proposition was
to the artist. They are basically brand management machines and they
have access to global data. And so they bring analytics chops and say,
you’re blowing up in Hokkaido. It’s time to do a
Japan tour, know, whatever it is, like, but they’ve really changed
what their value proposition is. And in a lot of ways that, you know,
I think might be what the future of those companies, all the, of these
traditional middlemen is, is like, they’re all going to have to
reassert what is their value proposition to the artist, in which case
it’s not about owning anymore. It’s about, you know, it’s basically
effectively an agency relationship.

Japan tour, know, whatever it is, like, but they’ve really changed
what their value proposition is. And in a lot of ways that, you know,
I think might be what the future of those companies, all the, of these
traditional middlemen is, is like, they’re all going to have to
reassert what is their value proposition to the artist, in which case
it’s not about owning anymore. It’s about, you know, it’s basically
effectively an agency relationship.
Maybe there’s some equity ownership of it, but they’re really a
service provider to the creative, not an old, you know, it used to be,
they extended all the capital, took all the risk, owned all the
upside, owned the IP. And, and there’s a future over some period of
time where that’s not what the media, you know, the traditional media
business is going to be anymore. It’s going to be, we are a service
provider to the creator, creative, whatever you want to call them.
Orlando Wood (19:31)
Yeah.
Right.
Mm-hmm.
Doug Shapiro (19:55)
They’re going to do stuff with us and they’re going to do stuff off
platform. And we’re going to just try to provide as much value as we
can so we can ride along with that. Yeah, so it’s definitely like
there’s definitely a it’s one of these things where there’s that
there’s that power. David Foster Wallace gave this commencement speech
at Kenyon College. I don’t know if you ever read this. It’s worth
reading.
Orlando Wood (20:21)
Yeah,
I have. Yeah.
Doug Shapiro (20:22)
Although
it’s hard, it’s a little harder to in hindsight, you know, um, cause
it reads differently, but the beginning of, of it tells us, you know,
story about these two young fish who are swimming along and they
encounter the big fish and the big fish is like, Hey guys, how’s the
water today? And they keep swimming. And then one of the little fish
turns to the fish. goes water. What’s water? You know, and, and, uh, I
think you can be so in the thick of this stuff that you don’t really
see.
Orlando Wood (20:29)
Yeah.

Doug Shapiro (20:51)
It’s hard to see what’s going on around you, but this is what’s
happening. There’s this like fundamental shift of what is the role of
the middle man in the value chain.
Orlando Wood (21:01)
Yeah. It’s funny because that’s also, know, it occurs to me that, so
much of sort of sass and technology tools are service based already.
So it’s sort of, you know, it sort of dovetails a little bit that that
thought into, you know, what your your your one of your pillars about
concentration and that actually the biggest media companies are not
media companies. They’re they’re big.
technological and technical companies or tech companies, Google, Meta,
Amazon, Apple, you know, these are the ones sort of, you know, now
cannibalizing kind of the entire media space and they’re acting as a
service. So it sort of makes sense that this, that the media
infrastructure shift is also moving towards a service shift rather
than an IP ownership and production shift.
Doug Shapiro (21:50)
Yeah, no, I think that’s a very insightful way of thinking about it is
that they’re effectively, yeah, you’re right. They deal on mass scale.
They don’t have the resources. It’s not practical to be white glove,
high touch service. Like they just provide an open platform. Here it
is, here’s tools. And we’re agnostic to who succeeds and who fails.
And we’re not gonna own the equity.
You know, sometimes they give a nice split like YouTube does and as
they give basically no split split like you know META does but yeah, I
think that that’s a Like I said pretty incisive way is that they’re
they’re kind of setting the terms of this new media landscape and they
are service providers
Orlando Wood (22:32)
Yeah, and YouTube, mean, giving a split is working out very well for
them. think one of the statistics you mentioned previously, or when
I’ve seen you speak, is that new YouTube hours are outstripping
Hollywood by 20,000 times annual.
Doug Shapiro (22:48)
Yeah, yeah, that’s right. And it’s, they actually haven’t updated this
number in a long time. But they used to say that, I think it was maybe
2019, it was at the YouTube new front presentation or something. They
said that there’s 500 hours of video uploaded every minute. So it ends
up being about, you you get it and I got to think it’s higher since
then, but it’s around 300 million hours a year. And by my math,
there’s a

Hollywood puts out about 15,000 hours a year, at least in the US, of
TV and film. So that is 20,000 times as much.
Orlando Wood (23:24)
Yeah. Well, I mean, listen, it definitely, you know, working for them.
I think that, you know, one of the things that I found very
interesting was you, you would, you, you broke down very well the
media disruption kind of playbook and you kind of, you subsegmented it
to be like, okay, like, you know, there’s, there’s deep library,
there’s kids.
things, there’s reality TV shows, all of you sort of graded each type
of media and related it to its ability or how difficult it was to
make. And that YouTube seems to really be servicing that and Netflix
obviously did it very well, but Netflix started with deep library of
lots of different media companies.
existing IP, but then kind of grew in their confidence level up the
sort of disruption chain. Could you talk to a little bit about that?
Doug Shapiro (24:17)
Yeah, so what you’re referring to is my efforts to overlay the
disruption of TV onto Clay Christensen’s theory of disruptive
innovation, which is not media specific. It plays out all over the
place. You think about Airbnb as an example. so the idea is that
The disruptor comes in, you know, have an incumbent industry, a lot of
times they’re over-serving their customers. There’s some subset of
their customers who you’re just charging too much, you’re giving them
more than they need. And so the upstart comes in. Usually there’s some
technology that catalyzes, that enables the new upstart to come in.
They come into the market with something that’s cheap and crappy, and
the incumbent’s like, ha, ha, ha.
That’s nothing they completely ignore it and smoke some cigars and
take a car service or have a whiskey or whatever they do. Right. ⁓ But
that product appeals to some subset of the market. The subset that was
over served. They’re like, great. I want the it’s it’s good and quote
unquote good enough for me. And it gets a foothold. And then the
insurgent, you know, so they’re
Orlando Wood (25:10)
All right. Yes.
Doug Shapiro (25:28)
first targeting the least demanding customers and then they move up to
the next least demanding customers and they keep moving up the curve,
which is what you’re referring to. And so in the case of Netflix, when
they came out, like the least demanding customers, like deep, know,
there was a cheap product, right? People were paying whatever 80 at
that time, 80 to 90 bucks a month for cable. This thing was 799. And
then like, we’re going to, well, actually at the beginning was free,
right? They used to give away the streaming service free to any of

first targeting the least demanding customers and then they move up to
the next least demanding customers and they keep moving up the curve,
which is what you’re referring to. And so in the case of Netflix, when
they came out, like the least demanding customers, like deep, know,
there was a cheap product, right? People were paying whatever 80 at
that time, 80 to 90 bucks a month for cable. This thing was 799. And
then like, we’re going to, well, actually at the beginning was free,
right? They used to give away the streaming service free to any of
to subscribers who got their DVD by mail service. And like, we’re just
going to give you a bunch of like old movies and old TV shows. And
then eventually they, you know, started to do some kids and they
started to, know, high wall, they got the higher quality, you know,
syndicated stuff, right? Like they did the big stars deal and all of a
sudden they had Disney and Sony movies in the pay one window. So you
had Reddit doing that bad boys and
whatever it was, right? And then they kept moving up, moving, you then
they got kids and they started doing originals and then theatrical,
know, higher quality originals and then theatricals. And now they’re
at the very top of the curve. So, you know, you could do that with
Airbnb, right? Like when it first came out, it was, paid to sleep on
someone’s couch and then, you know, the quality of their inventory
just kept getting better and better and better. Now you can rent a
multimillion dollar villa and you know, there’s this thing, Airbnb Lux
where you can get
concierge services and private chefs and whatever you want. this is a
recurring thing is you think about digital photography when it first
came out, it was very low fidelity, grainy, whatever it was,
pixelated. Again, same kind of idea is it just starts low and gets
better and better and better. So yeah, that’s what Netflix has clearly
done. That process is…
run its course in the case of, and they really just, if you think
about it this way, they disrupted the TV business from the inside in
the sense that they’re making the same kind of content with the same
talent, but for the same money or more money, right? But now YouTube
is really disrupting TV from the outside because they’re doing it in a
different way and they’ve picked off kids. Kids business really gotten
crushed by YouTube. The traditional kids business has gotten crushed
by YouTube.
Orlando Wood (27:27)
Mm-hmm.
Mm-hmm.
Mm-hmm.
Doug Shapiro (27:47)
a lot
of the most popular kids shows in the world are on, know, Cocomelon or
whatever is on YouTube. Maybe it’s distribution on Netflix also, but
you know, it’s primarily YouTube. And you know, then if you say, okay,
who’s next least demanding? You say, well, Unscripted, you know, it’s
those viewers and you’d say, well, the most popular Unscripted show in
the world is Mr. Beast, you know? I mean, Dude Perfect is Unscripted
and you get like cooking shows. And so, and now you’re starting to see
some kind of like,

of the most popular kids shows in the world are on, know, Cocomelon or
whatever is on YouTube. Maybe it’s distribution on Netflix also, but
you know, it’s primarily YouTube. And you know, then if you say, okay,
who’s next least demanding? You say, well, Unscripted, you know, it’s
those viewers and you’d say, well, the most popular Unscripted show in
the world is Mr. Beast, you know? I mean, Dude Perfect is Unscripted
and you get like cooking shows. And so, and now you’re starting to see
some kind of like,
Orlando Wood (27:51)
Mm-hmm.
Doug Shapiro (28:14)
sketch comedy, not a lot of long form narrative stuff yet, but you’re
starting to see some of that. And so it’s moving up the curve. And
again, we haven’t talked about chain AI yet, but my thing is that
those tools, VEO’s, the Sora’s and LUMA’s and all of those things,
stable diffusion, the open source ones, are going to throw kind
Orlando Wood (28:19)
Mm-hmm. Mm-hmm.
Yeah.
Doug Shapiro (28:38)
gas on that fire, that they’re going to further close the production
value gap between what is possible by a creator and what’s possible
from a corporate media or quote unquote professionally produced media.
And that’s going to what enables creator content to continue moving up
that performance curve.
Orlando Wood (28:45)
Mm.
And I think, because that’s, it was exactly where I was going to head
next is that, you know, creator content had stagnated up that curve
and it was, there was no real sense that they were going to push past,
you know, the, limitations in reality or unscripted programming. And
that the only ones who would would be the Mr. Beast or the Paul
brothers or people who had reached a level of, of success that they
could invest in significant media, but there was no.
real threat that they would get into scripted or long form narrative
storytelling. I mean, it just didn’t occurred anywhere. Exactly.
Doug Shapiro (29:30)
Right, or a theatrical movie, know, a, a flower,
you know, exactly, action adventure, you know, no.
Orlando Wood (29:36)
Precisely, and now, you know, with GenAI, suddenly it becomes the
possibility of anyone in their dorm room, in their living room at
home, to be able to experiment with storytelling. And all we really
know about storytelling or script writing or any of those things is
the more you do it, the better you get at it. And these creators are
incredibly committed. And these tools, you know, put out by these tech
companies are incredibly cheap.

Precisely, and now, you know, with GenAI, suddenly it becomes the
possibility of anyone in their dorm room, in their living room at
home, to be able to experiment with storytelling. And all we really
know about storytelling or script writing or any of those things is
the more you do it, the better you get at it. And these creators are
incredibly committed. And these tools, you know, put out by these tech
companies are incredibly cheap.
And so now you’re gonna have, and sure, once again, I’m sure they’ll
put out stuff and everybody go, well, it’s pretty crappy and the story
doesn’t work and this isn’t quite great, but give it five years and
that creator will have experienced producing five films in the time
that a traditional director might’ve only produced one or two.
Doug Shapiro (30:10)
Yeah. Yeah.
Yeah, and also there’s just the law of large numbers, just the sheer
volume of these people because there’s this whatever, don’t even know
what you’d call it, there’s people talk about if an infinite number of
monkeys had an infinite number of typewriters that they would
eventually, one of them would write the great American novel, right? ⁓
It’s sort of the same thing here is that when you think about this
disruption that was
Orlando Wood (30:26)
Mm-hmm.
Mm-hmm.
Doug Shapiro (30:47)
of TV that was largely driven by Netflix. Netflix was one company with
a lot of money. then, know, you’d say Amazon came in and maybe Hulu.
You know, so maybe there were three companies that were driving the
disruption. Now you’re talking there’s 130 million channels on
YouTube, right? There may be tens of millions of people and people
who, I mean, if you think about Hollywood and how many people actually
have green light authority in town, I mean, I don’t know what it is.
it?
Orlando Wood (31:03)
Mm-hmm. Yeah.
Doug Shapiro (31:15)
dozen? it eight? it, you know, there’s, there’s only, there’s only a
few people who, you know, when you think about it, who really control
the allocation of capital. and now you’re going to have, you know, who
knows how many millions of people of, of, you know, would be creators
out there. very, very few, a very, very tiny percentage of those need
to succeed to completely change the
supply demand dynamic.

supply demand dynamic.
Orlando Wood (31:42)
It’s, yeah, the infinite monkeys and infinite typewriters is an
interesting one. because also it calls to mind, you know, the way AI
works, doing lots of different tasks all at the same time to come up
with one answer. But also you’re writing a book now called Infinite
Content. And the parallels there are quite interesting to me, because
you’re right. It’s also going to cause, you know,
Right now there’s this idea of getting on the Greyhound bus and going
to LA with a dream, you know, and that that’s where that is required
to happen. But it’s only gonna take somebody in a dorm room in SMU to
do something really great that goes viral online, that someone in
Hollywood goes, hey, you should come out here and have a chat about
this new franchise we’re doing or some TV show we’re making. And
everyone else in the dorm rooms will go nuts and start trying it.
Doug Shapiro (32:29)
Yeah. Or, or, or, yeah. But like,
Bangalore or Ghana or, you know, I mean, think about like, you know,
someplace in Indonesia, like, you know, there’s, uh, um, there’s all
these markets that, you know, they completely import markets for
content that were, who knows what you could, there’s this concept of
the lost Einstein.
Orlando Wood (32:36)
Yeah, yeah.
Mmm.
Doug Shapiro (32:53)
how many geniuses lived and died and never had access to the resources
to discover the theory of relativity or whatever it was they might’ve
done that are now theoretically gonna have access to these tools. So
yeah, like completely. And it’s also interesting to contrast that
against the, what I would say,
Orlando Wood (33:02)
Yeah. Yeah.
Doug Shapiro (33:15)
rising degree of risk aversion in Hollywood because as things are
getting tougher Development executives are even more inclined to to go
with the safe bet and So you’re you know, you end up with more
sameness Whereas, you know in this this nearly infinite sea of
creators, you’re gonna see all kinds of like super super interesting
stuff

Because why not, you know, different formats, different kinds of
stories. And then get to another thing, which I don’t know if you were
heading down this path at some point too. And so I will float it and
then we can reel it back. you know, the idea that, um, generative AI
is not only, uh, going to be a cheaper way to make movies and TV
shows, but it’s also, it also has unique attributes that’s going to
enable unique kinds of content. And, um, so I’ll pause there to see if
I don’t want to jump ahead of your
Orlando Wood (33:48)
Go for it.
Doug Shapiro (34:07)
agenda.
Orlando Wood (34:07)
No, that’s fantastic.
I mean, yeah, no, let’s get into that. Because you had a great word.
It was a long one that started with an S. I’ve read it multiple times.
I still can’t remember to pronounce it. ⁓ Could you?
Doug Shapiro (34:15)
Yeah, yeah, yeah.
Yeah, yeah, yeah. So it’s
it the word is skeuomorphic and it’s something that this VC at a 16 Z
got him Chris Dixon talks about a lot is skeuomorphism because I think
it’s originally a design terms like when you look at your maybe let’s
hope you remember maybe won’t but when you look at your phone and the
the the clock icon is an analog clock right that’s called skeuomorphic
design obviously
analog about that app that’s telling you the time, right? There’s no
gears, there’s nothing in there, like there’s no hands. So applied to
media, what it means is that the first applications of a new medium
tend to be an imitation of the prior medium. And so when you think
about film, the first films were just recorded stage plays, right? And
then
over time or know, think about magazines and the first magazines you
read online were like static PDFs and you like press the button and
the page flipped or whatever. And then what happens is eventually the
creatives will figure out what are the unique attributes of this
medium. You know, we see you think about film, there’s vocabulary of
film and different kinds of shots, special effects and all that stuff.
Or in magazines now you have infinite scroll and hypertext links and
embedded video and
Orlando Wood (35:26)

Orlando Wood (35:26)
Mm-hmm.
Mm-hmm.
Doug Shapiro (35:36)
You know all kinds of other things, know, have logs and know,
microblogging and all kinds of different formats and stuff. So it
raises the question, what is the, what are the new applications that
are going to be possible in generative AI? And we don’t really know. I
mean, it’s going to happen in weird ways. You know, like I always say
that the fact that ASMR is a thing, you know, that there’s a,
and YouTuber with 35 million subscribers who like does mukbang or
whatever, know, eats food or eats cookies. you know, I’m like, I like
that’s a thing. Why is that a thing? Yes. And I think some unexp… We
have to be prepared, you know, I’m sure we are, but for it to happen
in unexpected ways. But you think about things like, okay, it’s super,
super cheap.
Orlando Wood (36:06)
Mm-hmm. Yeah.
Mm-hmm.
Doug Shapiro (36:23)
Right. So we talked about cheap, cheap, but cheap doesn’t only mean
like make a movie cheaper. It could mean that we’re doing things like,
you know, AB testing of creative, right? Like you’re putting out
versions because it’s cheap or, know, you think about fan creation
that that creation will be democratized for people are going to want
to interact with their favorite IP by remixing it and doing their
like, you know, their fanfic and whatever it is. You know, we could
look out. I saw the stat.
Orlando Wood (36:32)
Mm-hmm.
Mm-hmm.
Doug Shapiro (36:51)
which I’ll probably mangle, but I think it’s something like Kodak said
in the year 2000, there were 80 billion photos taken and then last
year there were two trillion photos taken and it’s because everyone
has a camera, right? So, you you could have a world in five years
where the encroaching competition on time spent with media is, or time
spent consuming media,
Orlando Wood (37:03)
Right.

Doug Shapiro (37:17)
is time spent creating media. You could have people spending hours
making stuff, Sort of like the Minecraftification of linear. Yeah,
well, we’re gonna sit around, I’m gonna make stuff and I’m gonna
really enjoy the making and watching and then when it’s cool, then
I’ll share it with my friends and maybe it blows up and maybe a lot of
people watch it on YouTube when I post it.
Orlando Wood (37:19)
Mm.
Yeah.
And, and Roblox to your, your point earlier, you know, that’s, yeah.
Yeah. Yeah.
Doug Shapiro (37:41)
You end up with this one media property that ends up serving anything
along continuum from a personalized experience to a niche experience
to a sub mass to maybe, you know, it becomes part of the cannon and
part of the Minecraft, you know, the Minecraft movie, right? Or who
knows what. So you could have this whole range of experiences all
birthed out of one IP, like this an interesting idea.
Orlando Wood (38:04)
Mm-hmm. Yeah.
Doug Shapiro (38:06)
Other things you you could think about like okay it’s rendered real
time right what does that mean if the if it’s not locked and just you
know the today you make TV shows locked and you distribute it like
what does it mean if it can actually be rendered in real time so you
could have interactive stories or personalized stories or emergent
stories you you have this company fable the simulation I don’t know if
you’re familiar with them Edward Sotky but his thesis is that
humans will create story worlds where the human will kind of define
the mythology and the character development and all that. But then the
stories actually emerge out of a simulation. Like you let these
characters live a simulated life and then the way you create content
is by subjecting them to certain circumstances. I think that’s kind of
the idea. But that idea of like an emergent story, right? Like you
think about like, you know,
Orlando Wood (38:49)
Yeah.
Mm-hmm.

Doug Shapiro (38:58)
a song of fire and ice. You you think about George R. R. Martin
creating this incredibly rich mythology. And what if the stories could
emerge out of that without human direction, right? know, crazy stuff.
What does it mean that like all video is inherently three-dimensional
and that everybody is the cinematographer? You can watch anything from
any angle you want. So anyway, I’m just saying like there’s, my guess
is that
Orlando Wood (39:07)
Mm-hmm.
Yeah.
Doug Shapiro (39:24)
the killer app for generative AI video may not even be just a cheaper,
a million dollar movie that looks like a hundred million dollar movie.
may be an entirely new form. yeah, it’s just gonna be another
competitor for time and attention.
Orlando Wood (39:28)
Hmm.
Right, I think that that’s what’s so great about the title of your
book. It evokes in the mind exactly what you just described. This
notion of, you know, owning your own storytelling world and allowing
people to come in to experience it. It’s driven by AI, all of the
media and the production of it is driven by AI. And you are just kind
of the, you know, the plate spinner topping up the plates and going,
well, I don’t like the way this character’s.
development is going or, you think Sansa should, Stark should go over
and do that actually now. ⁓ know, and I, yeah, exactly. If you’re
particularly awful to her. ⁓ But I think that like, that’s, you know,
it’s just, I guess a pat on your back for such a great title of that
book, but I think it does. think it evokes that potential future.
Doug Shapiro (40:11)
Yeah, yeah, yeah, yeah, yeah. She should end up with a finger.
Yeah, yeah, yeah, yeah.
Orlando Wood (40:32)
where that’s what we’re all doing. you’re right, there’s a joy in that
creation that might kind of take up, you know, be the entertainment
itself. That’s a really interesting point.
Doug Shapiro (40:41)
Yeah, yeah,
yeah. that’s not to go too far with this, I I think when you think
about like Maslow’s hierarchy of needs, right? This idea of like, need
the bases, you need shelter and food and security or whatever. And

then like, there’s this tippy top of the pyramid of self-
actualization. But you see people creating content and you know,

yeah. that’s not to go too far with this, I I think when you think
about like Maslow’s hierarchy of needs, right? This idea of like, need
the bases, you need shelter and food and security or whatever. And

then like, there’s this tippy top of the pyramid of self-
actualization. But you see people creating content and you know,

prisons and concentration camps and war and all that. You could argue
that the creation is actually much closer to the bottom of, it’s
actually not a self-actualization thing that you do when you retire
and you’re like, I’m gonna paint. It’s actually this very fundamental
human need. And so yeah, that argues for as, I think pretty much every
time tools have made creation more accessible, the volume of
creation goes up a lot.
Orlando Wood (41:27)
Yeah. what? Sure.
Doug Shapiro (41:29)
You know, I got no one that just to think about this.
like, you know, TikTok is a well, I’m just saying on this point, um,
TikTok YouTube is a consumption app, right? It’s, geared around
consumption. TikTok is a creation app, uh, you know, with filters and,
know, the camera embedded in the app and all that sort of stuff. think
something like 80 TikTok is 83 % of people use TikTok have uploaded a
video and for YouTube there’s, you know, 113 million channels, but
there’s like.
Orlando Wood (41:39)
Mm. Yeah.
Doug Shapiro (41:55)
I don’t know, whatever it 2.5 billion MAUs. It’s sort of like, it’s
like, single digit percentages. And so that difference is because, you
know, one is geared around creation and one is not. And when you
geared around creation, people create. So yeah, I think it’s a bigger
deal. It’s fun to think about some of these, you know, much broader
implications of what we’re talking about. And just this idea like, oh,
here’s a way to make that
you know, Spider-Man for 50 million instead of a hundred million, or
whatever, like it’s a very linear way of thinking. And like those
linear things are going to have to happen first before some of this
other, these other things come to pass. But, um, you know, if you went
back to the release of the iPhone in 2007 and said, okay, so here’s
this thing. He says, Oh, cool. They have an iPod that you can make
calls on. And you’re like, well, yeah, except because of that iPod,
you can make calls on.

Orlando Wood (42:29)
Mm-hmm.
Mm-hmm.
Doug Shapiro (42:50)
within a decade, you will be choosing sexual partners on that thing.
You will press a button and then get into a stranger’s car to go meet
them. And then you’re gonna get to a restaurant and you’re gonna take
pictures of your food and distribute it to everyone you know and don’t
know in the world. What are you talking about?
Orlando Wood (43:15)
Yeah.
Doug Shapiro (43:16)
Meaning just this stuff, takes a long time to play out, but it’s going
to have, I think, some really profound impacts on us.
Orlando Wood (43:24)
Yeah. I mean, is there a way do you think for legacy media? I mean, do
you see a silver bullet or a silver bullet strategy? Is there a way
for legacy media to compete or fight back?
Doug Shapiro (43:36)
you know, it gets to something I’m writing and I haven’t published
yet, where I think the, you know, I think one thing is really
embracing this idea of, of, being a service provider of, of, you know,
reasserting the, the role they have in the value chain, you know,
bringing their professional skills, get skill sets to bear. but
another thing which, which,
I’m reluctant to kind of spool out, but I could try, guess. Is this
something I said at a conference a couple of weeks ago, this idea that
in an anti-world, trust is the new oil. And what I mean by that is
that in the attention economy, data was considered the new oil. You’re
basically trying to monetize people’s attention. Data is helpful.
because you can now know more about those people and what they’re
doing. But the attention economy is really taking on water, right?
Like it’s having all kinds of negative societal impacts, you know,
whether it’s disinformation and, you know, all this political
polarization and social networks that try to keep us hooked on these
like dopamine loops and, you know,
kids, you know, whatever the whole like the anxious generation that
Jonathan Haidt thing about, you know, the negative implications of
phones and all that stuff, you know, it’s like it’s clearly not good
that that, you know, the world that has wrought is not good. I think
AI is going to devalue attention.

There’s gonna be so much noise in the system that the value of
attention is gonna diminish. And also I think a lot of consumers are
gonna turn to the use of agents for some things. And as soon as you
put a mediator between you and the content, like the value of that ad
goes to zero, right? The bot is not gonna be like, whoa, that looks
cool. So if you’re shifting from this…
Orlando Wood (45:19)
Mm-hmm.
Doug Shapiro (45:23)
You know, the attention economy, the whole foundation of the web,
which is advertising, starts to take on water. What emerges in the
wake of that is an intention economy. Like that you’re only going to
make money by persuading people to do stuff, to take actual action.
And the only way they’re going to do that is if they trust the source.
And that’s why I say trust the oil in an AI world. You need to trust
who you’re getting stuff from, who’s curating things for you.
Orlando Wood (45:45)
Mm-hmm.
Doug Shapiro (45:51)
And that’s a very different world, right? Like a world where you’re
trying to maximize attention. We know what that looks like. A world
where everyone’s trying to maximize trust is a very different thing.
Like how do you earn trust consistently? And so I think that in that
world, the traditional media companies that have trusted brands and
well-known brands, they actually do have an advantage in extending
that trust, extending those. So I think that that’s…
Orlando Wood (45:53)
Mm-hmm.
Hmm.
Mm-hmm.
Doug Shapiro (46:18)
Another kind of silver lining for traditional media is how we really
lean into the trusted relationships that we have with consumers. And
could you see sort of a swing back to some degree from the creator
economy and these, again, this world where it’s all about being as
noisy as you can, and we’re going to move to world where it’s,
Orlando Wood (46:41)
Mm-hmm.
Doug Shapiro (46:43)

more important to be trusted.
Orlando Wood (46:44)
Right. Well, that’s… ⁓
Doug Shapiro (46:45)
So it’s a bit of an inventory.
It’s a of a vague, you I can’t, you can’t put like a, you can’t put
that in a spreadsheet and it’s worth X, but like, think directionally
that is an opportunity for the traditional media companies.
Orlando Wood (46:50)
Kim. Right.
Right, well that’s amazing. Can I just ask you one question? It’s a
question we’ve been asking everybody, which is I had a boss once
called Dan Wyden who, giant in the ad world, you wrote Just Do It, and
he had a quote where he said, you’re useless to me until you fail big
at least twice. And that was always a great emboldening thing, because
if you failed, you’d be like, okay, well that’s one of my two, and
your boss couldn’t yell at you that aggressively if you were learning.
Doug Shapiro (47:12)
Mm-hmm.
Orlando Wood (47:21)
Can you remember and would you be willing to admit a time where you
failed and what you learned from it, whether big or small?
Doug Shapiro (47:27)
Um, no, I mean, I sure I’ve failed plenty of times. Um, you know,
think the, uh, I guess I should have been ready for this question,
but, um, you know, one, one area, you know, so when I, when I first
started writing, uh, a couple of years ago, I probably got a little
bit too enthusiastic about crypto. Um, and, and not the, you know, not
the money part of it, but the tech part of it, the utility part of it.
And this idea of the
Orlando Wood (47:37)
Ha ha.
Mm-hmm.
Mm-hmm.
Doug Shapiro (47:55)
of a decentralized web. And so I probably lead into that too much. ⁓
When I was an analyst, I had plenty of bad stock calls. Probably the
most painful one, the biggest failure was I was bullish on a cable
company called Adelphia. ⁓ And it turned out that they were defrauding
investors. They had

of a decentralized web. And so I probably lead into that too much. ⁓
When I was an analyst, I had plenty of bad stock calls. Probably the
most painful one, the biggest failure was I was bullish on a cable
company called Adelphia. ⁓ And it turned out that they were defrauding
investors. They had
Orlando Wood (48:00)
Mm.
Right.
Doug Shapiro (48:19)
They had two sets of books. had like a real set. And then they had the
set of books that they use for their financial reporting purposes and
company.
Orlando Wood (48:25)
Hmm.
So you were right based
on what was the available information.
Doug Shapiro (48:33)
exactly. Yeah, yeah, yeah, yeah. I
mean, yes, I think I might have been, you know, the assets ended up
having value after the bankruptcy process. Anyway, it was really it
was really, you know, I was that it was not my job because I was only
being, you know, spoonfed the the public’s publicly known information
wasn’t I wasn’t like a forensic accountant was going in to make sure
that they were telling the truth. But that was still a pretty painful
thing because, you there were a lot of people who didn’t hold the
the family that owned the company in high regard. I didn’t heed that.
So anyway, that was like court depositions and ⁓ that wasn’t super
fun.
Orlando Wood (49:09)
Okay.
dear.
What was the main thing you learned from that, you think?
Doug Shapiro (49:17)
you know, I think the main thing I learned is you have to trust your
judgment about, about people’s character. you know, it’s easier to say
in hindsight than it was in foresight, but that would, that would be
the main thing.
Orlando Wood (49:30)
Right. Well, Doug, thank you so much for spending so much time with us
and for talking everything through. Every time I’ve seen you at a
conference, I’m like, well, that’s one I’ve got to listen to. I find
everything you say so fascinating. And I’m really looking forward to
your book. Do you know when you think you might be finishing it? Or
were you desperately hoping I wouldn’t ask that question?

Right. Well, Doug, thank you so much for spending so much time with us
and for talking everything through. Every time I’ve seen you at a
conference, I’m like, well, that’s one I’ve got to listen to. I find
everything you say so fascinating. And I’m really looking forward to
your book. Do you know when you think you might be finishing it? Or
were you desperately hoping I wouldn’t ask that question?
Doug Shapiro (49:51)
Well, a…
No, no, no. I said I’m putting it out as a public commitment to force
myself to do it, but I’m aiming to do two chapters a month. I have one
more chapter I’m gonna put out next week, and if I do that, I’ll be
done by the end of the year. It’ll be finished.
Orlando Wood (50:11)
Well, infinite content, will be ordering it the moment it’s out.
Doug Shapiro (50:13)
Yeah. Yeah,
I’m going to write infinite chapters.
Orlando Wood (50:17)
so much, Doug. I really appreciate you doing this. It’s such a
pleasure. Thank
Doug Shapiro (50:18)
Sure, yeah, it was fun. It a good conversation. Yeah,