Advertisers are paying attention as Meta’s Twitter Rival Surges

Did Zuckerberg Invent a Twitter Killer?

Threads debuted Wednesday night with a bang. Meta’s new social network amassed more than 10 million subscribers within seven hours of its launch, attracting celebrities and politicians such as Oprah Winfrey and New York Democrat Representative Alexandria Ocasio-Cortez.

But the presence of major advertisers such as Procter & Gamble and Ford points to the greater commercial stakes in the battle between Mark Zuckerberg’s new platform and Elon Musk’s Twitter.

Meta bills Threads as a “friendly” forum, but the social media giant shoots the bluebird. Mr Zuckerberg wants the platform to become “a public conversation app with more than 1 billion people”. And he talked to his nearly 600,000 Threads followers, comment with a laughing emoji when someone suggested the new social network could be Twitter’s downfall.

Advertisers are watching closely, even though they can’t buy ads there yet. “Threads can really fly and people are clearly concerned about brand safety on Twitter,” Martin Sorrell, the longtime ad magnate who now heads S4 Capital, a digital marketing firm, told DealBook.

Twitter’s new CEO Linda Yaccarino joined last month with the aim of repairing relations with major brands that left the platform after Musk bought it and handpicked an army of content moderators. “Controversy is a negative thing and not something brands want to deal with,” said Mr. Sorrell.

Meta has had its own issues with privacy and dataand some have already expressed concern about it how it will deal with disinformation on the platform. But the company has made progress and is seen as a real alternative, Mr Sorrell said, adding that the timing of the launch, just as Twitter tries to limit how many tweets users can see, is “advantaged”.

Meta can also benefit from the weight of its platforms and advertising business. The company has imported features from Instagram, which is used by about two billion people every month. And it’s targeting the same lucrative audience of digitally savvy creators, said Adam Mosseri, the head of the photo-sharing app in an explanatory video.

One sticky feature: If a Threads user wants to delete the account, she must do so Also delete her Instagram account. Would that invite investigation from the FTC, which has promised to crack on companies making it too hard to opt out of a service, DealBook wonders?

Mr. Musk was not impressed. “It’s infinitely better to be attacked by strangers on Twitter than to indulge in the false happiness of hide-the-pain Instagram,” he tweeted.

Not everyone can use Threads. Are available in 100 countriesBut not in the European Union while Meta and privacy watchdogs battle over the company’s handling of user data. There are also no direct message or live stream options, unlike Twitter.

HERE’S WHAT HAPPENING

Fed officials suggest multiple rate hikes are on the way. Minutes from the central bank’s rate-setting meeting last month show that some officials favored rate hikes rather than holding, as efforts to curb inflation are making slow progress. Economists and investors will be watching Friday’s jobs report for further signs of how aggressive the Fed will be on interest rates this year.

The Biden administration is appealing a ruling restricting communication with social media platforms. The Ministry of Justice is trying to tilt a court order barring a slew of government officials from encouraging companies to remove certain types of content. Meanwhile, the State Department reportedly cancelled a regular meeting about hacking threats and the 2024 election with Facebook executives.

Donald Trump raises more than $35 million in the second quarter. The amount was nearly double what the former president raised in the previous three months and shows how multiple indictments don’t seem to have hurt him politically. Meanwhile, Florida Governor Ron DeSantis is still struggling to make a strong case against Mr. Trump.

Interest in ChatGPT and others seems to be cooling off. Both web traffic And app downloads for the hugely popular AI chatbot and peers like Bing have declined, new research shows. That suggests that ChatGPT’s novelty is wearing off among mainstream users, even as the tech industry continues to be very enthusiastic about artificial intelligence.

Two big entertainment magnates team up

After stepping down as one of Paramount Global’s top executives last year, David Nevins has found a new position: CEO of The North Road Company, the studio founded by fellow entertainment veteran Peter Chernin.

The hire gives North Road a chef who has helped produce some of the biggest series of the past two decades, DealBook’s Lauren Hirsch and The Times’ John Koblin report.

Industry executives had wondered where Mr. Nevins would go after Paramount. He rose to prominence for producing shows like ‘ER’, ’24’ and ‘Friday Night Lights’. He then joined Showtime’s entertainment division in 2010, overseeing hits such as ‘Homeland’, ‘The Affair’ and ‘Yellowjackets’.

By the time he left last yearwas mr. Nevins became chief creative officer of scripted content for the streaming service Paramount+.

mr. Nevins teams up with a highly regarded Hollywood veteran. Mr. Chernin, Rupert Murdoch’s top deputy at News Corp., founded Chernin Entertainment in 2010 and has produced such films as “Ford v Ferrari” and “Hidden Figures.” He then founded North Road last year, which also includes Chernin Entertainment, to create an independent studio aimed at feeding Hollywood’s hunger.

To build his new venture, Mr. Chernin has acquired companies including Kinetic Content, which produced “Love Is Blind” for Netflix, and documentary producer Words + Pictures, which was behind ESPN’s “30 for 30.”

North Road has a lot of money behind it. It raised $150 million this year from the Qatar Investment Authority, valuing it at around $1 billion. That’s in addition to the $500 million investment firm Providence Equity Partners put into North Road at the launch, and $300 million in debt financing from Apollo.

Mr Nevins arrives at North Road at a turning point for the entertainment industry. After years of runaway spending on content in the name of subscriber growth, streaming services are cutting back as Wall Street sours on the strategy.

Mr. Chernin claims that entertainment giants will increasingly focus on working with independent production companies with quality content and solid financials.

“This is going to be a good time to be a well-funded company,” Mr. Nevins told DealBook.

A new story for Taylor Swift and FTX

Last year’s sudden collapse of Sam Bankman-Fried’s FTX ensnared a slew of celebrities who had become paid ambassadors for the crypto exchange, including celebrity quarterback Tom Brady and his then-wife, supermodel Gisele Bündchen.

However, one superstar who escaped the mess was Taylor Swift. The pop singer received praise for her business acumen after Adam Moskowitz, a lawyer who sued Brady and Bündchen over their FTX ties, said Swift had struck a similar sponsorship deal. The truth is more complicated, report Erin Griffith and David Yaffe-Bellany of The Times:

In an interview with The New York Times, Mr. Moskowitz said he had no prior knowledge of the talks.

In reality, Ms. Swift’s side signed the sponsorship deal with FTX after more than six months of discussions, three people with knowledge of the deal said, and it was Mr. Bankman-Fried who backed out. The last-minute reversal left Ms. Swift’s team frustrated and disappointed, two of the people said.

A spokeswoman for Ms Swift declined to comment.

Canada makes the news

A fight between Canada and Big Tech made more headlines on Wednesday after the country’s government pulled ads from Facebook and Instagram. The reason: Meta, the social platforms’ parent group, said it would block access to news in Canada because of a law requiring tech companies to pay media owners for links to their news content — a regulatory process that is being closely monitored by legislators around the world as a potential model.

The law goes into effect in about six months. The Canadian government says digital platforms, such as Meta and Google, have benefited from free content while devouring publishers’ ad revenue. The tech companies counter that their platforms have increased publishers’ ability to reach an audience.

A push to regulate is gaining momentum. Australia will introduce similar rules in 2021. Meta blocked news there, but relented after tweaks were made. The company and Google then negotiated deals with Australian media companies and publishers have brought in millions. Canadian law built to Australian modeland other countries are weighing their own measures.

Canada is especially angry with Meta. Canadian heritage minister Pablo Rodriguez accused the company of being “unreasonable and irresponsible” for having no dealings with the government, unlike Alphabet, Google’s parent group. He added that pulling the ads would cost the company millions.

US lawmakers are watching. California introduced a similar bill in March and some federal lawmakers have expressed support for Canada’s approach. “It is unacceptable that companies like Google and Facebook abuse their power to cut off access to news. Leaders are right to stand firm against these tactics.” Senator Elizabeth Warren, Massachusetts Democrat, tweeted. Senator Amy Klobuchar, Democrat of Minnesota, who has co-sponsored a similar bill to those in Canada, the newspaper The Globe and Mail reported lawmakers must resist corporate pressure: “Of course monopolies will fight us every step of the way.”

Meta did not respond to a request for comment. A spokeswoman for Google said the company hoped talks with the government could help allay concerns so it doesn’t end up blocking information.

READING THE SPEED

Offers

• JetBlue said yes withdraw from an alliance with American Airlines after a judge blocked the partnership due to opposition from the Justice Department. (CNBC)

• The Raine Group, the investment bank focused on sports, media and technology deals, Raised $760 million for his latest investment fund. (rain)

Policy

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