[this first appeared in Audio-First, a newsletter focused on audio]
I’m slowly stumbling towards a Grand Unifying Theory of Media. I’m not there yet, but I previously reduced it to “mind control.” That’s effectively the game for creators: how desirable was your mind control? As the neuroeconomist Paul Zak notes, “A good story’s a good story from the brain’s perspective, whether it’s audio or video or text. It’s the same kind of activation in the brain.”
Recently, hearing Gavin Baker talk about The Metaverse added a new layer of perspective:
“The metaverse is simply a series of connected virtual worlds I firmly believe the majority of people will spend a majority of their waking hours within my lifetime. Today, most of those worlds are called video games. And I would say The Metaverse being the culmination of the internet is a relatively accepted opinion amongst early-stage venture investors and large technology companies…as you see a DJ named Marshmello did a concert in Fortnite that 40M people watched. There’s a special Star Wars event. There’s already events regularly in every video game. I’m more and more convinced that video games will be foundational to the metaverse. One signpost there is we have a lot of data on internet traffic. According to Verizon, Video Game traffic is up 100%. And Telecom Italia saw video game traffic up 75% and social media traffic up 0% because people are connecting through video games.”
The full picture here is that audio (and anything Audio-First) is part of an umbrella of media-tech that allows you to enter a virtual world. Listening to a podcast like Serial is quite a bit different than a persistent virtual world like Fortnite. But fundamentally, and neuroscientifically, they’re on the same spectrum. They compete for mindshare.
Now if you’ve read Snow Crash, you know there’s 3 different ways to access the proverbial Metaverse: high-quality home VR, grainy public arcade-style VR, or for the real addicts, a portable headset. (Eerily similar to what we have today). What attracted me to audio & audio-first tech is that the third portable option has seen a lot of momentum technologically–airpods, music streaming, podcasting, voice assistants, generative audio, conversational AI–these all seem to be converging on a compelling virtual world that’s portable. Sure, it’s not complete immersion like our home system. But it delivers something that only requires 70%-attention, allowing us to get a taste of the giant computer-storyteller-machine while going about our day.
That’s why I wrote in edition #4 that the reason I’m ‘long’ audio is because I’m ‘long’ distracted consumption. There’s just a shocking amount of surface area unlocked.
With COVID-19, however, this is short-term a bad break for audio. Music streaming and podcasting and AirPods are built upon the assumption that people can consume on-the-go. Unsurprisingly, podcast listening is already down from the start of March. Similarly, musicians, who rely on tour income and second jobs to pay the bills, are very much affected. I suspect this will all rebound as normalcy returns, but this is a seriously bad demand shock.
On the startup front, things are tricky for the time being. Smart guy and friend of the show Michael Dempsey wrote a great summary of why startup funding is still on hold right now. The demand shock, the asset-wide allocation, and general uncertainty has already affected the funding environment. Similarly, Chamath Palihapitiya highlighted on a must-listen pod that companies are now price takers, and said that founders can expect 30% haircuts. For now, the startup go-go days are on pause.
Finally, as I hinted in the last edition, COVID-19 is a likely boon for tech giants like Apple. Apple also has a massive balance sheet to make smart acquisitions. With much of the tech industry reeling from the fallout, Apple’s $200B cash-on-hand could buy a wild portfolio of services and hard tech (say sound-producing nanomaterials, h/t Dror Poleg). Already, it’s snapped up Dark Sky and NextVR in just 2 weeks. The NextVR acquisition, in particular, hints that Apple is taking this concept of metaverse extremely seriously.
Right now, the world is rife with predictions about what COVID will bring and how it will change our habits. Just by exposure during quarantine, there’s a good chance people see the digital world as “primary” more than ever. That could bring metaverses here even faster. Short term, though, it’s a bad break for audio. Quarantine is showing how audio’s edge is dependent on people being portable. Obviously, our ears aren’t going anywhere and we won’t be sheltering in place forever. So I remain optimistic. As it stands today, though, tech giants seem better positioned than ever.
NpappaG 