07 December 2021 |

Week of 12/7/2021: Perpetual’s Perspective

By Adam Ryan

TCG gets the credit they deserve

TLDR: Peter Chernin’s firm, TCG, raised a $1.2B fund. The firm has been at the forefront of content to commerce investments such as CrunchyRoll, Food52, MeatEater, Barstool Sports, and Lovevery. Now, they’re investing in crypto-based companies like Zed Run, OpenSea, and Dapper Labs (NBA TopShot).

Perpetual’s Perspective: This article is such a pump for TCG and it’s completely deserved. Peter Chernin may be one of the most influential media operators of our time (Avatar & The Simpsons, c’mon!) and he’s hired the very best minds to work with him. Ironically, TCG has historically lacked a content/distribution strategy of its own, despite having a reputation of being the best firm in the content game. But with a flood of hires who are internet native (like Jarrod Dicker, who will help them become the go-to crypto firm), I see few competitors who can catch TCG’s deal flow on this next wave of investments.

BuzzFeed loses its buzz

TLDR: BuzzFeed went public yesterday. The SPAC deal lost more than 94% of investor cash, which is nearly 3.4X worse than all other SPACs in the first half of the year — and 50% worse than SPACs in the last few months. Today, the stock is down more than 11%. BuzzFeed wanted to go public last year, but faced headwinds with COVID. Instead, they spent last year private and acquired Complex and HuffPo… but They finally made it happen this week, despite the headwinds.

Perpetual’s Perspective: Jonah Peretti is on the Mount Rushmore of web2 media companies. If AOL was the cultural winner of web1, then BuzzFeed was the cultural winner of web2. BuzzFeed created viral content and brands like Tasty, which onboarded the world to short-form video (you’re welcome TikTok). I found this letter that Jonah wrote back in June to be quite intriguing and forward-thinking. The issue? BuzzFeed has a pretty shit business model that’s getting more outdated by the day. Can they turn it around? Maybe. How about their acquisitions? Makes me bearish. They’re following the ole’ path of acquiring crap assets for cash arbitrage. I do hope Jonah and the team can turn it around because they deserve it, but it’s hard to exit a game you created — even if you’re losing.

TikTok Algo 101

TLDR: Ben Smith and the NYT got their hands on a leaked document from TikTok that was titled “TikTok Algo 101”. It breaks down the 4 main goals of the algorithm: “user value,” “long-term user value,” “creator value,” and “platform value.” The extensive piece gives a glimpse into the power of the social media giant and how they think about their addicting app. The leaked document was written in clear, but nonnative English from a Chinese tech perspective. Though it doesn’t mention Facebook and Google by name, the main employee mentioned in the doc is a former Facebook worker who now leads TikTok’s algo development. 

Perpetual’s Perspective: The TikTok algo is so good that I have multiple accounts, each with its own unique set of interests, because it feels impossible to go down rabbit holes you haven’t shown interest in previously. This piece claims the algo isn’t all that complicated — it’s mostly based on how long users view a video — but that the amount of data TikTok is collecting is their secret sauce. This much data, with that much attention, has driven bi-partisan support from the US government to place restrictions on TikTok US and their parent co, ByteDance, based in China. Frankly, I wish the government would shift even more of their focus from Google and Facebook, and put that energy towards TikTok. It’s already the top app in the world and is rapidly growing — and I don’t want China winning this battle.