April 4, 2022

Finding Out What's Really Going On with guest Martin Peers

A lot of financial journalism about companies and markets lives and dies based on access. But what are other ways of finding out what's really going on? Joining us this week is Martin Peers, Senior Writer for The Information.


A lot of financial journalism about companies and markets lives and dies based on access. But what are other ways of finding out what's really going on? Joining us this week is Martin Peers, Senior Writer for The Information.

Transcript

Will Page: Welcome to Bubble Trouble, conversations between the economist and author Will Page, that's myself, and the independent analyst Richard Kramer, where we lay out some inconvenient truths about how the financial markets really work. Today we touch base with journalism's best-kept secret, the information which has been probing and piercing tech bubbles for the best part of a decade. We're in conversation with our stellar journalist Martin Peers. More in a moment.

Martin, welcome to Bubble Trouble.

Martin Peers: Thank you.

Will Page: I think we should start things off by just introducing yourself, introducing The Information for people who may not have heard of it, and also where they can find your work as well.

Martin Peers: So I am a veteran journalist, I've been around for longer than I want to even really mention, um, just so that ...

Will Page: [laughs]

Martin Peers: I've worked for the Wall Street Journal, a variety of other newspapers in both the US and in, um, Australia, which is where I'm originally from. Been at the Information now since 2014, we launched in 2013. And The Information is an online tech publication that tries to take a different approach to covering tech. We don't cover the c- commodity n- news that everything, you know, that, that gets announced by the companies.

Richard Kramer: Martin, it's, it's a delight to have you here. I actually do, uh, pay for reading the Information. It's worth something to read something beyond what is normally a regurgitation of, uh, press release headlines from companies. But, uh, I'm curious to start with, in your view of the role of sort of specialist sites like the Information in both feeding this incredible hype in the tech world a- and also quashing it. It feels like there's a tiny number of people who do real work here, and how do you strike that balance between making sure people are bringing you the interesting stuff they're doing and, and knowing that you might take a critical stance on it?

Martin Peers: You know, that's a good question. I think the reason that specialist sites, I mean, y- you know, the, the, the issue is that we have to differentiate ourselves. We can't just be like everybody else, 'cause otherwise why would anyone subscribes? And the other thing is, when we started, you know, no one had ever heard of us, we had to really establish ourselves by trying to go ins- side the companies, we, we hired really expert reporters who understood the industry, and th- I mean, most reporters for big outlets, they live and die by having access to companies. They have to write up all the announcements that the companies make, they have to write them up fast. You know, they're not allowed by the, sort of the doctrine of fairness to criticize things in the story, so what you end up with those publications is essentially a press release.

W- we don't even attempt that, so we're able to, we, I mean, we have the freedom to actually try to talk to people who aren't the official spokespeople to find out what's really g- going on. Now, we've s- suffered some of the same issues, which is that we are y- you know, often operating under very, um, constrained period of time. We don't have a huge staff. We, you know, journalists never have full access to information. But I think by being small, and independent, and not relying on the companies for news, and not trying to cover everything that they announce, it just gives us the ability to sort of try to present what is actually going on rather than what the companies would like us to think is, is, uh, going on.

Richard Kramer: And, and I guess just to paraphrase the, uh, the great motto of, of a famous English football team and about forever blowing bubbles, I mean, you know, the, the theme of this podcast is Bubble Trouble, and, and obviously you're not in the clickbait-chasing headline, trying to build your advertising revenue by how many clicks you got on having the first view of the headline. But, but clearly companies are always trying to influence the work of sites like yours and, and trying to play the media, make sure they get favorable coverage, or, or get their pet projects, uh, reviewed such that you'll add to that hype. I mean, how do you balance that, and obviously wanting the companies to bring ideas to you, and, uh, the fact that you might take a, a less than fawning view of those pet projects that come across your desk?

Martin Peers: Well, the thing is, the companies often don't try to influence the information as much as they do others, because their view is if we're not writing about their daily announcements, they won't even include us in, in many of the, um, briefings that they have, because they know we'll, you know, the Information won't even, uh, r- report it. So we're not ... And, and that does force us to sort of find out our own stories. Obviously they do try to influence us. Depending on the company, they might put people on the phone. I- it's a b- balance we have to strike. But we're not exactly in the same position that everybody else is in.

And, and, you know, the, I, I write a commentary every evening which is reviewing the day's news, and what I deliberately try and do is say, "This is what the company has announced, this is what everybody is reporting, this is really what's, uh, going on over th-" t- to the extent I'm able to, I try to sort of get under the hood of what's actually happening.

Richard Kramer: Hm. And, and I imagine you have generated a lot of negative feedback or animus from the comms teams that are obviously trying to carefully manicure the message of their senior management, and I know they, and, uh, Will Page might be able to reflect on this, they can get very upset sometimes if that carefully-manicured message somehow swerves off-base or you point out some inconvenient truths as we like to on thi podcast.

Martin Peers: Yeah, I've found some people, I- I've had people, like, just tell me, "You're a complete m- moron."

Richard Kramer: [laughs]

Martin Peers: Some people can be incredibly rude. Other people just sort of say, "I give up, I- I'm not even gonna try to, to, to talk to you, because you're not, you won't o- you, you know, you won't pay any attention to me." Other, there are o- o- o- there are others, though, who do try to give me their point of view, and I mean, I, you know, I'm always, um, open to hearing that. But I see my aim as to not regurgitate the blather that the companies put out, I try to, to say, "This is what's really going on."

And look, it's difficult, because you don't, you're a reporter, you don't really understand what's happening on the in- the inside. You can only comment about what's happening externally. But anyway, I, uh, try.

Will Page: I, I think we should have, uh, podcast bonus material, which is Martin's top 10 insults that he's received in his long, distinguished-

Richard Kramer: [laughs]

Will Page: ... career, just for the s- the subscription payers. And Martin, two questions from me before we go to the break. The first one I wanna, I wanna y- pick up in two words that you can already imagine, which is speed and frequency, and the way I want to carve out this question is, when you have your favorite band, you get really upset when they chase someone else's sound. It's like the band are selling out, they're trying to pretend to be someone else. And when you t- you see journalists, the speed to which they have to turn out stories, and the frequency to which they have to publish them, do you sometimes worry that journalism finds itself chasing a different sound? For example, the Economist was always, I've read the Economist since puberty. You know, Fridays, you get the Economist, Saturday morning I read it cover to cover. It's been like that for decades.

But now they're trying to get into sort of more frequent, quick turnaround journalism. Do you think journalism's got itself in a bit of a catch-22 where you have to chase this, this speed and frequency thing, but that you lose out what made the journalism so special in the first place?

Martin Peers: Absolutely. Look, I think the truth is, j- j- journalism, and I can say this as somebody who's been doing it for 40 years-

Richard Kramer: [crosstalk 00:07:40]-

Martin Peers: ... so I'm a little bit jaded. But I don't think journalism does what it p- purports to do. It's pretending to report on what's going on. What it's actually doing is it is a product that is designed to get people to click and to subscribe, I mean, there was, this, this happened just the other week. Amazon reported earnings, the Wall Street Journal, and I'll get in trouble for, um, saying this, but their first story about it, "Amazon doubles net profit, was, this was very unexpected."

I read through the entire story, and this is the first version of the story. Nowhere in the story did it mention that the entire increase in this profit was due to this temporary write-up of their stake in Rivian. If you excluded that, then their profit went down by half. Now, they did update the story eventually to include this, but it struck me that basically those stories are, you know, just a press release. And, and I kinda think, why don they just print the original press release, and then have somebody who actually is a reporter write a story which describes what's really going on?

Will Page: I agree.

Martin Peers: And that's what the Information tries to do.

Will Page: You make me want to subscribe, it's so needed.

Richard Kramer: [crosstalk 00:09:02] can I say that that is exactly, we've had podcasts about analysts and calling them sycophants and stenographers, the ones who say, "Congratulations on a great quarter," and then-

Martin Peers: Yeah.

Richard Kramer: ... ask the question, "How should we think about-"

Martin Peers: Yes, yeah, yes.

Richard Kramer: ... and it is just, it shows you that that critical distance that you think of as essential to being an analyst or being a journalist is just lacking, it's not there.

Martin Peers: Right. And if you listen to, Netflix has a quarterly earnings where they have one investor who comes on and asks all of the questions. And the one that they've had on recently, she has been just, you know, "Oh, th- I loved Sq- uh, s-" what is it?

Richard Kramer: Squid Game.

Martin Peers: Squid Game. "I love that show, I love this, I love that. Tell me," I mean, it's like a fan.

Richard Kramer: Yeah.

Martin Peers: I mean, there's, there's, they're not even attempting to ask, you know, tough questions.

Will Page: "I love how you amortized the cost of Squid Games even more." [laughs]

Richard Kramer: [laughs] But the, but the reality is, as an analyst, and I imagine there's an analogy for you as a journalist, is that those conference calls are staged media events where the companies pick the analysts that ask them questions based on-

Martin Peers: Right.

Richard Kramer: ... their favorable ratings. And I could imagine the Information being one of those folks in the back of the room with their hand up saying, "Can I ask a tough question?" And as the company management scans over the room, just doesn't seem to alight on, on Martin Peers to be the next questioner.

Martin Peers: Those things are not really even for, um, reporters. So-

Richard Kramer: Yeah.

Martin Peers: ... we don't even get to, to ask the questions. But I, I would say, I don't know, R- Richard, I'm sure that you've, that you've been on those, 'cause I've, I've heard you on the Spotify one. But the answers that most of the companies give are just blather, I mean, they're just sort of meaningless. You know, there are occasionally executives who will talk in plain English, but they're very unusual.

Will Page: I w- and I wonder whether the information has been subject to the Ronald Reagan effect. Little-known fact about Ronald Reagan, the first ever PR president, United States of America. And the way his PR team managed Ronald Reagan was you only put him in front of the press when he was boarding a really loud helicopter. That way, he couldn't hear the questions. [laughs] They got away with that for seven and a half years. And last question before the break, and it's a contrarian question, which is I've always heard this analogy from the Valley which is, "It's easier to make money when bubbles burst than when they're bubbling." And as an economist, economists are needed when times are bad, they're kind of overlooked when times are good. And there's a correlation-causation slant to this, which is, do you think that it's gonna be easier for the Information to attract new subscribers now the tech stocks are down than when they were up? That is, there's an appetite to work out what went wrong as opposed to hearing what's going right.

Martin Peers: You know, I'm not an expert in that side of the, of the operation. I would say that, I think that what our experience has been, we attract new subscribers regardless.

Will Page: Mm-hmm [affirmative].

Martin Peers: Um, but I'm really not sure. I mean, that's just not what I pay attention to. I try to avoid that side of it and just focus on actually the, uh, stories, and, and what's been going on elsewhere.

Will Page: I think I would, looking back at your distinguished career, take heart from the fact that when the pendulum swings to the bad times, people are gonna want your type of journalism more, not less.

Martin Peers: I think that that's probably true, yes. I th-

Richard Kramer: That is, and, and maybe bef- as we got to the break and, and think about some topics for the second half, there is always a question that Martin, I'm gonna ask you to reflect on, which is, for both investors a- a- and individuals working inside tech companies, something I call FOFO, which is fear of finding out. And sometimes the truth hurts, and sometimes, for example, the employees at Theranos didn't really wanna know that, that the whole thing was a house of cards, and maybe are a little bit disturbed by some of the stories you write. And we can come back to that, the dynamics of the market, and preserving journalistic integrity in our second part. We'll be back in a moment. [silence]

Welcome back to the second half of Bubble Trouble with the peerless journalist, experienced tech veteran Martin Peers, uh, senior writer for the Information, one of the, the best and most incisive sites out there, and one that I've certainly read a lot of stories which uncovered inconvenient truths about some of the companies, especially, s- seemingly SoftBank-backed companies from time to time. Will, do you wanna start off-

Will Page: [laughs]

Richard Kramer: ... asking, uh, uh, further on your contrarian question about what's driving demand for sites like the Information?

Will Page: Yeah, I, I just go back to the origins of thinking up this podcast called Bubble Trouble. We're going back to, like, May/June 2020, the dark, dark months of lockdown, really scary time. And I remember Richard Kramer going on one of his eloquent rants about, "Nobody's riding in Uber's anymore 'cause of lockdown. Stock price, up. Nobody's staying in Airbnb anymore, stock price, up." And it just struck me just how uncharted waters we're in right now, how none of this is making sense. And you've seen the stock market more than double in the past 18 to 20 months, you've seen stocks go through the roof, which have got no revenue to underpin that justification. We are, to repeat the word in uncharted water, do you think that's driving demand for the Information, which is somebody somewhere has got to have the time and the patience, the veteran journalistic skills to figure this out?

Martin Peers: I would guess so. I mean, I will say that in that period that you were just talking about when prices kept going up, I, I got so tired of, um, writing like, "This doesn't make sense."

Will Page: [laughs]

Martin Peers: And at a certain point I thought I must be b- boring everybody, because I'm just making the same point over and over again. So I think maybe now, uh, that we've, those of us who were criticizing the, th- that period have been vindicated. Y- you know, I think maybe you're right, that people are kind of looking for both an explanation of what are the stocks really worth, but also what's gonna happen next? So sure, I mean, I, I'm not sure, I can't really, u- um, understand why people subscribe. It's not what I focus on, but I think that that may well be the case.

Will Page: Maybe with could rebrand the Information, instead of calling it the Information we should call it the Hangover Cure. Perhaps then-

Richard Kramer: [laughs]

Martin Peers: [laughs]

Richard Kramer: And, and when we think about the market being one thing, and, and obviously your journalistic integrity being another, I mean, h- how do you balance that willingness t- to, to buy into the tech hype? Because I, I always describe it on other podcasts about this eagerness to find the shiny new toy. We all like to discover the new gemstone that no one knew about, that'll become the, the next diamonds or rubies or emeralds, versus the hard realities of, of a one or 2% economic growth, and a zero-sum game, and the fact that for every hockey stick curve that is projected to go up, you've gotta have something that's plunging on the other side. So how do you balance that, uh, desire to find the next big thing, uncover it, bring it to people and get them excited about it with the reality that, you know, something else has got to give up, because we only have so many hours in a day or so much money to spend?

Martin Peers: I think it's really hard. I mean, look, that, it sort of goes back to what I was, um, saying earlier, which is that most journalism isn't really journalism. It's not in- it's not intended to tell you what's really going on, it's intended to get r- readers. You know, Apple, for instance, has this symbiotic, um, connection with the media. How many times have we read stories about, "Apple's gonna have a new feature on its AirPods, Apple's gonna have a new piece of software." I'm like, "How are these stories?

Richard Kramer: [laughs]

Martin Peers: So, you know, I, I think that most publications, they t- they try to have, like, some of that stuff to draw in readers, and they will then occasionally have harder-hitting stories. I think we try to move more in the direction of the harder-hitting stories than the others, but I think everybody, that's a, it's a very tough balance. And I personally think there are certain pu- publications that it's just like a joke. I mean, you see these, um, tweets they put out. "We just announced this story," which is just basically a company giving them something, and it- it's just really disillusioning. I, you know, I think is the best way of, um, putting it.

Richard Kramer: Believe me, I feel the same way when I see most of the analyst reports out there which just, you know, you have stocks that routinely lose two-thirds of its market value, and all the way down the analyst just says bye.

Martin Peers: Right.

Richard Kramer: And, you know, there's, there's just a, a ... We, our phrase for that is to resort to the tagline, wrongly attributed to Mark Twain, and I've used this with you before, "Never expect a man to understand something when their job depends on not understanding it." And I suppose that rewritten press release on the part of several si- tech sites that we all know is just a form of choosing not to understand that that feature is meaningless.

Will Page: Uh, just on that question, it makes me think you could do a survey of, like, financial journalists out there, say, "Do you own a Peloton?" And for those that say yes, "Were you given one by the company?" [laughs] There might be a story in that. Anyway, save that one for a future date. So Martin, I, I wanna turn to the economics of news, of newspapers, if that's the right word, of news websites, of newsletters. And I'm really obsessed about this point, I'm gonna step back for a second and say we're gonna learn in March that there was half a billion people paying for music. Music you can always get for free, news you can always get for free, but for some reason music seems to have cracked the subscription business. People are now paying for something you could always get for free.

Now, it's getting harder and harder for newspapers to get people to pay. More people have listened to the December 20th episode of Joe Rogan, the one that caused a controversy, than subscribed to newspapers in the entire United States of America. Interesting fact. More than 50 million. So given it's so tough, I kind of want to work out where the Information sits in a spectrum. At one end you've got the traditional newspapers, their apps for me are like website shoved inside a phone, you know, there's all sorts of issues with churn with these titles as well. You know, it doesn't seem to be working.

At the other end, you've got the newsletters, the Substacks, the Ben Thompsons, the Benedict Evans, and you guys, the Information, seem to sit somewhere in the middle. It's not a newsletter, but it's not a newspaper. And I just kinda want to understand, where in that spectrum do you position yourself, and do you look at what's either side of you and see that as a threat or a complement to what you're doing?

Martin Peers: Well, that's a very big question. Look, first of all, I would say, I haven't got those figures that you mentioned, but I think that a lot more people are paying for news of various kinds than maybe you're, you're appreciating.

Will Page: Mm-hmm [affirmative].

Martin Peers: If you think about it, Substack, you know, the New York Times, the Wall Street Journal, the, uh, Financial Times, they're all subscription-only now. You know, I think that there's a vast range of publications which do require a user pay, so I think there is a portion of the population that is willing to pay for what they think is quality. And I think we're just at the upper end of that, I mean, 'cause we ch- charge more than most, and we have a, a, you know, a smaller audience, but our aim is to provide a more high-quality source of information. [inaudible 00:20:23] we're not publishing hundreds of stories daily, we're publishing a very small number, but those stories are meant to be very good.

Will Page: Well, if I could push back on it just briefly, I just think, yes, there is maybe 13, 14 million Americans paying for newspapers, but there's 130 million Americans paying for music. And I just struggle to understand why is the gap so wide? One just other, complementary observation to throw at you there is when you look at paying for a newspaper, there's deep discounting. If you're a student, you're told that the times costs nine pence a day. I don't know whether pricing quality journalism at nine pence a day tells you it's quality journalism. But that's the type of discounting you're seeing in the market.

But when you look at newsletters, there's no discounting. If Ben Thompson says it's $130 upfront for a year, he gets $130 upfront for a year. And I just wonder whether there's something in that in terms of who's got the intrinsic value, the integrity to command a price that doesn't d- demand discounting, versus a newspaper title, which seems to be caught in quicksand by the way they're pricing their product.

Martin Peers: You know, I think this sort of goes back to what we were talking about right at the beginning. What I was trying to get at is that most big publications don't have the resources to do the job of doing really in-depth reporting-

Will Page: Mm-hmm [affirmative].

Martin Peers: ... and f- really finding out what's going on. So, but they're trying to be all things to all people. So they're trying to cover everything, and most of what they're actually doing is covering is just, you know, really thin stories. So maybe the, the trick, and what we're trying to do, and what Thompson's doing, which is having a very small number of people, and doing a very specific thing that is very in-depth, and if you are willing to pay for that, then that is for you. That that's, y- that's a fairly small market.

Will Page: I think you've got close to it. I think there's one word to wrap this one up with, which is perishability. Like if it is quick-fire, frequent, speedy journalism, it's perishable. And that's not the same thing as subscribing to a music service which as Led Zeppelin's back catalog on it. That's not perishable, that's timeless. But an article-

Martin Peers: Right.

Will Page: ... in the f- in the Information for me is not a perishable good, and if I read that, which might take a couple of hours, and if I share that with colleagues to say, "This is a great discussion point," that's a non-perishable good, and I think that's what's gonna make you guys distinguished from the rest of the market is the fact that your journalism is not perishable.

Martin Peers: Yeah, you know what, I think that that's actually, uh, true. Often, you know, companies going public, companies that you haven't heard of, I have found that we, we, you can often search back in our archives and find these in-depth stories which actually are as valuable now as they were then.

Will Page: Hm.

Martin Peers: So yeah, I think that there's definitely, uh, something.

Will Page: [laughs] Martin, as a non-smoker, we do like to do some smoking at the end, which is to ask our guests for a couple of smoke signals, warning, uh-oh moments, where you hear something in the corridor, the virtual corridor, or you read something in the press, the online press, and you just think, "Wait a second," turn around, and find a different room. So I'll toss the mic over to you just to tell our audience, uh, a couple of established smoke signals that you've spotted over your decades in, i- in financial journalism. What are the two sort of signals that you see out there which make you think, "Whoopsie."

Martin Peers: Well, in the case of SoftBank, there was a- some weird stuff going on where M- Masayoshi, uh, Son was-

Will Page: Masayoshi Son, yeah.

Martin Peers: ... yeah, was doing something about his personal shareholding, and the, the, the stake he would personally get that made me wonder, like, what's really going on here? I mean, the biggest issue with him is, you know, that their f- finances are so c- complicated you can't really figure out what's going on. It just, it doesn't really seem to be good. A- any, any company that is borrowing that much m- money and investing that much money in the market just doesn't seem likely to end well.

Will Page: Mm. And [inaudible 00:24:17] one other thing that is, a- and I'm always interested in this in terms of you choosing, o- or y- the, your own mental algorithm for story selection. What is it, when you think of all the fascinating topics in tech you could write about, and all the, these big companies, which there's really something to say all the time, what is the, what are the, some of the key patterns you look for to say, "Right, this is going to make a really juicy story to dig into."

Martin Peers: Well, the things that I'm writing, I mean, which is opposed to what everybody else is writing, I, where I, and I have to write every, every evening I have to write something, it's gotta be a, you know, a, sort of a quick s- um, snappy y- y- you know, I, I d- I try to pick something where there's a broader point to make, I'm usually trying to get at companies which are being, uh, dishonest or they're only telling half the truth, or, you know, there was that [inaudible 00:25:10] the other day that th- you and I had emailed about where Barry McCarthy was saying that, uh, he didn't come into Peloton to, to find a buyer, 'cause he had moved halfway across the country. I mean, give me a break.

Will Page: [laughs]

Martin Peers: That's sort of just completely absurd. So th- if there's any sort of, like, hypocrisy that I can sort of get at, that's what I like to sort of point out, is where companies are s- saying things which are clearly not true, or where the rest of the media is just taking it as fact. I mean, here's an example of something. Twitter, uh-

Will Page: [laughs]

Martin Peers: ... a while ago announced that they were paying out $800 million into s- s- settle a, uh, legal action. Everybody else in the media ignored it, because that's the kinda story that people just ignore. It's just not that, that big a deal. If you trace it back and find out why do they have to pay the money, you also look at the amount of money it was compared to how much money they have, and it was a huge proportion of it, and thinking like, "This is outrageous. Why does this not get more attention?"

So I picked that one, and that's just an example of, there are certain stories that the rest of the media thinks it's not interesting, and to me they get at the real sort of problems of the way these companies run.

Richard Kramer: And Martin, that's been a terrific point on which to wrap up, because there is a rich seam of hypocrisy from tech companies large and small for you to mine endlessly for your story ideas, because we've, we've never seemed short of companies making wild and outrageous claims, and sometimes when they get caught out not meeting them, they end up having to pay large settlements as well to clever lawyers. So with that, I wanna thank Martin Peers for a super interesting session on, uh-

Will Page: It's been [crosstalk 00:26:56]-

Richard Kramer: ... on tech journ- it's, on tech journalism, and some of the issues you contend with, and we look forward to having you back on the next, uh, episode of Bubble Trouble as bubbles continue to burst all around us. Thanks very much.

Martin Peers: Cool, okay, thank you.

Richard Kramer: If you're new to Bubble Trouble, we hope you follow the show wherever you listen to podcasts. Bubble Trouble is produced by Eric Nuzum, Jesse Baker, and Julia Natt at Magnificent Noise. You can learn more at bubbletroublepodcast.com, Will Page and I will see you next time.

[silence]