🎂 Robert Thomson & Matthew Prince Fireside Chat

Robert, thank you so much for joining us on Cloudflare TV. This is Cloudflare's 10th birthday, and as I was looking over the schedule of who is going to be on board, we've got lots of friends in tech and a lot of techno-optimists that are out there, and I thought we need some people who are going to maybe play a little bit of a foil to that, and so I reached out to you, and I don't know that you're the perfect kind of techno-optimist or techno -pessimist that's there, but I appreciate you being willing to play that. Before we get to that, though, I think you're so much, you have such a, as the CEO of News Corp, you have such a unique visibility into what's going on, and I think a lot of us, we're 32 days out from the U.S. presidential election. What are some of the signals that you're watching, or what do you think are, what are we going to be surprised by? First of all, happy birthday, Matthew, and to you and the team, happy to be your present for the day. Look, this is a very odd election. It's made odd, frankly, by the candidates. It's made odd by the circumstance, and like many things in the age of COVID, this is a period where pre-existing conditions, pre-existing weaknesses are amplified by the virus and by the social consequences of the virus, whether that be in a business sense or unfortunately in a personal sense for those who are most vulnerable, and so in this somewhat feverish environment, having an election was always going to be that little bit more complicated, and I think with the debate, which was obviously a cage match and very unsightly in many respects, and if you wanted to refine it down, you could have said it was bluster versus fluster, and there was definitely a lot of bluster and a certain amount of fluster. There wasn't much enlightenment, and to crudely simplify it, this election has always been Trump versus Trump, and at the moment, Trump is losing to Trump, and I think the debate itself was evidence of why that's the case, and Joe Biden's handlers have recognised that. They've been very sparing about his appearances, quite obviously, but Trump certainly didn't help himself during the debate. There were moments of genuine concern, and so how this plays out in the next two debates, I don't think the vice-presidential debate will be – look, people should watch it on behalf of democracy, but it won't be consequential, and for the next two debates, there are two separate arguments. One is that the histrionics of this week were ghastly but compelling, and so more people will watch the second and third debate than has historically been so, or it was so ghastly and so many people were repelled that the audience will go down. I'll prognosticate mindlessly, because that's what people do around elections. I'm no soothsayer, but if the audience goes down and Trump continues to be as hyperbolic and as much a provocateur, then he will almost certainly lose. If the audiences go up and Trump somehow pivots, has the self-discipline to pivot, he obviously has a chance. I think it's probably closer than most of the opinion polls suggest. Exactly. No one knows precisely. Polls are more indicative than reflective, but unfortunately, depending on your politics, it is a profoundly important election with profound issues at stake around the direction, economic, social, cultural of the country, and that has been lost in the bluster and the fluster. I assume you'd get hazard pay for this, but if you were suddenly recruited to be the moderator of the next debate, is there anything that you would insist on as a set of rules or anything that you think could bring more civility back to this? A mute button would be a start. And they just shouted each other. Which the other person controls. It was, for Chris Wallace, it was obviously a Herculean task. He admits that he lost control of it. He did. But clearly, I think you have to penalise one or the other if they... Look, there's going to be a certain amount of interruption. When does interruption become eruption? When does it blow up the debate? And so making sure that there's a discipline in place, because frankly, neither of them were particularly self-disciplined this week. And so there need to be rules of the road, which there were, but there need to be penalties when you break the interruption speed limit. If you step back from this election, and you just look at politics around the world, I'm 45. I grew up watching Tom Brokaw on the Nightly News, which wasn't that much different than Peter Jennings. And it felt very civilised. And it felt very highbrow. And something globally seems to have changed. Is this the natural state of things that we're in now? And that's how things are going to be going forward? Or was sort of the debates and politics of my youth more of the natural state of things? Well, I'm not 45. So I'm somewhat older. There was always a certain degree of conflict in politics, a certain amount of hyperbole. When does rhetoric become hyperbole? When does rhetoric differ from reality? We do live in an age, and it's not just present in politics, where angst very quickly becomes anger. It metastasises rapidly. And you see that in the political debate, but you also see it online. And so how has social media become antisocial? And that's not to blame one company in particular, because in the end, we are responsible for ourselves. But the turning up of volume and the turning up of vitriol is characteristic of so many things. If you are interested in a sport, and your team is playing, and you go onto Twitter, and you see what people are saying about the players in your sports team, the fans of that team say the most abhorrent things about their own players. And they keep turning it up and turning it up. And so it is a characteristic of contemporary politics, yes. But I fear it's also a characteristic of our age. So I guess then that is a natural transition to maybe again, whether you want to take the mantle or not as the foil of the sort of techno pessimist. In the last 10 years, it does feel like tech, in general, has gone from sort of being a thing where we all looked at and said, oh, that can do no wrong, to one where it feels more and more like it can do no right. From your perspective, what have been some of the missteps of the technology companies that have kind of gotten us to kind of the tech backlash that we're living through right now? Well, I mean, part of it is what you might call myopic idealism. It was Aldous Huxley said that virtue is to be more feared than vice because its excesses are not subject to the regulation of conscience. Because you so believe that you're doing the right thing. And I'm sure many, many people watching today will have seen The Social Dilemma, which is worth watching on Netflix. And the melodramatic bits of that are mawkish and mediocre. But the interviews with the people that we're talking about who created or had a role in creating the contemporary digital marketplace are fascinating. And I think they capture that sense of misplaced idealism. And idealism has been used as an excuse for some wonderful things. It motivates wonderful things. But it's also an excuse for not acting to deal with the negative consequences. And the negative consequences, now, as you say, dominate the narrative rather than the act of creation, the act of connecting, the act of searching, the act of discovery, which were the core motivations for the creation of these very powerful platforms, which have evolved into dominant parts of the, not only the digital discourse, but the social discourse. When 95% of searches are with one company, when you have audiences of billions of people, when you're sometimes playing a role in connecting malevolent players, which is, if something is a publicly available tool, that is going to happen. When you have the cleverest, most creative engineers in the world making products that are intended to be impulsive, compulsive, addictive for young people, then, and I think that's recognized now, but not enough thought was going in early enough to, okay, if we're making this product addictive to the young, to adolescents, who we know are vulnerable from our own adolescence, from what we see, what we feel, if vulnerable people are the targets of highly sophisticated, mind-altering experiences, then what responsibility do we have in designing them to ensure the benefit outweighs the negative? And so what we're seeing now is catch-up. And it's the original sin of not designing in social and cultural circuit breakers. Yeah, and I mean, if I, you know, first of all, I'm struck, you know, the sort of blinded by the idealism. I mean, in a previous time, it was a lot of times the people who would go into journalism that were kind of the real idealists that were there, but then they served as really the gatekeepers for what actually got published. And the sort of idealism of technology was, let's just eliminate gatekeepers entirely. And we're seeing definitely the downside to that. You know, one of the things I've, as I've looked at this, and as we've had conversations in the past, that struck me is that in journalism, typically, as you look at major metropolitan areas, you would naturally have this dichotomy that would get set up where there was a, you know, there was the conservative newspaper and the liberal newspaper, and they would be from different perspectives, but people recognize that existed at some level. Do you think, is that the end game here? Is there going to be kind of, is there a conservative Internet and a liberal Internet? How does this play out over the long term as we are starting to, you know, put more gatekeepers and other pieces in place? Yeah, well, there's definitely more polarization. And actually, we created a little news aggregator called news.com, K -N-E-W-Z.com, because aggregation, if you customize, limits. And that's the contradiction of customization and personalization. Because of what you're interested in, whether it be TikTok or YouTube, you get more of what you're interested in. And so, one of the things that really hasn't been designed in is true serendipity, nor has the alternative viewpoint. And so, there are more people on both sides, on every side, who are seeing more of what has already convinced them to believe what they believe, and less that is challenging those beliefs. Yep. So, how do you deal with that? How do you change? Well, clearly media, professional media, has a role. And you do hope that in this age, the temptation for journalists to be activists is real and overwhelming, has a reaction against a president who's a provocateur. But that of itself is a fatal mistake, because it undermines credibility in journalism. And journalists should have the objective of being objective. And so, there should be a set of verifiable facts. Now, you can change the way that a story has an influence in the way you order facts, how you highlight something, what the headline is. I mean, there are a myriad of ways where journalism can either unintentionally distort or intentionally distort. And you hope the distortions are unintentional rather than intentional. So, that there is a pool of material at whichever side you're on, you can generally agree, is fact-based, and there's a fealty to facts, and there's a fealty to reality. Yeah. I mean, I think what you guys did with news.com, I've often followed your sort of critiques of how the Googles and the Facebooks have benefited from the work of journalists, but really captured so much of the value themselves. It seems to me like, what's the right strategy for the media industry going forward? It seems like there's a lot of attempts to, what feel like, put the genie back in the bottle. Is that the right strategy? Or is the right strategy to take the fight to them, like going after Google News by building your own Google News competitor? Or even more broadly, I mean, the question I asked you at dinner a long time ago is, why doesn't News Corp build its own search engine? Which, in the United States, if there were a Fox News search engine, it would be at least 5% to 10% of the market share overnight, and that's a $50 billion business like that. Yeah. Well, news.com, KNEWZ, for those of you who need to look it up and should, is a modest attempt at providing that kind of alternative. But when one company has such a dominant share of search, and that your surfacing a competitor depends on them to a large extent, and you look at the difficulties of DuckDuckGo and others in the US and in Europe, and Google's percentage, it seems, in most markets is continuing to grow, not to contract. And that's despite very smart people whose speciality is search, which is not really our USP. But look, I think you have to keep an eye on algorithms. And as you noted, there should be algorithmic transparency, which is embodied in some of the regulatory reviews in Australia, for example, to a certain extent, in Europe, to a certain extent in the UK, a bit here. But I guess the algorithm itself will be part of the ad tech investigation. But the idea that these algorithms have a mind of their own, and they're not the result of parameters being set, is ridiculous. And particularly when it comes to news and what's surfaced and what's not surfaced, there are, we all search and we all see the biases. And so it's incumbent on, particularly on Google, when it comes to news surfacing, and anyone in that space to be as clear as possible about the parameters. And the problem with search now, and so much of news, like everything in society, it's become hyper politicised. And so there's a huge amount of pressure on Sundar and others at Google to go a certain way, again, partly because of the movement against the president. And there's people who believe society at stake don't believe necessarily that Google should be objective, because they wouldn't necessarily believe in objectivity. And so those existential debates that in a way we have to have, so that there are a set of standards that are reliable. And that we can agree to disagree. But if we can agree on certain standards, there may be a universe of content that has influence on both sides. Because the fear is that what we now have is just an early phase of customisation. And the customisation will combine with outrage culture on both sides. And the myopia that has seemingly been designed into a lot of digital experiences now, that we're just at an early phase of that. And early in life, people become almost victims of alternative realities. You know, I'm struck though, that as you look at sort of the regulation that's coming out of Australia, and to a lesser extent, Europe, but certainly feels like it's that if you just replaced tech with journalists, and you said, we're going to pass some regulations on how individual news publications make their decisions. I mean, that feels like that would be problematic. What's the difference? What's the difference between that, which I think you and I would both agree would be wrong. And where when you replace it with tech, that is something that you would be more supportive of? Well, because in a sense, the content sets have already been created, and not all content is created equal, there's a hierarchy of content. And that was one of, to be honest, one of the original sins of the digital age that there was a commodification of content, that authenticity, that provenance were corroded. And we're paying a price for that now, truthfully. There were several original sins, that was one of them. And so there is stuff that's somewhat believable, entirely unbelievable, more believable, more fact based. And you do have to make qualitative judgments about the efficacy of editorial. And then create standards that reward people who have higher standards. So I think there's a difference between the implied censorship of here's what you need to write. It's more, here is what has already been written. And here is why this material is more believable than that material. Because if you think all content is horizontal, then the most nefarious user generated content has the same standard of accessibility as the highest form of journalism. Do you think that if there were more competition in the space, if there were, you know, five different search engines that were competing, if there were five different social networks that were actively competing, that you didn't have as much consolidation? Would that solve the problem itself? Or is the nature of technology going to be something that eliminates providence from the publications? Well, more competition would be better in all sorts of ways. But tech is a scale play. And you reach for scale, you search for scale, scale is your quest. And once you have scale, the social mechanic and the commercial mechanic changes entirely. And so if you had a search engine whose USP was the authenticity, you could say, we have the authentic, then sure, but that's truthfully not the age that we live in. And so it's going to be going to be difficult to create an alternative, which is why it's incumbent on Google, to be frank, to be as transparent about their algorithms as possible, to show that they understand that there are qualitative differences, that there is a hierarchy of content. And that the search engine should reflect that. And that those judgments can't be purely commercial, they can't be purely political. And there needs to be much more debate about it. That has been one of the frustrating things as a purveyor of journalism, and having thousands of journalists on our payroll around the world, that there hasn't been enough recognition of their professional standards, and their professional effort and the profoundly positive social impact of great journalism can have. Yeah. With 2020 hindsight, and that's a phrase that might take on different meaning after this year, what could the media and what could journalism have done differently over the course of the last 20 to 30 years, that might have helped rectify some of the challenges that it currently faces? We're all going to have 2020 hindsight on January the 1st, 2021. But yeah, look, journalism, editors were arrogant, journalists were arrogant. One of the faults of journalism has been the perceived sacredness of the role that high priestesses and the high priests of journalism believed that because what they were doing was so profoundly important that they couldn't do it another way. And editors were unaware of the need to be empathetic towards audiences in what you convey to them, when you convey to them, what platforms. And that was a great failing of professional journalism. And it was also failing on the commercial side, where I live now. And commercial teams just didn't see how the advertising market was changing. They didn't understand the importance of mobile early enough. Generally speaking, I'm sure some did. And some didn't. But those sorts of fundamental changes in the ecosystem were not reflected in the culture of most newsrooms and most media commercial operations. So is it purely the fault of Google or Facebook, or Amazon? No, of course not. And the culpability of the content creators is real. Switching topics just a little bit, you've spent a significant portion of your career in China. And right now, the tensions between the US and China seem like they're at all time highs. What's your analysis of what's going on and how this plays out? Is this just going to continue to get worse? Or is there some story where it resolves? Well, I hope not. I don't think we're in a very virtual cycle at the moment. I had the privilege of being in the White House when the US and China, when the President and Liu He signed the trade agreement. And you thought, is this the beginning of something? Well, it turned out to be the end of something. And since then, the tension has obviously ratcheted up, whether it be because of COVID or because of, quite rightly, the US holding China to account, asking questions about Chinese tech companies. That's right. I'm not sure how much of a social threat TikTok really is. I think maybe a behavioural threat, but I don't think it's a national security threat. Clearly, there are some issues with data. I mean, you could argue on the basis of reciprocity, because China doesn't allow Facebook and limits Google and so on. Yes, the US should bar the entry of big Chinese digital companies, but that's never quite been how the US has operated. So we are in a different phase of tension. And there are hawks in Washington, and there are hawks in Beijing. And when the hawks in Washington are screeching at their loudest, it actually empowers the hawks in Beijing. And that's the hidden dynamic that is so dysfunctional. And if you think about China, China hasn't been a global power projecting any sort of influence since the 15th century. There was an Admiral Zheng He, who sailed to Europe, to Africa. And he had brought back tales of Daring Do and exotic animals. And then basically, China shut down. And since then, China has been in decline up until the launch of economic reform in the late 1970s. And now China is clearly on the rise. I think one of the problems China has is that it's like the clumsy giant in that it has never had the power, nor the status, nor the prestige, nor the opportunity to get involved in the world that it has at this moment. And it is partly defining itself by how other countries define it. Because it doesn't have that certainty. It doesn't have that confidence. This is a newfound status. And if China is defined solely as an enemy, then China will define itself as an enemy. I'm slightly exaggerating for the sake of discourse. But that is potentially the dynamic that is being created at the moment. So I think it needs to be a much more textured approach. The Chinese had absolutely no problem, if you spoke to them, about being held to account on trade. Because the Chinese do see trade as a zero-sum game. And so the idea that they could get away with having a massive trade surplus and barriers to entry for foreign products, it was no surprise to them that they were being called on that. And so they were quite willing to make some concessions. Some of those concessions are quite significant. Some are not. But that was a recognition that China needed to change the way it operated in the world. And that's why those talks and why Liu He, the Chinese Vice Premier, was so important in that process. And that wouldn't have been the end of it. What China optimists were hoping was that that would be the first phase in a new cycle, first phase in a new era of accountability. Instead, that phase ended very quickly. And so there's a great deal of uncertainty now about what happened. The Chinese kind of get that we're now in the election season. And so politicians say things that politicians say, that they're smart enough to aim off for that. So they do wonder what things will be like come January and February, whether or not the tension continues to increase. Because if it does, then the world is not in a great place when the two most powerful nations are at odds with each other. Well, Robert, I really appreciate you making time to talk with us. This has been a real delight. And thank you for playing kind of the techno pessimist. Well, I'm a bit more optimistic today because Google just announced a billion dollars for journalism. That's good. So anyway, really appreciate it. Thank you. Stay safe and healthy. Take care. All the best. Happy