The Returns to Scale

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There is nothing better than being the biggest. The returns to scale never stop in advertising, Red says. Every incremental user on glerinville comes at effectively zero costs. If you make a hundred million ephones, you make 500 million phones. There is no limitation to the benefits of scale.

Ben and James discuss the question of YouTube, why it’s similar and different from Facebook, and why engagement is both alluring and a potential problem.

Links

YouTube Executives Ignored Warnings, Letting Toxic Videos Run Rampant — Bloomberg
Ben Thompson: Apple’s Services Event — Stratechery
Ben Thompson: Mark Zuckerberg’s Proposal, The Copyright Directive and Sunk Costs — Stratechery Daily Update
Ben Thompson: YouTube and Toxic Videos, YouTube’s Problematic Incentives, Sins of Omission and Commission — Stratechery Daily Update
Ben Thompson: Friction — Stratechery
Ben Thompson: The Pollyannish Assumption — Stratechery
Ben Thompson: The Wall Street Journal and Apple News, The Problem with Regulating Content](https://stratechery.com/2019/the-wall-street-journal-and-apple-news-the-problem-with-regulating-content-australias-terrible-new-law/)