Apr 5, 2022 - Economy

America's internet is splitting along party lines

Illustration of two people playing tug-of-war with ethernet cables.

Shoshana Gordon/Axios

New investments flooding partisan media platforms are starting to restructure America's internet business around the nation's deepening political divide.

Why it matters: For years, internet theorists have warned of the "splinternet," a breakup of the global internet into regions governed by different rules and laws. Something like that is now starting to happen within the U.S., splitting the online world into red and blue sectors.

Driving the news: The Daily Wire, a conservative digital media company, is planning to invest "a minimum of $100 million" over the next three years in kids' entertainment as a direct response to Disney's opposition to Florida's recently passed "Don't Say Gay" bill.

  • The effort shows how even normally apolitical realms of media can get pulled into the partisan arena.
  • The Daily Wire has been at the forefront of building products that provide conservatives with alternatives to mainstream brands that they feel don't support their viewpoint, including movies and razors.

The big picture: Red and blue America have reacted to the current information environment in radically different ways.

  • Progressives are focused on making sure that the existing media and online platforms crack down on misinformation.
  • Conservatives increasingly feel disenfranchised by media from mainstream news outlets to social platforms and have begun to invest in alternatives.

What to watch: Billionaires are throwing ever-larger sums of money at both of these efforts.

  • Elon Musk on Monday disclosed a 9.2% stake in Twitter, worth roughly $3 billion, a few weeks after he polled his Twitter followers on Twitter's support for free speech and implied that the vote would have “consequences."
  • On the right, Donald Trump's new social network, which is struggling to launch, has reportedly raised $1 billion for its blank check IPO. Conservative tech billionaire Peter Thiel is backing a conservative rival to Facebook called Rumble and a conservative rival to Tinder called The Right Stuff. Conservative billionaire Rebekah Mercer co-founded and funded conservative Twitter alternative Parler.
  • On the left, billionaires Reid Hoffman, George Soros and others are backing a new public benefit corporation that aims to tackle disinformation by funding left-leaning local news sites. Other billionaires, like Jeff Bezos, Marc Benioff and Laurene Powell Jobs, have bought up venerable media properties.

Be smart: Media companies and online platforms in the past have thrived by serving as big an audience as possible without regard to political bent.

  • As the business model for internet media shifts toward direct relationships with paying customers, companies are placing less value on scale for its own sake and more on products that engage true believers.

Zoom out: Since the aftermath of the Jan. 6th Capitol riot when most internet companies de-platformed former President Trump, conservatives have been aggressively building out alternative communications infrastructure, including their own cloud storage and cryptocurrency companies.

The bottom line: As this trend continues, companies that have long positioned themselves as apolitical will face overwhelming pressure to choose sides.

  • For example, conservatives are now urging consumers to drop DirecTV, a satellite TV provider, in response to its decision not to renew its distribution contract with OAN, a conservative TV network.
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