Who Profits When Everyone Is Recording? (ft. Kyla Scanlon)

Jack Raines (0:00)

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Jack Raines (2:08)

Hi, it's Scott Galloway. We're back with Jack Raines, writer and investor who's joining us each Wednesday to unpack the big stories in money and tech and what it means for your life and your wallet. This week, smart glasses, Ozone cameras and the price of convenience. How much privacy are we giving up? And what happens when someone else makes that choice for us? Kyla Scanlon joins Jack to discuss.

Here's Jack.

Jack Raines (2:37)

Last week, I made a bold claim by stating, I like targeted ads. One listener called me, quote, a clown with a microphone. That's fair, but I stand by it. If I'm going to see ads, I would rather see ads for things that I actually want. But there's a difference between me giving a company my data and somebody else giving my data away for me. And that's the focus of today's show. How always on devices are eroding our consumer privacy. Essentially, when anyone can record you at anytime, what does privacy consent actually look like? And when does the convenience of the surveillance economy stop being worth the privacy we give up? Later, Kyla Scanlon joins me to talk about where we draw the line.

I'm Jack Raines, an investor at early stage venture capital fund Slow Ventures, writer of the sub-stack newsletter Young Money. In this show, we discuss how the biggest themes in Silicon Valley and Wall Street are impacting your life and your wallet.

Like I mentioned, I took a lot of heat last week for my apparently flaming take that I love advertising, and I'm a massive proponent of giving away all my data to big tech companies, so they can serve me better ads. The best benefit of targeted ads isn't just seeing better recommendations, it's that all of us benefit from a lot of free stuff or cheaper stuff that would otherwise cost a lot more money. Let's take Uber, for example. Yes, Uber's do seem to be a little bit overpriced now. I've also seen the price go up.

Uber's ad business probably keeps the prices lower than they otherwise would be. Uber does $2 billion a year in advertising revenue versus in 2025, they did $25 billion total in mobility revenue, which is the revenue from you and me riding Ubers. So close to 10% of that ride share revenue comes from ads. Ad revenue is much higher margin to serve than other mobility revenue because you don't have the labor cost of the driver. It's the marginal cost of serving another ad through the app is basically zero. But because Uber could be more profitable with ads, they can afford to charge you less money to take your Uber.

I like that my Uber is probably $15 cheaper to go to the airport because it's expensive enough to Uber to JFK.

Amazon's the same way. Marketplace Pulse had a great piece back in 2022 about how advertising was masking the fact that Amazon's retail business isn't really profitable. In 2021, Amazon's retail operations made $6.3 billion in operating income. But if you backed out advertising revenue, they would have had a $25 billion loss for the retail operations. Again, ads have zero or close to zero marginal costs, and most of that ad revenue is pure profit. In 2025, Amazon's ad revenue was about $69 billion, up 22% from the year before. Meanwhile, Amazon's operating income excluding Amazon Web Services was $34 billion.