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Lou Basenese on Truth Social’s Streaming Service
Lou Basenese, chief market strategist at Public Ventures LLC, recently shared his insights on Truth Social’s announcement of a streaming service in an interview with Quartz. The following is a transcript of their conversation.
Analysis of Truth Social’s Performance
Basenese began by expressing his skepticism regarding Truth Social’s outlook, likening the platform to rearranging “deck chairs on the Titanic.” He pointed out that social media platforms reliant on echo chambers face scalability challenges. Emphasizing the importance of network size and user engagement in the social media landscape, Basenese highlighted the sparse user base of Truth Social, estimated at around 10 million users. In contrast, he noted that former President Trump commands a significantly larger following on other platforms like Twitter. Basenese emphasized the necessity of a robust user base for sustained success in the social media industry, questioning the viability of Truth Social as a long-term investment.
Addressing the stock’s declining performance, Basenese dismissed the notion of Truth Social as a meme stock, indicating that the initial hype surrounding the platform had faded quickly. He cautioned investors against supporting the platform as a means of showing political allegiance, citing the lack of a compelling business case and a history of capital incineration since its inception. Basenese drew parallels to Reddit, another platform that struggles to monetize its user base effectively, casting doubt on Truth Social’s ability to generate sustainable revenue.
Evaluation of Truth Social’s Streaming Service
In response to Quartz’s query about the purpose behind Truth Social’s streaming service, Basenese speculated that the initiative might be driven by a desire for positive press coverage and temporary stock boosts. While acknowledging the platform’s good intentions, he underscored the challenges associated with executing ambitious projects. Comparing Truth Social’s approach to avoiding Big Tech dependence with its selection of Rumble as a video hosting platform, Basenese expressed skepticism about the streaming service’s potential for differentiation and audience attraction. Citing the platform’s history of tech implementation issues, including lengthy waitlists and compatibility concerns, he raised doubts about its ability to compete effectively in the streaming market.
Basenese further suggested that a shift towards video content could be aimed at enhancing advertiser appeal and revenue generation. However, he cautioned that without meaningful differentiation and improved technical capabilities, Truth Social’s streaming service might struggle to attract viewers and advertisers alike. Echoing his earlier sentiments on the platform’s fundamental weaknesses, Basenese emphasized the importance of economic indicators and a compelling investment case for potential investors, irrespective of their political affiliations.
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