The Daily: What the hell is Bluesky, and how much of a threat is it to X and Threads?

On today's podcast episode, we discuss whether Bluesky can sustain this user growth momentum, how much of a threat it is to X (Twitter), and if in fact it is Threads that is actually about to snatch the microblogging crown. Tune in to the discussion with Senior Director of Podcasts and host Marcus Johnson, Senior Director of Briefings Jeremy Goldman, and Analyst Daniel Konstantinovic.

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Episode Transcript:

Daniel Konstantinovic (00:01):

They are also gaining a lot of the power users that are leaving X that once made Twitter such a valuable platform. Journalists, news platforms, a lot of them have left Twitter since the election and they're now coming to Bluesky.

Marcus Johnson (00:16):

Hey gang, it's Tuesday, December 3rd. Yes, Jeremy, Danny and listeners, welcome to the Behind the Numbers Daily. An [inaudible 00:00:30] podcast made possible by LiveRamp. I'm Marcus. Today I'm joined by two gents who I hung out with yesterday, I have the pleasure of hanging out with again today. We have with us Jeremy Goldman. He is our senior director of all things briefings. He's based in New York City. Coming to us from the studio again. Welcome back to the show, Jeremy.

Jeremy Goldman (00:49):

Happy Giving Tuesday.

Marcus Johnson (00:50):

Hello. We're also joined by our analyst who writes for our marketing advertising briefing. He is also based in the city and we refer to him of course as Daniel Konstantinovich.

Daniel Konstantinovic (01:00):

Okay. I wasn't sure if you were going to say something other than my name. We refer to him as, I don't know, office clown.

Marcus Johnson (01:05):

Not in front of your face, [inaudible 00:01:08].

Daniel Konstantinovic (01:07):

Yeah, yeah. Save that for after the recording.

Marcus Johnson (01:10):

Wouldn't dream of it. Today's fact, why is it called a Michelin star? Even if you know, it makes no sense.

Daniel Konstantinovic (01:18):

You know the big guy made out of tires?

Marcus Johnson (01:22):

I'm familiar.

Daniel Konstantinovic (01:22):

The Michelin man, he's a really big fan of the food.

Marcus Johnson (01:27):

Terrible joke aside, [inaudible 00:01:31] is right because the Michelin Tire Company did come up with it, which is insane. The founders of the famous Michelin Tire Company created the Michelin Guide in 1900.

Daniel Konstantinovic (01:39):

Oh wait, I didn't even know it was the same.

Marcus Johnson (01:42):

It's the same thing.

Daniel Konstantinovic (01:42):

I was just making a really bad joke.

Jeremy Goldman (01:44):

Oh, no, no, it really is, [inaudible 00:01:46]. Yeah, it's the Stay Puff marshmallow man.

Marcus Johnson (01:49):

Yep. They came up with it as a restaurant rating system where a star signifies a high quality dining experience. You get one, two, or three. And it was invented to encourage people to travel more by car.

Daniel Konstantinovic (02:00):

Interesting.

Marcus Johnson (02:00):

And help them find places to eat along the way. Any guesses on which country or city, I have both here, has the most Michelin stars?

Daniel Konstantinovic (02:09):

Ooh, maybe France.

Marcus Johnson (02:12):

Bang. Yes. France has the highest number of three star Michelin restaurants. At least three star ones, 30 of those. Followed by Japan with 20, Spain with 15 notes Kayla Zoo of Visual Capitalist, but the city with the most Michelin star restaurants, one, two, or three is Tokyo with nearly 200.

Daniel Konstantinovic (02:33):

Japan was going to be my other guess if I didn't say France.

Jeremy Goldman (02:35):

Marcus, I just looked this up. By the way, the most Michelin stars per capita, you would never guess ever, it's Luxembourg.

Marcus Johnson (02:43):

Oh, wow.

Daniel Konstantinovic (02:44):

Yeah, that makes sense.

Jeremy Goldman (02:44):

I just fun facted your fun fact. Boom.

Marcus Johnson (02:47):

You would need one and it would already be very small country, but it feels weird that a tire maker came up with the most esteemed and influential racing system in the culinary world.

Jeremy Goldman (02:58):

I have the biggest dad joke ever, which is that they were tired of picking the wrong restaurants.

Marcus Johnson (03:03):

Okay, moving on. Today's real topic, that's not going to make the joke.

Jeremy Goldman (03:06):

I'm leaving.

Marcus Johnson (03:06):

What the hell is Bluesky and how much of a threat is it to X and Threads, maybe? Bluesky is what we're talking about today. Maybe you use it, but what is it? Bluesky describes itself as social media as it should be. The X/Twitter alternative looks very similar, but one big difference is that Bluesky is decentralized, which means users can do things like customize their handle, moderation filters, they can customize the algorithm. There are over 50,000 different Bluesky feeds available. Tom Gerkin of the BBC explains that Bluesky was created by former Twitter founder Jack Dorsey, which began as a project inside Twitter but became an independent company in 2022 when Mr. Dorsey was still in charge of Twitter. Gail Cooper of CNET notes that the name ties into Twitter's bird mascot.

(03:59):

The idea being that the bird could fly even more freely in an open blue sky. Mr. Dorsey stepped down from the board of Bluesky in May 2024 and it is now predominantly owned by Chief Executive Jay Graber as a US Public Benefit corporation. The social platform has been around since 2019, but it was invitation only until February of this year. Bluesky saw a wave of new users following Mr. Trump's success in the US elections in November since X's owner, Mr. Musk was a big backer of Mr. Trump during the campaign. During his campaign, Bluesky had 21 million users as of November 21st. After adding a few million following the US election, it was at nine million in September. Danny, I'll start with you. Can Bluesky sustain this user growth momentum? It seems like it's adding, it's quoted as saying about a million per day since the election.

Daniel Konstantinovic (04:53):

Yeah, I think it can sustain it to some degree if it plays its hand well. The momentum after the election has lasted for a really long time for Bluesky. Momentum creates its own momentum. More users are coming to this platform especially who are burned by X as we talked about yesterday, and with more people coming, more interest is generated around the platform. People could continue to sign up. What levers can Bluesky pull to continue that growth I think is an interesting question.

Marcus Johnson (05:23):

Yeah.

Daniel Konstantinovic (05:24):

The platform does not have advertisements right now, which is something that's going for it and may be hesitant to turn on one because it didn't go so well for them at Twitter. Always struggled to generate ad revenues and I'm sure Dorsey is mindful of that. They are also gaining a lot of the power users that are leaving X that once made Twitter such a valuable platform. Journalists, news platforms, high interest public people, a lot of them have left Twitter since the election and just over the last two years in general. And they're now coming to Bluesky, which could also attract a lot of followers.

Marcus Johnson (06:02):

One group they don't have yet is the sports people, and that's a big draw for people on X. I was reading about this, this was a note from Freddie Najer, an associate professor at USC's Annenberg School for Communications and Journalism. He was saying many of the accounts that break sports news, Adam Schefter, Sham Sarania, Woj used to be before he retired, ESPN, Ian Rappaport of NFL Network and they're not yet on Bluesky. When they shift that could also, or if they shift, there could be a bit of a wave there as well.

Daniel Konstantinovic (06:34):

That's an interesting one that I think they're also in some competition with other platforms like Reddit for perhaps. One of the nicer ways to use Twitter was to have it open as a companion during some major event, whether it's a sports match or the election or the Oscars or something like that. And that service is splintered across a lot of these platforms. Reddit now has these live blogs on sports subreddits that are very popular and get a lot of activity. There are places for those users to go, if not Bluesky.

Marcus Johnson (06:34):

Yeah.

Jeremy Goldman (07:10):

But it is a very interesting point, Danny, I think that you bring up, which is that yes, people will cross post on a number of these platforms, but on the ones where it's very valuable to have people doing things like in a real time basis, if you get somebody like Shams who moves over to Bluesky and then that's the default place where they're going to break news and maybe they'll engage on X, but that's not their default place. That can obviously really benefit one platform. But I still fall on the side of realism, which is if you look at a platform that the visits have skyrocketed over 500% in the US and 350% in the UK in the week following the election. And if you look at all of these big numbers and then you couple it with the fact that X, according to some data that I've seen, saw that they had a 27% spike in downloads post-election and that's off of a much bigger base than Bluesky, right?

Daniel Konstantinovic (08:09):

True.

Jeremy Goldman (08:10):

The chasm between the platforms doesn't necessarily close all that much. I think that the default for every new social platform that becomes en vogue is for it not to fail or for it not to take over, right? We shouldn't assume that it's going to happen, but for marketers it's too important to not be aware of these types of moments when they do occur. You have to be really on top of it. You can't afford to say, I'll just wait to see if it explodes and stays dominant and then I'll get on to it two years from now. Because by that point, all of your competitors will understand that platform far better than you do.

Marcus Johnson (08:47):

I think you're spot on in terms of making sure that you're paying attention to what's new so that if it does take off, you have some comprehension of how that works and what the best strategy is. Let me throw this at you guys because I'm wondering though if this is the type of user growth that the platform wanted or that marketers advertising, if they were to advertise in the future on Bluesky, they said they don't want to do advertising, but maybe they will. If they're the type of users the platform once from an advertiser's perspective because it seems like the political divide is being further enhanced online. A couple of folks mentioning this, Sarah Fisher of Axios writing that "Left-leaning apps, news sites and social networks are experiencing a spike in engagement following President-elect Trump's election win, further dividing the internet along political lines."

(09:32):

Bruce Crumley of Inc was writing that "We're seeing the siloing of American's content choices, especially news. Bluesky's growth may signal progressive or independent people fleeing the increasingly hard right content of X for lower key often left-leaning posts." In other words, X may be crystallizing as a social media version of Fox News or Newsmax while Bluesky becomes a user-generated content variant of CNN or MSNBC. Whether those are fair comps or not, you can potentially see a bifurcation splitting of people on the right going this way. People on the left going this way and maybe advertisers saying, this isn't the centrist, independent type of platform that I want to advertise on.

Jeremy Goldman (10:13):

There's a few things there. One thing is that advertisers want to reach where the people are. If more people are in a particular place and if Bluesky can benefit from advertising, then they would be hard-pressed to say no to that forever. There was a time where OpenAI was a not-for-profit in general. There was also a time where Netflix did not want to have ads until the point that it ran out of subscriber growth without having an ad supported tier. Platforms often change their approach. I mean, I will say that there's some differences between your media consumption on cable TV versus where you interact from a social standpoint. People will be on multiple platforms, but they tend to over index a lot of their time on one particular platform or two that they make home. And there is a finite amount of time spent per day. It's harder and harder to get people to spend more and more time with media. Therefore, I would expect that ultimately there are going to be some winners. I don't think that it's going to be split evenly between Bluesky and X and Threads. People have to pick a home base.

Marcus Johnson (11:23):

It is interesting, Danny, there was another take from Kevin Reese of the New York Times saying that "Text-based social media is less dead than we thought," and that there's still plenty of demand for this social networking experience. It is interesting that the pivot was assumed to be that was going to go completely to video and there is more and more video popping up, but there is still, it seems some demand for text-based social media.

Daniel Konstantinovic (11:48):

Yeah, I think the fact that all of these competitors have cropped up and are gaining significant attention definitely speaks to the fact that users want something akin to the old Twitter experience.

Marcus Johnson (12:02):

Mm-hmm.

Daniel Konstantinovic (12:02):

To go back for a second to talk about user growth, and I guess this also fits in with demand for text-based media. There are a couple of big things standing in the way of Bluesky becoming this major prominent platform that maybe Twitter once was. I don't know if it has that potential. There was an interesting report from Pew Research recently that found that 21% of US adults get their news from news influencers or get some amount of news from news influencers, and 85% of those news influencers still have a presence on X. Despite the fact that these journalists and news outlets are leaving, common sources of news are still on X and if they don't make the migration over to Bluesky, maybe there's less potential there for growth. And then there's also Threads, which is something that I think we definitely have to mention in a conversation about Bluesky's potential growth 'cause it's a big question mark.

(13:01):

I mean they've managed to attract way, way, way more users than Bluesky has by virtue of linking it to Instagram, which is definitely a benefit that Threads had. If there was no Instagram and Threads was being spun up on its own, maybe it would have polls similar to Bluesky, but it doesn't exist in that vacuum. It's part of one of the biggest social media platforms out there. But then a differentiator for Threads is that they really are not prioritizing news content at all. If you want to see news content and political opinions on Threads, you have to opt in. It doesn't need that same news driving audience or news driving group of creators that X or Bluesky may need.

Jeremy Goldman (13:50):

That's a good point.

Marcus Johnson (13:51):

Yeah, Threads got a huge audience. I mean it could come out as the advertising winner I mean, if X is leaning, if it is leaning right, and there is some research to suggest that civic science saying that Trump voters much more likely to be active on X. If you do have folks on X leaning right and Bluesky, if it does end up doing advertising, potentially ends up leaning left, Threads preparing to debut ads in 2025 might seem like a more attractive, safer option as well as being part of the Meta ad buying ecosystem. That's not going to hurt it at all. Jeremy, how much of a threat is Bluesky to these other players do you think out of 10?

Jeremy Goldman (14:28):

That's a good point. I mean I think that maybe it's a five. I think that Meta has gotten very good over the last few years at looking at any perceived threat and just to be safe, trying to figure out how they can take certain ideas from them. The perfect example of which is these different custom feeds that you can follow on Threads, which is basically a feature of Bluesky. By the way, it should be noted Bluesky largely copies old-timey Twitter. Everybody does borrow from everybody else. But if you're big enough so that people can copy your functionality or are concerned enough, then I would say they're on the map. I just think that ultimately it's Meta's to lose, it's X's to lose. They have to really basically be outperformed to an enormous magnitude from a company that only has about 20 employees. And that's a really tall order.

Marcus Johnson (15:28):

Mm-hmm. Danny, out of 10, how much of a threat is Bluesky?

Daniel Konstantinovic (15:31):

I'm going to give it a pretty low rating. I'm going to give it like a three because X has the users to shed that Bluesky needs in order to grow. Its user growth depends on some level on X's decline, which to be fair, we do expect users to decline on X pretty steadily over the next few years, but Instagram and Threads are really insulated from that threat. The rise of Bluesky does not really challenge Threads all that much, even though we have seen them respond to Bluesky's big post-election surge with features like the topic-based feeds that Jeremy brought up. But another issue is that since Bluesky doesn't have advertising right now, and they've said that they don't plan to at the moment, though of course that may change, they're not competing for the same pool of ad dollars that Threads and X are competing for either. Even if Bluesky attracts several million more users and those users all stay as active on the platform as they are after signing up, it's not like they're shedding a huge amount of revenues to Bluesky because there's no ads there.

Marcus Johnson (16:48):

Yeah, it's a good point. If we look at Bluesky, they have way less users as we've mentioned. X has 360 million monthly active users worldwide according to our forecasts. Meta's X competitor Threads that we've been talking about has about 275 million users. That's up from 200 million in August. Bluesky by comparison has 17, one seven, million.

Daniel Konstantinovic (17:11):

I think those numbers are really important to frame this rise of Bluesky. Bluesky has been around since not that long after Musk first acquired Twitter and it's just now having this big surge that it perhaps wanted earlier on. Yeah, it's far, far behind.

Marcus Johnson (17:28):

Been in the works for a while, but only open to the public since February of this year. Yeah, still very, very, very new. But to your point, ex-Twitter users, they are going in the wrong direction and pretty fast. We expect Twitter to lose 10 million users worldwide next year and another 10 million the year after that. They do have them to lose, that number is going down in the US though. Eventually that's going to become an issue. Maybe not quite yet, but that's what we've got time for for today's episode. Thank you so much to my guests for hanging out with me today and also spending some time with me on yesterday's episode about Twitter, about X. Thank you to Jeremy.

Jeremy Goldman (18:05):

Thanks so much for having us, Marcus. This was great.

Marcus Johnson (18:07):

Yes, thank you to Danny.

Daniel Konstantinovic (18:09):

Thank you. Yeah. I'll see you on Bluesky or Threads or X.

Jeremy Goldman (18:14):

Or all of the above.

Daniel Konstantinovic (18:15):

Yeah. We'll see.

Marcus Johnson (18:17):

Thank you to Victoria who edits the show. Stuart runs the team, Sophie does our social media. Thanks to everyone for listening into the Behind The Numbers Daily, [inaudible 00:18:23] podcast made possible by LiveRamp. Tomorrow you can hang out with Sarah Lebow on the Reimagining Retail Show where she'll be speaking with Sky Canavus and Jeremy Goldman who is hanging out with us today, all about how retailers can capitalize on New Year's resolutions.

Jeremy Goldman (18:42):

Okay. A lot of money. Boom. I'm going to buy a flight with Blue Origin and then just orbit the world and the snail can't get me.

Marcus Johnson (18:50):

Can I live in Orbit the whole time?

Jeremy Goldman (18:52):

Sounds like the snail won.

Marcus Johnson (18:53):

Snails are honest. It's violent, but they're not corrupt.

Jeremy Goldman (18:56):

Exactly.

Marcus Johnson (18:56):

There's no way they take any of that money. Apparently it'll kill you, but I think they're clean.