Hey Youtube john Saarland here with a new nightcap today we got a good show for you.

First up, Tiktok is becoming a major source of news.

Then we look into the business of mr beast and last, what does the housing market look like when mortgages are more than 7% click on the chapters below.

When you think of Tiktok, you might think of viral video sketches, restaurant recommendations.

But now it's also becoming a growing source of news.

According to Pew 26% of Americans aged 18-29 regularly get news on Tiktok.

That's up from just 9% in 2020.

And Tiktok is growing as a new source as news, consumption falls on other social media platforms like twitter facebook and Youtube.

Meanwhile, as Tiktok remains a topic discussed in the halls of D.

C.

The chinese own platform is also facing questions about how it handles disinformation.

Here to discuss.

Is Taylor Lorenz technology columnist at the Washington post.

Taylor.

I don't think most people associate Tiktok with news.

Can you, can you explain what news on Tiktok looks like?

Yeah.

News on Tiktok usually takes the form of short form videos.

Uh It's content creators in all different areas, entertainment, fashion, um Politics and they create these short videos that describe the news of the day.

Often they pull up headlines behind them using the apps screen screen feature.

Um And news is a significant part of Tiktok.

I mean most of the content on Tiktok at least that I see has to do with some sort of current events.

You know whether it's pop culture news or hard news?

Um there's tons of discussion, let's talk about some other concerns, which is disinformation right there.

There continues to be a lot of focus on disinformation, on twitter on facebook, on Youtube.

We've seen that obviously for years now, according to a recent study from Global Witness in N Y U, that ranked social media platforms ability to detect and act against election misinformation, Tiktok came in last.

Do you think Tiktok is ready to become a major source of news and all the scrutiny that that entails?

I don't think Tiktok is necessarily ready for the news spotlight.

I think that they've taken great steps to actually not involve themselves in the news ecosystem.

I mean as far as I know, they don't even have a dedicated news partnerships manager and as you just mentioned, misinformation is rife on the app.

I mean you can basically go on Tiktok and just say anything and um a lot of times what people are saying is untrue and so, um I think it can be a very dangerous platform for information also because of how personal it is.

I mean, you watch somebody telling you something falls in a Tiktok video, it can feel very intimate often you're hearing it from a creator that you follow and really trust.

Um, and it's this really closeness of seeing the person's face, it almost feels like you're facetime with someone.

So, you know, it can be a very dangerous platform in that way when it comes to misinformation.

Do you think that Tiktok's emergence as a news platform will increase its scrutiny in D.

C.

Yeah, I definitely think that, you know, being perceived as a news platform is going to put them under more scrutiny.

I just find it so hilarious that they get all this scrutiny when facebook literally, you know, has played a key role in uh swaying, you know, different outcomes in our democracy.

Um and instagram remains this pervasive platform where there's also tons of, you know, disa information, misinformation and news content.

Um so I think if we want to take a look at our news ecosystem, we have to look beyond Tiktok Youtube as well, by the way, I mean, youtube is a huge source of news and information and we know that there's plenty of extremist Youtubers, Youtubers that are not responsible with news content.

So I think we need to look at this new media environment and and see that we live in this creator content, creator driven world and and think about that from a more systemic way.

I mean, we need to fix media literacy and things like that.

I don't know how much policing just one out of these many platforms is going to make a difference.

Next up Mr Beast, aka Jimmy Donaldson is a 24 year old who has become one of the most famous Youtubers with videos like this.

I recreated Willy Wonka's Chocolate Factory in real life and one of these 10 people is gonna walk away with this Chocolate factory.

There we go, wow!

Yo!

And with Youtube fame comes, Fortune Axios is reporting that Mr Beast is looking to raise $150 million from venture investors for his business.

That would peg mr Beast empire and roughly $1.5 billion.

So how did Mr Beast go from views to VCS here to discuss as Sarah fisher media reporter at Axios and brand new media analyst for CNN Sarah, you reported on this $1.5 billion what is he doing that's worth so much money?

Well, he's doing a lot.

I mean, first of all, his business has diversified a lot over the past few years, he started out making these very viral Youtube videos, like the one that you showed, which would make a ton of ad revenue.

Remember creators can take 55% cut in ad revenue from their videos, but in more recent months he's diversified.

He's now opened up a ghost kitchen business called Mr Beast burgers.

It also now has physical locations, He has his own snacks business called festivals and so I think when you're an investor looking at this business, what you see is at the top of the funnel of viral video empire that can bring people down to spend money on some of these retail and consumer packaged goods experiences now whether or not it's worth $1.5 billion.

That's the question.

Obviously, when you're valuing a company, you want to take a look at how fast it's growing its revenues and its profits.

Mr Beast hasn't fully disclosed his numbers, but he's given a few hints that suggests that they're making pretty good money.

So when people talk about Mr B's business, they highlight that he hasn't gone the traditional route of celebrity endorsements, he's launched his own companies like Beast burger and festivals zooming in.

Is that really different than the traditional endorsement models?

Is he really owning and operating these businesses?

He is really owning and operating these businesses and what's important to remember is that the way that his model is structured, he's taking the capital that he's making from some of his more lucrative businesses and pouring it back into grow the other franchises.

So, for example, when he does that Willy Wonka Chocolate Factory video for Youtube, you saw, you saw there was a feast of ALS tie in, right?

That's a marketing vehicle that's actually an investment for his snacks business.

And so yes, it is an independent venture that he's running and he's managing, but I think the reason he's raising money is because with this momentum, you want to capitalize on it and achieve real scale, and the way to do that is to get capital up front, especially, you know, we're heading into a little bit of a bear market so that you can grow these businesses really fast, You can obviously bring a return to your investors, but you can make this empire explode in a way off of Youtube in the similar way that it has on Youtube.

Do you have any idea what he's planning on doing with this cash, where does he expand to next?

You know what's next for?

Mr Beast?

I think the three pillars of his business, the core pillars right now are Mr Beast burgers, which is the ghost kitchen slash retail restaurant franchises, the Feast of als snack business, which I know he wants to expand out from just doing, you know, start out with chocolate bars now he's doing other things and then of course the Youtube business, which people think it's just his channel, that's not the case.

You know, he's one of the most followed, fifth most followed channel on Youtube In the world, but he also with 107 million followers, he also has channels worth 88 million followers that are affiliated with him that are not his main one.

And he has over 30 million followers across his Spanish language channels.

So I think those three pillars, the snacks business, the ghost kitchens and the video business are going to be where he's going to continue.

It's just at this point now about scaling those three efforts.

So, you know what with, with Youtubers, I think fans feel a deep personal connection that might not be there for, like, you know, an upcoming movie star or a singer.

It has this unvarnished connection with fans when from an investor's perspective, how valuable is that when they're looking at Mr B's business valuation.

So valuable words can't even describe.

Yesterday at an access event.

I was interviewing ESPN chairman jimmy petero and he said authenticity and access is so important for gen z, that's what they crave and that's what MR Beast delivers.

Not only are these videos authentic, right?

It's it's not him wearing a suit, it's him wearing his everyday clothes, it's him hanging out with his friends, he has the money now that he's able to bring viewers access to places to see.

Things that would never get to see you.

And I were talking about a video that he did on the most expensive hotel in the world versus the cheapest.

I was just watching it in the break time and you know, that's an interesting model because you're giving video viewers access to something they would never get to see in real life.

Who who do you know, that gets to stay in a million dollar hotel.

And so I think that this model of taking Youtubers that are super engaged with fans and scaling them is the next big investment and by the way, Mr Beast isn't the only one here, take a look at what candle media, the Disney former Disney execs holding company have done, you know, they put $3 billion into acquiring moon bunk Entertainment, which is the parent company to Coco melon.

That's also one of the biggest youtube franchises in the world.

And so I think you're gonna see investors pay a lot more attention to hot Youtubers as investments for other businesses down the line.

And last, the Federal Reserve is hiking interest rates to slow the economy and it appears to be working at least in one really noticeable place.

The housing market, the 30 year fixed mortgage just topped 7%.

That's a fresh 20 year high and sky high mortgage rates are starting to crush demand.

Let's bring in CNN's matt egan to discuss matt mortgage rates have more than doubled since the start of the year.

What is that doing to the housing market, john really is crushing the housing market.

And what's so interesting here is that this is a feature, not a bug of the Fed policy.

Right.

I mean, even the Fed realizes that the housing market was just flying way too close to the sun.

I mean, think about how hot this housing market was.

I mean, we had these relentless bidding wars, all cash offers.

Uh, and you, Some people buying homes before they ever even stepped foot in them.

And of course price spikes, none of that was sustainable.

Part of it was fueled in fact by dirt cheap borrowing costs from the Fed.

But as you mentioned now as the Fed has continued to raise interest rates to try to get inflation under control, mortgage rates just keep going higher.

The average 30 year fixed rate now it's 7.1%.

Uh that is the highest since 2002.

Now historically, if you really zoom out, it's not that high.

I mean I know when my parents bought a home in the early 80s, they actually paid twice that much, but that was the early 80s for the longest time, borrowing costs had been really low.

And this is a big deal because the higher rates go, the less home you can afford.

Let me show you what I mean.

If you look at a $250,000 home the cost your monthly payment is up by $477 from a year ago simply because mortgage rates have gone up on a half a million dollar home, you're paying more, you're paying a $953 more per month from a year ago.

Again, that is all because interest rates have gone up and it's important remember that that extra money, you know, it's not going to get you another bedroom or a man cave john that's really all money that's going to the bank and you can see why that is slowing down this housing market in a big way.

Yeah, I don't know what I would do without my man cave.

Thank you for mentioning that.

But I want to ask you about prices because mortgage rates have been going up for a while and we've seen sales slow but prices themselves haven't really come down.

Do you think we're going to start to see significant price drops in the housing market?

Well john you know home prices can't go down until they stop going straight up.

And so we have seen a cooling off.

S and P Case Shiller said that home prices nationally we're up by 13% year over year in august now that is a big jump.

But it is also a big slowdown because we were seeing 20% 21% gains in the spring.

It has cooled off in fact that slow down the deceleration between july and august, that is the biggest slowdown In history since SNP started looking at this in the mid 80s.

And if you do make it look at month to month, home prices actually have declined just a bit month over month.

And so I think the question is whether or not demand gets hit so much that it ends up actually causing prices to outright decline.

One of the reasons why we might not see major major declines is because supply is still pretty low and there is still a lot of pent up, man, there's just so many people who have been desperate to get get homes for the longest time.

Some of them might be sitting out there waiting on the sidelines for borrowing costs to come down there, waiting for home prices to come down, but they're probably not going away completely.

So there is still this pent up demand there, that's all from us.

Don't forget to sign up for the nightcap newsletter at CNN dot com slash nightcap, join us again next week at four p.m. Eastern right here at CNN Business.

Thanks for watching.