The Genius? of Silicon Valley?

Foer

Here’s a review of Franklin Foer’s new book, World Without Mind: The Existential Threat of Big Tech. What we’re seeing here is the slow breaking of the next wave of tech, from Web 2.0 to Web 3.0, where the users take back control and are treated as more than mindless sources of data. It took a long time to transition the world out of feudalism and we’re still in the very early stages of throwing off the yolk of data exploitation and tyranny. Algorithms cannot guide humanity.

The genius and stupidity of Silicon Valley

Knowledge is a tricky thing.

Acquiring and deploying it to change the world through technological innovations can inspire great confidence and self-certainty in the person who possesses the knowledge. And yet, the confidence and self-certainty is nearly always misplaced — a product of the knower presuming that his expert knowledge of one aspect of reality applies equally to others. That’s one powerful reason why myths about the place of knowledge in human life so often teach lessons about hubris and its dire social, cultural, and political consequences.

Franklin Foer’s important new book, World Without Mind: The Existential Threat of Big Tech, is best seen as a modern-day journalistic retelling of one of those old cautionary tales about human folly. Though he doesn’t describe his aim in quite this way, Foer sets out to expose the foolishness and arrogance that permeates the culture of Silicon Valley and that through its wondrous technological innovations threatens unintentionally to wreck civilizational havoc on us all.

It’s undeniable that Silicon Valley’s greatest innovators know an awful lot. Google is an incredibly powerful tool for organizing information — one to which no previous generation of human beings could have imagined having easy and free access, let alone devising from scratch, as Larry Page and Sergey Brin managed to do. The same goes for Facebook, which Mark Zuckerberg famously created in his Harvard dorm room and has become a global powerhouse in a little more than a decade, turning him into one of the world’s richest men and revolutionizing the way some two billion people around the world consume information and interact with each other.

That’s power. That’s knowledge.

But knowledge of what?

Mostly of how to program computers and deploy algorithms to sort through, organize, cluster, rank, and order vast quantities of data. In the case of Facebook, Zuckerberg obviously also understood something simple but important about how human beings might enjoy interacting online. That’s not nothing. Actually, it’s a lot. An enormous amount. But it’s not everything — or anything remotely close to what Silicon Valley’s greatest innovators think it is.

When it comes to human beings — what motivates them, how they interact socially, to what end they organize politically — figures like Page and Zuckerberg know very little. Almost nothing, in fact. And that ignorance has enormous consequences for us all.

You can see the terrible problems of this hubris in the enormously sweeping ambitions of the titans of technology. Page, for instance, seeks to achieve immortality.

Foer explains how Page absorbed ideas from countercultural guru Stewart Brand, futurist Ray Kurzweil, and others to devise a quasi-eschatological vision for Google as a laboratory for artificial intelligence that might one day make it possible for humanity to transcend human limitations altogether, eliminating scarcity, merging with machines, and finally triumphing over mortality itself. Foer traces the roots of this utopianism back to Descartes’ model of human subjectivity, which pictures a spiritual mind encased within and controlling an (in principle, separable) mechanical body. If this is an accurate representation of the mind’s relation to its bodily host, then why not seek to develop technology that would make it possible to deposit this mind, like so much software, into a much more durable and infinitely repairable and improvable computer? In the process, these devices would be transformed into what Kurzweil has dubbed “spiritual machines” that could, in principle, enable individuals to live on and preserve their identities forever.

The problem with such utopian visions and extravagant hopes is not that they will outstrip our technological prowess. For all I know, the company that almost instantly gathers and ranks information from billions of websites for roughly 40,000 searches every second will some day, perhaps soon, develop the technical capacity to transfer the content of a human mind into a computer network.

The problem with such a goal is that in succeeding it will inevitably fail. As anyone who reflects on the issue with any care, depth, and rigor comes to understand, the Cartesian vision of the mind is a fiction, a fairy tale. Our experience of being alive, of being-in-the-world, is thoroughly permeated and shaped by the sensations, needs, desires, and fears that come to us by the way of our bodies, just as our opinions of right and wrong, better and worse, noble and base, and just and unjust are formed by rudimentary reflections on our own good, which is always wrapped up with our perception of the good of our physical bodies.

Even if it were possible to transfer our minds — our memories, the content of our thoughts — into a machine, the indelible texture of conscious human experience would be flattened beyond recognition. Without a body and its needs, desires, vulnerabilities, and fear of injury and death, we would no longer experience a world of meaning, gravity, concern, and care — for ourselves or others. Which also means that Page’s own relentless drive to innovate technologically — which may well be the single attribute that most distinguishes him as an individual — would vanish without a trace the moment he realized his goal of using technological innovations to achieve immortality.

An immortal Larry Page would no longer be Larry Page.

Zuckerberg’s very different effort to overcome human limits displays a similar obliviousness to the character of human experience, in this case political life — and it ends with a similar paradox.

Rather than simply providing Facebook’s users with a platform for socializing and sharing photos, Zuckerberg’s company has developed intricate algorithms for distributing information in each user’s “news feed,” turning it into a “personalized newspaper,” with the content (including advertisements) precisely calibrated to his or her particular interests, tastes, opinions, and commitments. The idea was to build community and bring people together through the sharing and dissemination of information. The result has been close to the opposite.

As Facebook’s algorithms have become more sophisticated, they have gotten better and better at giving users information that resembles information they have previously liked or shared with their friends. That has produced an astonishing degree of reinforcement of pre-existing habits and opinions. If you’re a liberal, you’re now likely only to see liberal opinions on Facebook. If you’re conservative, you’ll only see conservative opinions. And if you’re inclined to give credence to conspiracy theories, you’ll see plenty of those.

And maybe not just if you favor conspiracy theories. As we’ve learned since the 2016 election, it’s possible for outside actors (like foreign intelligence services, for example) to game the system by promoting or sponsoring fake or inflammatory stories that get disseminated and promoted among like-minded or sympathetic segments of the electorate.

Facebook may be the most effective echo chamber ever devised, precisely because there’s potentially a personalized chamber for every single person on the planet.

What began with a hope of bringing the country and the world together has in a little over a decade become one of the most potent sources of division in a deeply divided time.

And on it goes, with each company and technology platform producing its own graveyards full of unintended consequences. Facebook disseminates journalism widely but ends up promoting vacuous and sometimes politically pernicious clickbait. Google works to make information (including the content of books) freely available to all but in the process dismantles the infrastructure that was constructed to make it possible for people to write for a living. Twitter gives a megaphone to everyone who opens an account but ends up amplifying the voice of a demagogue-charlatan above everyone else, helping to propel him all the way to the White House.

Foer ends his book on an optimistic note, offering practical suggestions for pushing back against the ideological and technological influence of Silicon Valley on our lives. Most of them are worthwhile. But the lesson I took from the book is that the challenge we face may defy any simple solution. It’s a product, after all, of the age-old human temptation toward arrogance or pride — only now inflated by the magnitude of our undeniable technological achievements. How difficult it must be for our techno-visionaries to accept that they know far less than they’d like to believe.

What’s An Artist To Do?

Below is a recent op-ed printed in the Washington Post regarding the state of affairs for streaming music content. Mr. Fakir makes many legitimate points, as there’s no valid reason for streaming services not to have to pay royalties on music recorded before 1972. However, while copyright law is important for aging or retired artists who rely on performance royalties, the long-term problem for creative digital content is far more intractable.

The true problem for professional artists is that the supply of content has exploded while the price has collapsed. This is basic economics: when supply increases faster than demand, prices must fall. The explosion of supply is due to digital technology, which has caused production and distribution costs to plunge almost to zero. Now everybody and anybody can release music on Apple or publish books on Amazon or take thousands of digital photos on their phones.

So the real problem is too much content, reducing the market price while increasing the search costs for consumers. Plunging revenues have also hollowed out the promotion and marketing industries that serve creative content. So now artists not only create, they have to promote and distribute, paying with precious time or money for vendor services upfront. This is a Catch-22 for struggling artists – they have no money unless they sell product and yet can’t sell product unless they spend first on promotion. Meanwhile, digital distribution is monopolized by the big tech companies like Google, Apple, Facebook, and Amazon (GAFA).

Solutions?

  • First, technology offers the next disruption. Creative industries need on online clearinghouse for content that is curated by the network of creators, curators, and consumers. Think Facebook for content only.
  • Second, GAFA does not make the bulk of their revenues from content sales, but rather from the monetization of the data that flows through their networks. A network of creators, curators, and consumers need technology tools to build, manage, and monetize their personal peer networks. Blockchain technology offers the possibility of constructing such a distributed network for sharing content. Essentially, this is what the big tech servers do with our information data.

In sum, what we face is a globalized niche market where the main problem is less about price and getting paid and more about connecting creators with consumers to build new sources of value. (Note: even sharing free content creates data network value, like on Facebook.)  New developments in technology can help us recapture and reinvigorate “the culture industry,” where we take back control of our creative content so we can reap the value we create and sustain a thriving creative ecosystem together.

We’re ripping off some of the best musicians of the last century. It needs to stop.

 December 28, 2017

Duke Fakir is a founding member of the Four Tops and a member of the Rock and Roll Hall of Fame.

I’m a lucky man. I’ve been a performer and recording artist for most of my life. As a founding member of the Four Tops, I’ve been blessed to travel the world making music with my dearest friends, and we’ve seen our records hit the top of the charts. It’s a privilege I’ve never taken for granted, and I’m proud to say that our music has stood the test of time.

I’m also an activist who has spent years fighting to change laws that exploit artists. Our copyright system does not always provide fair compensation for performers and musicians, and I know that not everyone has been as fortunate as I have.

My fellow artists and I have argued for economic justice and fairness for so long, it can feel like the same empty answers keep coming around, and you never really get to anywhere new. And “the same old song” just isn’t good enough anymore.

That makes this moment critical. After years of “hurry up and wait” in Washington, powerful forces in Congress are attempting to fix one of the worst abuses faced by older artists: the “digital rip-off” of all recordings made before 1972.

Right now, digital radio stations such as SiriusXM and iHeartRadio pay royalties to artists for most of the music they play. It’s real money: Digital streams make up half of all music business revenue, pushing $4 billion a year. A lot of that money goes to independent artists, backup singers, session players, and sidemen — including a generation of lost greats who may have played a lot but didn’t get paid a lot. It’s money these folks count on to pay rent, buy groceries, cover medical bills and support their families.

But there’s a catch: Those same stations don’t pay royalties on music recorded before 1972 — not because it’s right or fair or the music is any less valuable. After all, we’re talking about some of the most iconic music ever recorded. But because federal copyright law doesn’t cover recorded music before 1972, some of the huge services that play music from the ’40s, ’50s, ’60s and early ’70s have managed to get away with this inequity, daring anyone who disagrees to sue. Songwriters and music publishers may be getting paid — as well they should! — but the artists and the owners of the sound recordings are not.

This digital rip-off has been a disaster for many older artists, diverting the fruits of their labors — funds that should be their lifeline — to the balance sheets of some of the wealthiest companies in the world. Digital radio earns millions every year from the exploitation of pre-’72 music, from big band to Motown to the British Invasion. Yet artists who recorded those classics — many of whom are no longer able to tour — struggle for basic food, shelter, and medical care. It’s ridiculous, it’s unfair, and it’s about time we make it illegal.

Change is long overdue, but a chance to right this wrong is at hand. A bipartisan new bill called the Classics Act is moving quickly through Congress. The bill would require digital radio to treat all music the same, regardless of when it was recorded, ensuring that the same royalties are paid for older songs as for new material. It would open a world-changing lifeline for musicians from back in the day — bringing basic economic fairness to this key corner of the music world.

Don’t get me wrong — like most artists, I love radio, in all its forms. We’re proud that listeners want to hear our music, and we’re always happy to work with our colleagues to support their platforms, to help promote what they do and to connect with them and their music-loving customers. All we want is to be paid fairly.

We’ve been stuck for a long time in the fight for fairness for music creators. And the Classics Act isn’t the end of the road. We need to finally ensure the payment of a fair performance royalty for terrestrial radio and close the loopholes that allow big tech companies to collect huge profits while paying next to nothing for music.

A great piece of music should earn its fair share, whether it was recorded in 2002 or 1962. And right now, this is a problem that Congress has a chance to fix. In the meantime, I’ll keep singing. And I’ll keep fighting for what’s right. “I can’t help myself!”

Link to article

 

Create – Share – Connect

Below is a sample of Facebook comments for a FB community group  called Musicians Unite. They posed the question above, “Why do you play music??” These are some of the hundreds of answers they received. It all pretty much boils down to the same thing.

Was there ever any doubt? tuka

Top Comments

52 Shares

‪Tracy A. Gaynor‪ It’s inside of me. A force of its own. I started playing piano at the age of five. It’s its own entity within me. Just as I breathe, need water and sustenance, I need music. I play music because it is my very soul.

‪Russell M Price‪ We musicians have a need to do it as well as a love for it. We don’t think  regular people. Our outlook on the world is definitely different. Plus we look cool when we’re on stage. lol

‪John Payne‪ I do it because the constant melodies in my head have to get out somehow . Players know what I am talking about, so do their wives or girlfriends. besides what else could I do with four sets of drums.

‪Robert Bryant‪ Because I have to. ‪Not for money or applause or recognition or anything  that. Just for the pure enjoyment I get out of playing and singing. If i couldn’t sing and play I don’t know what I would do.

‪Corey Shockey‪ I have to create. Music, my woodshop, or whatever. I just love the process of making something out of nothing. If others enjoy my work, great. If not, at least I enjoyed the process of making it happen.

‪Eric Hachey‪ I started loving music when i was 4 i then got a guitar and learned to play sing and write i found out that it brang people together and they danced sang and were happy i still play and I’m 60 next month music is magical life force

‪Graham Byrne‪ it keeps me sane,focused,gives me confidence,stops the bouts of depression,makes me smile,blanks out all the negative people/things in this world,and because my granddad and all the beautiful music that’s inspired me .. oh and because I’m not a great cook or cleaner ‪:)

‪Stanley E. Supranowicz Jr.‪ At first, I had a burning desire to just rock, honestly. Had no illusions of being a rock star. After a while, it became second nature, and I honestly feel I have something to say, and a unique perspective on some things.

‪Steve Barlow‪ My whole life I’ve loved music more than anything, it is the most powerfull force on Earth, and it subconsciously unites strangers.

‪Jonathan Baker‪ Often times I am able to shut out all my problems and escape into a world of sound waves where I can reflect on my life from another perspective. When I write a song it just comes out and I don’t understand it’s meaning until some time later when I play it back and I learn the meaning of my own song.

‪Ron Reed‪ Because I love to play. Started playing at eleven, in school. Trombone, tuba, baritone. After school I learned guitar, then drums. Now I play bass, have been for nearly thirty years. I couldn’t imagine life without playing.

‪Glenn Basil II‪ Becuz it was meant to be, long before I picked up an instrument I’d sing and write lyrics, it just evolved naturally, but then being able to play well enuff to entertain ppl is the real reward, its such a great feeling being able to help ppl forget about their problems and life and just Groove! With or without an audience I’ll always play, I have to. But I was born to play AND entertain!

‪Scott Cardone‪ So many reasons. Pure enjoyment, the once every ten years or so, I give myself the goosebumps , but most of all, it’s the great escape from the reality’s of Life…‪plus it’s an addiction

‪Mark Bertini‪ The story goes I was dancing in the crib before so could walk, whistling before I could talk. Music chose me I didn’t choose music. We have a symbiotic relationship and it runs in my blood and family history.

‪Gary Edmisten‪ Because I can. Plus it helps a great deal that I was born with it in my blood. I am a third generation musician and have always been so grateful to have come from a musically inclined family. Without music I probably would have never amounted to much of anything.

‪Theo Sanders‪ Because it brings joy to others (maybe some pain also when I play as I’m still learning) but it makes me happy also and you get to meet some awesome people. Most of my best friends were made through music. Also it reduces the risks of dementia as it is in my family history. It’s the only activity that requires you to use both sides of your brain.

‪Travis-John Wingert‪ Music is my attempt to externalize representations of my contradictionary life. Music is tactile, but also ephemeral, or abstract, and this allows it to tap straight into the paradox of our minds, foregoing cognitive dissonance. Music is the most influ…See More

‪Bryan Ferguson‪ I’ve asked myself this question so many times, but it’s a passion, if you get paid what you should, it’s great, but an appreciative audience gives you lots back as well, when you can connect with people through music, it is a beautiful thing….I’ve h…See More

‪Emilie Scanlon‪ Because at this point, I can’t live without it. It’s been the core of my life for so long. If I lost my ability to play and to sing, I would lose all reason to live.

‪Brian Lehnert‪ So I don’t kill myself also when your band clicks  that shiver down your spine can’t help but smile  and idiot kind of shit that’s the actual best feeling in the world I’ve never been happier than in those moments

‪Steve Bloom‪ This is why we use a subtle mantra in meditation. Sound is our deepest more easy path to the universal Unified Field of pure energy and consciousness.

‪Isaiah Scott‪ When I see everyone’s shining eyes and joy when I perform, whether classical or rock music, it gives me meaning (especially when I see little kids get sooo excited and sing and dance). I live to play music.

‪Mark Johns‪ You might as well ask why do I breathe because I have to music is ever much a part of my life as eating and breathing

‪Nosforotu Poet‪ No simple answer. The music is a driving force to compliment my poetry and art all are which come from the core of my soul. I need it just  breathing in physical the arts are breathing for my soul.

‪Matthew Downey‪ There isn’t anything else worth doing. And if i didn’t i would probably perish. When i don’t play at least a little i feel physically ill.

‪Al Urezzio‪ At the age of 8 yrs old it created a feeling inside my heart & soul .. so now after 59 yrs , its a way of life .. never to change ..

‪Ernest McDaniel‪ That’s  asking my why I breathe. Music is life. Without music there would be no life. Music is what connects you to your soul and gives you an outlet to express it. Music is the best therapy of all time.

‪Tom Maillie‪ My grandfather had a band and I have memories being mesmerized by watching them play as early as 5 or 6 years old. I knew then that playing music was something I wanted to do.

‪David Kaminester‪ Because I have a burning need to. It’s as simple as that. I have melodies in my head all the time. It would drive me crazy not to dispel that energy.

‪Chet Santia III‪ As a quasi introverted person playing music and performing are what helped me to connect the music became my voice, literally and figuratively! It gave me a voice!

‪Chris Williams‪ I do it because it’s a great way to express feelings and I’m just driven to the art of it and most recently I use it to express praise for God.

‪Ronnie Houston‪ It’s my drug of choice, my medicine. Thanking the creator endowing me with musical skills and creativity, and the ability to use them.

‪Devin Kimmel‪ Because it has become a part of me. It’s the most personal language to speak, and without it, I would have died a long time ago.

‪Claudine Langille‪ Music has always been the center of my universe, and I was really surprised when I got older and learned not everyone is wired that way!

‪André Cruz Glennhammar‪ I know it’s a very typical thing to say, but I didn’t choose to, music just opened my eyes to everything this world has to offer.

‪Ed McCoy‪ Because it’s fun! When you improve to the point where you can play most anything you hear, it’s really a blast!

‪Mark Alaniz‪ If you are given a gift,it should be shared.A song can take you places you might not otherwise be able to go to.

‪Jim Wilbanks‪ I play at church .it is my way of saying thank you to god for my life .family and so on .giving back to him .

‪Tammy Mitchell-Woods‪ I dont have a choice..i cant and wouldnt wnt to be able to separate from it…its a part of me…i HAVE to play

‪Ken Medlock‪ I guess God made me that way. Must be, because I have been involved for 40 + yrs. w/o any former music education ever.

‪Rob Gregson‪ For extra income but if i was doing it full time I’d be homeless an starving lol it’s fun tho an for my on needs

‪Jo Douglass‪ Play. = enjoyment/pleasure derived from a certain activity..why doesn’t everyone music the same way? we are all different notes on the same page? we could wank on for days! **guitarists joke

‪Jerome Blaha‪ …for fun and mental health–

‪Mike Dattilo‪ If I didn’t, I would be dead inside…

‪Isaiah Kavanamur‪ Anyone play music to lose themselves just for a bit

‪James Salisbury‪ Because I love it and because it’s my therapy lol

‪John Billigen‪ For life and to thank the Almighty for blessing me with this TALENT

‪Katie Kayhaos‪ That’s  someone asking me why I breathe..

‪Courtney Daisey‪ Music is who I am. Without music, my soul would be an empty shell, a mere shadow of my true self.

‪Tim Starace‪ I do it for the free pitchers of diet coke…

‪Adam Jago‪ To Escape this cold cold world. And the monster inside me won’t let me think about anything else!

‪Marion Shepherd‪ Music is apart of me I can’t help myself.

‪Steven Militare‪ It is a large part of my soul.

‪Gary Fairbanks‪ It’s a part of who you are!

‪Don Kumpula‪ It’s who I am. To not play isnt even an option.

‪Josh Murrow‪ Simple. So I don’t hit people. I hit the skins. The best release. Both physically and mentally. Just the best release.

‪Jimmy Paul‪ I quote the great Tobiah Hale

‪“I’m just too dumb to quit!!”

‪Larry Johnson‪ Because one day I’ll be a rock star

‪Randall Wilson‪ Because it was bred in my blood !!!!!!

‪Dellwood Washington‪ Music is a part of my life that came with me when I came in this world

‪Jesse Smith‪ Because God gave me the talent to do so.

‪Alberto Pabon‪ Cause the Lord blessed me to do so. I owe it all to him.

‪Hideaki Yamakado‪ Because When I play music, I feel happy. Music makes my life better.

‪Kearon Andrew O’Brien‪ Love the sound of guitar. When l play it makes me feel famous. lol ‪Music is fun

‪Mike Ceely‪ music soothes the savage beast in me .it is the beat a my life

‪DScott Lloyd‪ It’s when I feel the most…. myself. …if that makes sense.

‪Rick Williamson‪ It’s instant gratification and allows me to leave the ground behind.

‪Dalton Mitchell‪ To let out the mean shit talking , anti-establishment but positive empath within.

‪Tom Humpston‪ Because I can’t NOT play music. It’s as much a part of me as breathing.

‪Thomas Hopper‪ I have no idea, I just do.

‪Charles Buie‪ Can’t help it. It’s inside me and wants to come out.

‪Rick Huff‪ I was born with that stuff. Can’t explain it. Just came naturally

‪William Graham Harper‪ To pass on a little love to my fellow man !!!

‪Peter S. Sportino‪ I love it! That it in a nutshell. There is no complicated explaination. That’s it!

‪James Keith Webb‪ That easy I love music it moves my soul!!!!!

Read the book and harness the power!

Streaming Content and Trickling $$$

 

How Much Does YouTube Pay? We Asked Nicki Jaine of Revue Noir.

Nicki Jaine of Revue Noir

My Song Got 1.254 Million Views on YouTube. I Got Paid $42.56  [Link]

How much does YouTube really pay?  A top executive at the company claims a $3 CPM.  But most of the royalty payments shared with Digital Music News are a tiny fraction of that.

We want to believe YouTube executive Lyor Cohen when he says YouTube pays a $3 CPM to artists.  The only problem is that there’s zero evidence to support his claims.

And lots of evidence that artists are earning an infinitesimal fraction of that amount.

The latest proof comes from Nicki Jaine, one half of the duo Revue Noir.  That group is signed to Projekt, who shared the royalty breakdown with Digital Music News.

(Quick aside: in online advertising land, ‘CPM’ stands for ‘cost per thousand’.  It’s a calculation of how much gets paid for every 1,000 views.  So, a ‘$3 CPM’ means you get paid $3 every 1,000 plays.  That is, assuming those 1,000 plays had ads on them, which is another story entirely.)

Here’s a quick snapshot of those royalty payments from various streaming services.  Keep in mind that these copyrights are 100% controlled, meaning that all publishing and all recording royalties are reflected in this breakdown.

As you can see, a lion’s share of Revue Noir’s payments are coming from free, ad-supported YouTube plays.

Despite 1,254,626 streams on the free platform, Revue Noir only earned $42.56.

Other streaming platforms are clearly paying better, but this group’s largest audience is on YouTube.  Strangely, YouTube Red’s payments are far higher, but barely anyone is paying for Red.  (The premium service was initially called ‘Music Key,’ and apparently not updated in this royalty statement).

Other platforms like Rhapsody, Tidal, and Spotify pay far better.  But the group hasn’t been able to secure favorable playlist inclusion or amass a serious audience on those platforms.  At least not yet.  So it basically sucks to be them right now.

As a result, the group earned about $130 in total from nearly 1.3 million streaming plays.

In terms of the YouTube CPM calculation, that boils down to a 3.34 cent CPM.  Which is about 1/88th the $3 CPM claimed by executives like Lyor Cohen.

Projekt CEO Sam Rosenthal is obviously disappointed with this result.  “Spotify has 1.3% of the plays of YouTube, and yet it generates 40% more money,” Rosenthal told DMN.

“Well — that’s shitty!”

Rosenthal was also careful to clarify that this is a 100% copyright-owned composition.  Meaning, all the revenues are reflected in this statement.

“And because somebody will say, ‘Oh, that’s because the label is screwing the artist out of their fair share’:

(1) I am the label
(2) The numbers above are the raw data from my digital distributor, before anyone takes their cut!”

The sad payout is even worse than a detailed breakdown we received in August.  That YouTube statement showed an artist making 1/50th the rate claimed by YouTube and Cohen.

All of which is seriously eroding the credibility of executives like Cohen, and YouTube more broadly.

Unsurprisingly, the music industry is strategizing ways to minimize YouTube’s power over artists.

Just recently, Republic Records-signed rapper Post Malone decided to withhold his latest single from the video platform.  Instead, Malone uploaded a looping chorus of his track ‘rockstar,’ while directing fans to check out the full song on other platforms.

Malone’s little idea worked.  So far, the song has more than 50 million plays on YouTube — and more than 150 million on Spotify.  Other platforms like Apple Music were also prominently featured as redirect options, leading to millions in diverted royalties.

Post Malone is easily one of the biggest rappers in the world right now.  That makes this a noteworthy experiment, and one that could start a trend among other artists eager to divert fans to better-paying platforms.

Separately, a number of companies are also assisting artists to realize revenues elsewhere.  That includes upstarts like Flattr, Songtradr, and Patreon, all of whom are focusing on dramatically improving artist incomes.

[Blogger’s Note: The exact same thing is happening with Kindle authors on Amazon who enroll their ebooks in the Kindle Online Lending Library. Subscriptions accumulate to Amazon, royalties trickle to authors.]

Vampire Squids?

 

likenolike

I would say this essay by Franklin Foer is a bit alarmist, though his book is worth reading and taking to heart. We are gradually becoming aware of the value of our personal data and I expect consumers will soon figure out how to demand a fair share of that value, else they will withdraw.

Technology is most often disrupted by newer technology that better serves the needs of users. For Web 2.0 business models, our free data is their lifeblood and soon we may be able to cut them off. Many hope that’s where Web 3.0 is going.

tuka is a technology model that seeks to do exactly that for creative content providers, their audiences, and promoter/fans.

How Silicon Valley is erasing your individuality

Washington Post, September 8, 2017

 

Franklin Foer is author of “World Without Mind: The Existential Threat of Big Tech,” from which this essay is adapted.

Until recently, it was easy to define our most widely known corporations. Any third-grader could describe their essence. Exxon sells gas; McDonald’s makes hamburgers; Walmart is a place to buy stuff. This is no longer so. Today’s ascendant monopolies aspire to encompass all of existence. Google derives from googol, a number (1 followed by 100 zeros) that mathematicians use as shorthand for unimaginably large quantities. Larry Page and Sergey Brin founded Google with the mission of organizing all knowledge, but that proved too narrow. They now aim to build driverless cars, manufacture phones and conquer death. Amazon, which once called itself “the everything store,” now produces television shows, owns Whole Foods and powers the cloud. The architect of this firm, Jeff Bezos, even owns this newspaper.

Along with Facebook, Microsoft and Apple, these companies are in a race to become our “personal assistant.” They want to wake us in the morning, have their artificial intelligence software guide us through our days and never quite leave our sides. They aspire to become the repository for precious and private items, our calendars and contacts, our photos and documents. They intend for us to turn unthinkingly to them for information and entertainment while they catalogue our intentions and aversions. Google Glass and the Apple Watch prefigure the day when these companies implant their artificial intelligence in our bodies. Brin has mused, “Perhaps in the future, we can attach a little version of Google that you just plug into your brain.”

More than any previous coterie of corporations, the tech monopolies aspire to mold humanity into their desired image of it. They think they have the opportunity to complete the long merger between man and machine — to redirect the trajectory of human evolution. How do I know this? In annual addresses and town hall meetings, the founding fathers of these companies often make big, bold pronouncements about human nature — a view that they intend for the rest of us to adhere to. Page thinks the human body amounts to a basic piece of code: “Your program algorithms aren’t that complicated,” he says. And if humans function like computers, why not hasten the day we become fully cyborg?

To take another grand theory, Facebook chief Mark Zuckerberg has exclaimed his desire to liberate humanity from phoniness, to end the dishonesty of secrets. “The days of you having a different image for your work friends or co-workers and for the other people you know are probably coming to an end pretty quickly,” he has said. “Having two identities for yourself is an example of a lack of integrity.” Of course, that’s both an expression of idealism and an elaborate justification for Facebook’s business model.

There’s an oft-used shorthand for the technologist’s view of the world. It is assumed that libertarianism dominates Silicon Valley, and that isn’t wholly wrong. High-profile devotees of Ayn Rand can be found there. But if you listen hard to the titans of tech, it’s clear that their worldview is something much closer to the opposite of a libertarian’s veneration of the heroic, solitary individual. The big tech companies think we’re fundamentally social beings, born to collective existence. They invest their faith in the network, the wisdom of crowds, collaboration. They harbor a deep desire for the atomistic world to be made whole. (“Facebook stands for bringing us closer together and building a global community,” Zuckerberg wrote in one of his many manifestos.) By stitching the world together, they can cure its ills.

Rhetorically, the tech companies gesture toward individuality — to the empowerment of the “user” — but their worldview rolls over it. Even the ubiquitous invocation of users is telling: a passive, bureaucratic description of us. The big tech companies (the Europeans have lumped them together as GAFA: Google, Apple, Facebook, Amazon) are shredding the principles that protect individuality. Their devices and sites have collapsed privacy; they disrespect the value of authorship, with their hostility toward intellectual property. In the realm of economics, they justify monopoly by suggesting that competition merely distracts from the important problems like erasing language barriers and building artificial brains. Companies should “transcend the daily brute struggle for survival,” as Facebook investor Peter Thiel has put it.

When it comes to the most central tenet of individualism — free will — the tech companies have a different way. They hope to automate the choices, both large and small, we make as we float through the day. It’s their algorithms that suggest the news we read, the goods we buy, the paths we travel, the friends we invite into our circles. [Blogger Note: As computers can’t write music like humans, algorithms cannot really define tastes. Our sensibilities are excited by serendipity, innovation, and surprise.]

It’s hard not to marvel at these companies and their inventions, which often make life infinitely easier. But we’ve spent too long marveling. The time has arrived to consider the consequences of these monopolies, to reassert our role in determining the human path. Once we cross certain thresholds — once we remake institutions such as media and publishing, once we abandon privacy — there’s no turning back, no restoring our lost individuality.

***

Over the generations, we’ve been through revolutions like this before. Many years ago, we delighted in the wonders of TV dinners and the other newfangled foods that suddenly filled our kitchens: slices of cheese encased in plastic, oozing pizzas that emerged from a crust of ice, bags of crunchy tater tots. In the history of man, these seemed like breakthrough innovations. Time-consuming tasks — shopping for ingredients, tediously preparing a recipe and tackling a trail of pots and pans — were suddenly and miraculously consigned to history.

The revolution in cuisine wasn’t just enthralling. It was transformational. New products embedded themselves deeply in everyday life, so much so that it took decades for us to understand the price we paid for their convenience, efficiency and abundance. Processed foods were feats of engineering, all right — but they were engineered to make us fat. Their delectable taste required massive quantities of sodium and sizable stockpiles of sugar, which happened to reset our palates and made it harder to satehunger. It took vast quantities of meat and corn to fabricate these dishes, and a spike in demand remade American agriculture at a terrible environmental cost. A whole new system of industrial farming emerged, with penny-conscious conglomerates cramming chickens into feces-covered pens and stuffing them full of antibiotics. By the time we came to understand the consequences of our revised patterns of consumption, the damage had been done to our waistlines, longevity, souls and planet.

Something like the midcentury food revolution is now reordering the production and consumption of knowledge. Our intellectual habits are being scrambled by the dominant firms. Giant tech companies have become the most powerful gatekeepers the world has ever known. Google helps us sort the Internet, by providing a sense of hierarchy to information; Facebook uses its algorithms and its intricate understanding of our social circles to filter the news we encounter; Amazon bestrides book publishing with its overwhelming hold on that market.

Such dominance endows these companies with the ability to remake the markets they control. As with the food giants, the big tech companies have given rise to a new science that aims to construct products that pander to their consumers. Unlike the market research and television ratings of the past, the tech companies have a bottomless collection of data, acquired as they track our travels across the Web, storing every shard about our habits in the hope that they may prove useful. They have compiled an intimate portrait of the psyche of each user — a portrait that they hope to exploit to seduce us into a compulsive spree of binge clicking and watching. And it works: On average, each Facebook user spends one-sixteenth of their day on the site.

In the realm of knowledge, monopoly and conformism are inseparable perils. The danger is that these firms will inadvertently use their dominance to squash diversity of opinion and taste. Concentration is followed by homogenization. As news media outlets have come to depend heavily on Facebook and Google for traffic — and therefore revenue — they have rushed to produce articles that will flourish on those platforms. This leads to a duplication of the news like never before, with scores of sites across the Internet piling onto the same daily outrage. It’s why a picture of a mysteriously colored dress generated endless articles, why seemingly every site recaps “Game of Thrones.” Each contribution to the genre adds little, except clicks. Old media had a pack mentality, too, but the Internet promised something much different. And the prevalence of so much data makes the temptation to pander even greater.

This is true of politics. Our era is defined by polarization, warring ideological gangs that yield no ground. Division, however, isn’t the root cause of our unworkable system. There are many causes, but a primary problem is conformism. Facebook has nurtured two hive minds, each residing in an informational ecosystem that yields head-nodding agreement and penalizes dissenting views. This is the phenomenon that the entrepreneur and author Eli Pariser famously termed the “Filter Bubble” — how Facebook mines our data to keep giving us the news and information we crave, creating a feedback loop that pushes us deeper and deeper into our own amen corners.

As the 2016 presidential election so graphically illustrated, a hive mind is an intellectually incapacitated one, with diminishing ability to tell fact from fiction, with an unshakable bias toward party line. The Russians understood this, which is why they invested so successfully in spreading dubious agitprop via Facebook. And it’s why a raft of companies sprouted — Occupy Democrats, the Angry Patriot, Being Liberal — to get rich off the Filter Bubble and to exploit our susceptibility to the lowest-quality news, if you can call it that.

Facebook represents a dangerous deviation in media history. Once upon a time, elites proudly viewed themselves as gatekeepers. They could be sycophantic to power and snobbish, but they also felt duty-bound to elevate the standards of society and readers. Executives of Silicon Valley regard gatekeeping as the stodgy enemy of innovation — they see themselves as more neutral, scientific and responsive to the market than the elites they replaced — a perspective that obscures their own power and responsibilities. So instead of shaping public opinion, they exploit the public’s worst tendencies, its tribalism and paranoia.

***

During this century, we largely have treated Silicon Valley as a force beyond our control. A broad consensus held that lead-footed government could never keep pace with the dynamism of technology. By the time government acted against a tech monopoly, a kid in a garage would have already concocted some innovation to upend the market. Or, as Google’s Eric Schmidt, put it, “Competition is one click away.” A nostrum that suggested that the very structure of the Internet defied our historic concern for monopoly.

As individuals, we have similarly accepted the omnipresence of the big tech companies as a fait accompli. We’ve enjoyed their free products and next-day delivery with only a nagging sense that we may be surrendering something important. Such blitheness can no longer be sustained. Privacy won’t survive the present trajectory of technology — and with the sense of being perpetually watched, humans will behave more cautiously, less subversively. Our ideas about the competitive marketplace are at risk. With a decreasing prospect of toppling the giants, entrepreneurs won’t bother to risk starting new firms, a primary source of jobs and innovation. And the proliferation of falsehoods and conspiracies through social media, the dissipation of our common basis for fact, is creating conditions ripe for authoritarianism. Over time, the long merger of man and machine has worked out pretty well for man. But we’re drifting into a new era, when that merger threatens the individual. We’re drifting toward monopoly, conformism, their machines. Perhaps it’s time we steer our course.

Who Owns the Internet?

Good New Yorker article referencing Jonathan Taplin’s book Move Fast and Break Things and Franklin Foer’s World Without Mind discussing the state of affairs in the creative digital industries and the role of information in politics and society.

Who Owns the Internet?

What Big Tech’s monopoly powers mean for our culture.

Both writers take the approach of legal copyright and the effects of piracy 0n revenue streams. We believe the focus should be on how content is valued and monetized through network effects. Taplin alludes to this when he suggests a streaming service as a non-profit cooperative (why non-profit?).

Such a streaming/lending service is consistent with the tuka ecosystem model and the revenues generated would be distributed accordingly to the content creators, profitably. This is an essential part of how content is distributed these days according to how consumers want to consume it. The network data generated by the ecosystem can also be monetized through advertising and ancillary marketing, supplementing the decreased income users receive from sales.

This recognizes that the primary roadblock to a thriving ecosystem is the connection costs associated with excessive supply of unfiltered content. This is a problem for consumers as well as creators. Solving that problem helps solve the revenue problem.

DIY – Nashville Music Scene

DIY.
From Rolling Stone magazine.

How Underground Nashville Bands Are Reclaiming Music City

Long dominated by multi-million-dollar country labels, Nashville’s indie musicians are vying to reclaim the city in the name of DIY rock & roll

Musicians are migrating to Nashville to tap resources they can’t find as easily in New York or elsewhere, such as cheap recording and pop-up house venues. 

For years, big labels were the gatekeepers in Tennessee’s capital city. They had the keys to the recording studios and the funds to push singles out to the radio. But in the shadow of the country-music empire, DIY artists have been rising up to find their own voice. “If bands are willing to put the effort forward now, they can make the money themselves,” says Jeremy Ferguson, founder of Nashville’s Battle Tapes recording. “You don’t have to rely on some dick in a fucking suit who’s going to tell you what to do.

Beyond Music Row and the Honky Tonk Highway, underground musicians are building their own scene – and it’s one that spurns the traditional studio system. “A lot of [the Nashville mentality] is anti-establishment,” says Olivia Scibelli, lead singer of Idle Bloom, a band currently writing its second full-length album from Scibelli’s East Nashville basement. “It’s kind of about taking out the middleman.”

Nashville today is a Petri dish of creativity where young artists are gathering wherever they can and booking shows in house venues that pop up in gentrifying neighborhoods. They’re recording albums themselves or with independent producers like Ferguson, who started mixing records in his basement before building a garage studio in his backyard. And they’re organizing into an underground scene that’s starting to look like a rock revolution that could one day dethrone country twang as Nashville’s most famous sound.

One of the launchpads of the movement is DRKMTTR, an all-ages house party of a venue west of downtown that’s set in an old barbershop and flanked by clapboard houses. The volunteer-run venue has been shut down for fire-code violations in the past, and to the young fans showing up with coolers of beer, it can seem like nobody’s in charge. That’s the charm.

On most nights of the week, people drink from cans in the backyard and lounge around on old couches until the band strums its first chords. Then they crowd into the 100-person capacity venue, prepared to be surprised.

Scibelli helps run DRKMTTR, and Idle Bloom has played there in the past, but during a recent rehearsal session, the band’s four members crowd into a windowless room alongside their abused equipment. Bedsheets and worn carpeting along the walls and floor lend bare acoustic treatment, and the music stops cold when a wonky cable craps out. “Real life: We have shitty gear,” says Scibelli. But then everything’s working again, and the band launches into the kind of thunderous melody that draws comparisons to the Breeders and Get Up Kids, with hot-blooded riffs that dance over distorted fuzz to evoke Explosions in the Sky.

“Our scene is definitely more raw,” says Scibelli, comparing bands like hers to the country-driven major label system. “But everyone has their own studio or DIY recording setup. It’s pretty great.”

That Idle Bloom has a scene at all owes some gratitude to the high-profile acts that have given Nashville a shot of rock credibility. Kings of Leon formed in Nashville, while Jack White and the Black Keys are two of the city’s high-profile transplants. Collectively they’ve helped break the “Nashville curse,” the old idea that Nashville rock bands couldn’t connect with a national audience. “The first several bands that got signed out of Nashville – giant contracts – their albums tanked and they were dropped,” says Todd Ohlhauser, who owns Cannery Ballroom, Mercy Lounge and High Watt, three interconnected venues that cater to a rock audience. “If you were a band here and you got signed, you didn’t tell anybody you were from Nashville.”

Ohlhauser finds it easier to book rock acts today than it was a decade ago since there are simply more to choose from. But years back, it was borderline treasonous for local musicians to dabble with grittier sounds. “Once they switched over to rock music, they were almost blacklisted in the Seventies and some of the Eighties,” says Ferguson. “It was always kind of like a keep-it-a-country town.”

Along with the new wave of egalitarian music sensibility, musicians of all stripes are migrating to Nashville to tap resources they can’t find as easily in New York or elsewhere, such as cheap recording and pop-up house venues. The guy changing your oil at Jiffy Lube might play guitar better than the band you listened to on the radio on the drive there.

“The caliber of people that this city attracts makes everything more competitive in a friendly way,” says Grant Gustafson, who sings and plays baritone guitar for Blank Range, a band that started with house shows before graduating to opening slots with Spoon and Drive-By Truckers. And without label execs to answer to, musicians can swing with impunity. “There is an Americana country scene, and there’s a rock scene,” Gustafson says. “All the people in both of those play in each other’s bands and go to each other’s shows, so it all kind of boils together.”

And that’s where underground rock might save Nashville from becoming a honky tonk novelty. It’s putting the emphasis back on what the city has always valued: the song, regardless of genre. “There’s a great punk-rock scene here, a great Americana scene, a great indie scene, and a great pop scene,” says Ohlhauser. “But if there’s one thing that defines the [Nashville sound], it’s that bands here have really good songs.”

It’s the tradition of Loretta Lynn or Kris Kristofferson, Nashville greats who fused poetry with melody. What the underground musicians are realizing is that they don’t need a major label to help them do that. In fact, they might be better off without one.

Why musicians are so angry…

…at the world’s most popular music streaming service

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Washington Post
 July 14
With the money from CDs and digital downloads disappearing, the music industry has pinned its hope for the future on online song streaming, which now accounts for the majority of the $7.7 billion U.S. music market.

But the biggest player in this future isn’t one of the names most associated with streaming — Spotify, Amazon, Pandora or Apple. It’s YouTube, the site best known for viral videos, which accounts for 25 percent of all music streamed worldwide, far more than any other site.

Now, YouTube is locked in an increasingly bitter battle with music labels over how much it pays to stream their songs — and at stake is not just the finances of the music industry but also the way that millions of people around the world have grown accustomed to listening to music: free of cost.

Music labels accuse YouTube of using a legal loophole to pay less for songs than traditional music-streaming sites, calling YouTube the biggest threat since song piracy crippled the industry in the early 2000s. The industry has pressed its case to regulators around the world in hopes of forcing a change.

“I do think YouTube is starting to panic a little bit,” said Mitch Glazier, president of the Recording Industry Association of America.

But YouTube is not backing down, stressing the benefits to musicians of promotion on one of the Web’s most popular sites — which allows ordinary users to integrate music into their uploads. YouTube also warns against attacks that could reduce competition among streaming services.

“The industry should be really, really careful because they could close their eyes and wake up with their revenue really concentrated in two, three sources,” said Lyor Cohen, YouTube’s global head of music, referring to Spotify, Apple Music and Amazon Prime Music. (Amazon founder Jeffrey P. Bezos owns The Washington Post.)

The music industry counters they are backed into a corner when negotiating with YouTube — a unit of Google-parent Alphabet — which is mostly shielded by federal law from being responsible for what users post on the site.

“It isn’t a level playing field,” said one executive at a major music label who spoke on the condition of anonymity because he wasn’t authorized to talk, “because ultimately you’re negotiating with a party who is going to have your content no matter what.”

Now, the battle is heating up as the European Union is expected to release new rules later this year for how services such as YouTube handle music, potentially upending some of the copyright protections that undergird the Internet.

Online streaming works like a digital jukebox, with fractions of a penny paid each time a song is played. The money comes from ads and subscriptions.

The E.U. has formally recognized that there is a “value gap” between song royalties and what user-upload services such as YouTube earn from selling ads while playing music. YouTube is by far the largest user-upload site.

How such a law would address the gap is still being decided, but the E.U. has indicated it plans to focus on ensuring copyright holders are “properly remunerated.”

Even the value gap’s existence is disputed.

A recent economic study commissioned by YouTube found no value gap — in fact, the report said YouTube promotes the music industry, and if YouTube stopped playing music, 85 percent of users would flock to services that offered lower or no royalties.

A different study by an independent consulting group pegged the YouTube value gap at more than $650 million in the United States alone.

“YouTube is viewed as a giant obstacle in the path to success for the streaming marketplace,” Glazier said.

The dispute boils down to what YouTube pays for songs.

Musicians from Arcade Fire to Garth Brooks to Pharrell Williams say they earn significantly less when their songs are played on YouTube than on a site such as Spotify — even though many listeners use these services in the same way. Both YouTube and Spotify allow users to search for music and find song recommendations. On YouTube, users can find music alongside cat videos and toy reviews in what is generally a free-for-all of content, while people go to Spotify and the like for a more refined experience. Some audiophiles argue the sound quality on music streaming sites is superior.

YouTube pays an estimated $1 per 1,000 plays on average, while Spotify and Apple music pay a rate closer to $7.

Irving Azoff, the legendary manager for acts such as the Eagles and Christina Aguilera, said he has one artist — whom he declined to name — who gets 33 percent of her online streams from YouTube but only 10 percent of her streaming revenue.

Smaller acts see it, too. Zoe Keating, an instrumental cello player, showed The Washington Post a statement from YouTube showing that she earned $261 from 1.42 million views on YouTube. In comparison, she earned $940 from 230,000 streams on Spotify.

“YouTube revenue is so negligible that I stopped paying attention to it,” Keating said.

YouTube admits that it pays less for songs.

But the reason for this disparity is where the two sides split.

The music industry claims YouTube has avoided paying a fair-market rate by hiding behind broad legal protections. In the United States, that’s the “safe harbor” provision, which essentially says YouTube is not to blame if someone uploads a copy-protected song —unless the copyright holder complains.

This, the music industry argues, leads to a costly game of “Whac-A-Mole”: hunting for illicit song uploads and filing notices with YouTube.

“You can’t prevent something from going up on YouTube. All you can do is ask them to take it down,” said Stephen Carlisle, who runs the copyright office at Nova Southeastern University. “At some point, it’s not worth it to do this.”

YouTube says it has the solution: Its Content ID system automatically checks for violations by comparing songs detected in new uploads against a database of claimed songs, capturing 99.5 percent of complaints. The company says it averages fewer than 1,500 traditional copyright claims from the music industry a week.

YouTube also pointed out that it has licensing deals with music labels large and small.

Earlier this year, Warner Music Group — one of the “big three” music labels — signed a new licensing deal with YouTube, and a memo from Warner chief executive Steve Cooper leaked out, saying the deal was signed “under very difficult circumstances.”

“There’s no getting around the fact that, even if YouTube doesn’t have licenses, our music will still be available but not monetized at all,” the memo continued.

Warner confirmed the memo’s authenticity, but, like the other major labels, declined to comment for this article.

Cooper’s complaints surprised Cohen, who worked at Warner until leaving for YouTube last year.

“I never heard that from his mouth during the entire negotiation,” Cohen said.

Cohen’s move to YouTube created waves in the industry. After all, Cohen was famous for taking one of the hardest stands against YouTube when, in 2008, he pulled Warner’s entire song catalogue from the video service to protest low song royalties. It was the nuclear option.

And it failed. After nine months and spending $2 million trying to keep its music off YouTube, Warner capitulated.

Cohen said he was sympathetic to his former colleague’s complaints. But YouTube pays $1 billion in song royalties worldwide each year. Cohen said his company has been hindered by its global reach — ad rates are lower outside the United States — and its slower rollout of a subscription option, YouTube Red. Song royalties are higher with monthly subscriptions than ads.

“What I’m trying to do with YouTube is be a cheerleader to build a subscription business that the industry can be proud of,” Cohen said.

Nabila Hisham, 22, is a music fan on YouTube. Recently, the college student in Kuala Lumpur, Malaysia, has been playing one song repeatedly: “Despacito,” a chart-topping Latin pop remix featuring Justin Bieber. The YouTube video — which has a total of 412 million plays — is a photo of Bieber’s tattooed neck. The video is beside the point. For, Hisham, it’s about the music.

“I’m glad that YouTube exists,” she said.

Correction: A previous version of this story stated YouTube’s ContentID system automatically handles 98 percent of copyright management for songs. The system handles 99.5 percent.

FAANGs = Public Utilities?

Could it be that these companies — and Google in particular — have become natural monopolies by supplying an entire market’s demand for a service, at a price lower than what would be offered by two competing firms? And if so, is it time to regulate them like public utilities?

Consider a historical analogy: the early days of telecommunications.

In 1895 a photograph of the business district of a large city might have shown 20 phone wires attached to most buildings. Each wire was owned by a different phone company, and none of them worked with the others. Without network effects, the networks themselves were almost useless.

The solution was for a single company, American Telephone and Telegraph, to consolidate the industry by buying up all the small operators and creating a single network — a natural monopoly. The government permitted it, but then regulated this monopoly through the Federal Communications Commission.

AT&T (also known as the Bell System) had its rates regulated, and was required to spend a fixed percentage of its profits on research and development. In 1925 AT&T set up Bell Labs as a separate subsidiary with the mandate to develop the next generation of communications technology, but also to do basic research in physics and other sciences. Over the next 50 years, the basics of the digital age — the transistor, the microchip, the solar cell, the microwave, the laser, cellular telephony — all came out of Bell Labs, along with eight Nobel Prizes.

In a 1956 consent decree in which the Justice Department allowed AT&T to maintain its phone monopoly, the government extracted a huge concession: All past patents were licensed (to any American company) royalty-free, and all future patents were to be licensed for a small fee. These licenses led to the creation of Texas Instruments, Motorola, Fairchild Semiconductor and many other start-ups.

True, the internet never had the same problems of interoperability. And Google’s route to dominance is different from the Bell System’s. Nevertheless it still has all of the characteristics of a public utility.

We are going to have to decide fairly soon whether Google, Facebook and Amazon are the kinds of natural monopolies that need to be regulated, or whether we allow the status quo to continue, pretending that unfettered monoliths don’t inflict damage on our privacy and democracy.

It is impossible to deny that Facebook, Google and Amazon have stymied innovation on a broad scale. To begin with, the platforms of Google and Facebook are the point of access to all media for the majority of Americans. While profits at Google, Facebook and Amazon have soared, revenues in media businesses like newspaper publishing or the music business have, since 2001, fallen by 70 percent.

According to the Bureau of Labor Statistics, newspaper publishers lost over half their employees between 2001 and 2016. Billions of dollars have been reallocated from creators of content to owners of monopoly platforms. All content creators dependent on advertising must negotiate with Google or Facebook as aggregator, the sole lifeline between themselves and the vast internet cloud.

It’s not just newspapers that are hurting. In 2015 two Obama economic advisers, Peter Orszag and Jason Furman, published a paper arguing that the rise in “supernormal returns on capital” at firms with limited competition is leading to a rise in economic inequality. The M.I.T. economists Scott Stern and Jorge Guzman explained that in the presence of these giant firms, “it has become increasingly advantageous to be an incumbent, and less advantageous to be a new entrant.”

There are a few obvious regulations to start with. Monopoly is made by acquisition — Google buying AdMob and DoubleClick, Facebook buying Instagram and WhatsApp, Amazon buying, to name just a few, Audible, Twitch, Zappos and Alexa. At a minimum, these companies should not be allowed to acquire other major firms, like Spotify or Snapchat.

The second alternative is to regulate a company like Google as a public utility, requiring it to license out patents, for a nominal fee, for its search algorithms, advertising exchanges and other key innovations.

The third alternative is to remove the “safe harbor” clause in the 1998 Digital Millennium Copyright Act, which allows companies like Facebook and Google’s YouTube to free ride on the content produced by others. The reason there are 40,000 Islamic State videos on YouTube, many with ads that yield revenue for those who posted them, is that YouTube does not have to take responsibility for the content on its network. Facebook, Google and Twitter claim that policing their networks would be too onerous. But that’s preposterous: They already police their networks for pornography, and quite well.

Removing the safe harbor provision would also force social networks to pay for the content posted on their sites. A simple example: One million downloads of a song on iTunes would yield the performer and his record label about $900,000. One million streams of that same song on YouTube would earn them about $900.

I’m under no delusion that, with libertarian tech moguls like Peter Thiel in President Trump’s inner circle, antitrust regulation of the internet monopolies will be a priority. Ultimately we may have to wait four years, at which time the monopolies will be so dominant that the only remedy will be to break them up. Force Google to sell DoubleClick. Force Facebook to sell WhatsApp and Instagram.

Woodrow Wilson was right when he said in 1913, “If monopoly persists, monopoly will always sit at the helm of the government.” We ignore his words at our peril.

Creative Disruption!

Disrupted by technology!

What happened to the music industry?  The publishing industry? The television and film industry? The stock photography industry?

Simple: Disrupted by digital technology!

The digitization of creative content that transformed media like music, imagery, text and video has had broad economic consequences:

  1. The production costs of creating such media in digital formats plunged.
  2. The distribution costs associated with sharing that media also plunged.
  3. The combined effect of 1. & 2. has led to an explosion of new content.

Simple economics shows that when the supply of a good rises sharply but the demand does not keep pace, the price falls precipitously. So the price of digital content like music mp3s, video files, images, and eBooks has plunged as well.

Because the duplication and distribution costs are close to zero, consumers of such content assume that the price should be close to zero. [See Chris Anderson’s book, Free.] Unfortunately, while the out-of-pocket production costs of creative media have gone down, the time, energy and skill required to create have not. Thus, the revenue streams and income accruing to creative artists has been hollowed out.

Two of the most disrupted professions has been musicians and writers. A few graphic slides illustrate the problem:

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This might seem discouraging, spelling the end of these professions, but we would suggest a more circumspect analysis of the challenges and opportunities presented by the digital age. After all, being an artist has always been a challenge in our commercial world. With tuka we propose that as technology has disrupted the past, it will also disrupt the present and help shape an unanticipated future. Stay tuned…