Data Land Grab

FB-vs-Google

‘Good for the world’? Facebook emails reveal what really drives the site

As we can read from this article and Facebook’s internal management debates, Web 2.0 (of which the GAFA companies are the archetypes) is built on a data land grab. It’s rather similar to the actual land grab that the European powers battled over for the New World, then with the colonization of Africa and Asia.

Data is now a valuable resource that has been priced up there with land and capital. Naturally, the tech oligopolies and their startup wannabes all want to grab as much as possible. And who are they grabbing it from? The network users of course.

Web 3.0 is all about democratizing the value and monetization of personal networked data. It’s about decentralized ownership and control, much like the desire to own and control the fruits of one’s labor that ended slavery. Web 3.0 is the future, because Web 2.0 is unsustainable.

 

The Tyranny of the Algo

Evil tech

As we’ve argued previously, here, here, and here, algorithms are no magic wand for sorting subjective content, artistic or otherwise. Here the top brass at Apple admits to the fact in a criticism of one of its competitors, Spotify.

Two take-aways from Mr. Cook’s argument. One, he claims that Apple uses the human creativity of its users to create playlists, but tuka uses it’s entire network of users to reward human curation of all content. Yeah, web 3.0 is about the human, not the machine.

Second, the race among the streamers, Apple Music, Amazon Music, Google Play, and Spotify, Pandora, etc. is another loss-leading attempt to build out a user base to monetize the data flow. In other words, streaming doesn’t pay unless you can monetize the network in some other way. As I suspected, the pricing model of streaming is likely financially unsustainable in the long-run as the true price of streaming content is several times what consumers are now paying. Direct ownership of content may be far more economical than renting it without ad support.

Apple’s CEO Says Spotify Is ‘Draining the Humanity Out of Music’

Apple CEO Tim Cook recently revealed the company’s streaming music service, Apple Music, has clearly surpassed Spotify in subscribers in the US, Canada, and Spotify.

Instead of gloating, he humbly downplayed the achievement.

“The key thing in music is not the competition between the companies that are providing music, the real challenge is to grow the market.  If we put our emphasis on growing the market, which we’re doing, we’ll be the beneficiaries of that, as will others.”

In a recently published article with monthly business magazine Fast Company, Cook revealed his true feelings about his streaming music rivals.  Taking a clear swipe at Spotify, he said,

“We worry about the humanity being drained out of music, about it becoming a bits-and-bytes kind of world instead of the art and craft.”

Madmen and the Godless Algorithm

FB-vs-Google

This article from The New Yorker.

Good overview history of the advertising model that has dominated our commercialism for decades. It’s now gone on digital steroids. The disruption of ad technology has interesting implications.

How the Math Men Overthrew the Mad Men

By Ken Auletta

Once, Mad Men ruled advertising. They’ve now been eclipsed by Math Men—the engineers and data scientists whose province is machines, algorithms, pureed data, and artificial intelligence. Yet Math Men are beleaguered, as Mark Zuckerberg demonstrated when he humbled himself before Congress, in April. Math Men’s adoration of data—coupled with their truculence and an arrogant conviction that their “science” is nearly flawless—has aroused government anger, much as Microsoft did two decades ago.

The power of Math Men is awesome. Google and Facebook each has a market value exceeding the combined value of the six largest advertising and marketing holding companies. Together, they claim six out of every ten dollars spent on digital advertising, and nine out of ten new digital ad dollars. They have become more dominant in what is estimated to be an up to two-trillion-dollar annual global advertising and marketing business. Facebook alone generates more ad dollars than all of America’s newspapers, and Google has twice the ad revenues of Facebook.

In the advertising world, Big Data is the Holy Grail, because it enables marketers to target messages to individuals rather than general groups, creating what’s called addressable advertising. And only the digital giants possess state-of-the-art Big Data. “The game is no longer about sending you a mail order catalogue or even about targeting online advertising,” Shoshana Zuboff, a professor of business administration at the Harvard Business School, wrote on faz.net, in 2016. “The game is selling access to the real-time flow of your daily life—your reality—in order to directly influence and modify your behavior for profit.” Success at this “game” flows to those with the “ability to predict the future—specifically the future of behavior,” Zuboff writes. She dubs this “surveillance capitalism.” [I question whether this will really work as anticipated once everybody is hip to the game.]

However, to thrash just Facebook and Google is to miss the larger truth: everyone in advertising strives to eliminate risk by perfecting targeting data.[This is the essence of what we’re doing here – reducing the risk of uncertainty.] Protecting privacy is not foremost among the concerns of marketers; protecting and expanding their business is. The business model adopted by ad agencies and their clients parallels Facebook and Google’s. Each aims to massage data to better identify potential customers. Each aims to influence consumer behavior. To appreciate how alike their aims are, sit in an agency or client marketing meeting and you will hear wails about Facebook and Google’s “walled garden,” their unwillingness to share data on their users. When Facebook or Google counter that they must protect “the privacy” of their users, advertisers cry foul: You’re using the data to target ads we paid for—why won’t you share it, so that we can use it in other ad campaigns? [But who really owns your data? Even if you choose to give it away?]

This preoccupation with Big Data is also revealed by the trend in the advertising-agency business to have the media agency, not the creative Mad Men team, occupy the prime seat in pitches to clients, because it’s the media agency that harvests the data to help advertising clients better aim at potential consumers. Agencies compete to proclaim their own Big Data horde. W.P.P.’s GroupM, the largest media agency, has quietly assembled what it calls its “secret sauce,” a collection of forty thousand personally identifiable attributes it plans to retain on two hundred million adult Americans. Unlike Facebook or Google, GroupM can’t track most of what we do online. To parade their sensitivity to privacy, agencies reassuringly boast that they don’t know the names of people in their data bank. But they do have your I.P. address, which yields abundant information, including where you live. For marketers, the advantage of being able to track online behavior, the former senior GroupM executive Brian Lesser said—a bit hyperbolically, one hopes—is that “we know what you want even before you know you want it.”[That sounds like adman hubris rather than reality.]

Worried that Brian Lesser’s dream will become a nightmare, ProPublica has ferociously chewed on the Big Data privacy menace like a dog with a bone: in its series “Breaking the Black Box,” it wrote, “Facebook has a particularly comprehensive set of dossiers on its more than two billion members. Every time a Facebook member likes a post, tags a photo, updates their favorite movies in their profile, posts a comment about a politician, or changes their relationship status, Facebook logs it . . . When they use Instagram or WhatsApp on their phone, which are both owned by Facebook, they contribute more data to Facebook’s dossier.” Facebook offers advertisers more than thirteen hundred categories for ad targeting, according to ProPublica.

Google, for its part, has merged all the data it collects from its search, YouTube, and other services, and has introduced an About Me page, which includes your date of birth, phone number, where you work, mailing address, education, where you’ve travelled, your nickname, photo, and e-mail address. Amazon knows even more about you. Since it is the world’s largest store and sees what you’ve actually purchased, its data are unrivalled. Amazon reaches beyond what interests you (revealed by a Google search) or what your friends are saying (on Facebook) to what you actually purchase. With Amazon’s Alexa, it has an agent in your home that not only knows what you bought but when you wake up, what you watch, read, listen to, ask for, and eat. And Amazon is aggressively building up its meager ad sales, which gives it an incentive to exploit its data.

Data excite advertisers. Prowling his London office in jeans, Keith Weed, who oversees marketing and communications for Unilever, one of the world’s largest advertisers, described how mobile phones have elevated data as a marketing tool. “When I started in marketing, we were using secondhand data which was three months old,” he said. “Now with the good old mobile, I have individualized data on people. You don’t need to know their names . . . You know their telephone number. You know where they live, because it’s the same location as their PC.” Weed knows what times of the day you usually browse, watch videos, answer e-mail, travel to the office—and what travel routes you take. “From your mobile, I know whether you stay in four-star or two-star hotels, whether you go to train stations or airports. I use these insights along with what you’re browsing on your PC. I know whether you’re interested in horses or holidays in the Caribbean.” By using programmatic computers to buy ads targeting these individuals, he says, Unilever can “create a hundred thousand permutations of the same ad,” as they recently did with a thirty-second TV ad for Axe toiletries aimed at young men in Brazil. The more Keith Weed knows about a consumer, the better he can aim to target a sale.

Engineers and data scientists vacuum data. They see data as virtuous, yielding clues to the mysteries of human behavior, suggesting efficiencies (including eliminating costly middlemen, like agency Mad Men), offering answers that they believe will better serve consumers, because the marketing message is individualized. The more cool things offered, the more clicks, the more page views, the more user engagement. Data yield facts and advance a quest to be more scientific—free of guesses. As Eric Schmidt, then the executive chairman of Google’s parent company, Alphabet, said at the company’s 2017 shareholder meeting, “We start from the principles of science at Google and Alphabet.”

They believe there is nobility in their quest. By offering individualized marketing messages, they are trading something of value in exchange for a consumer’s attention. They also start from the principle, as the TV networks did, that advertising allows their product to be “free.” But, of course, as their audience swells, so does their data. Sandy Parakilas, who was Facebook’s operations manager on its platform team from 2011 to 2012, put it this way in a scathing Op-Ed for the Times, last November: “The more data it has on offer, the more value it creates for advertisers. That means it has no incentive to police the collection or use of that data—except when negative press or regulators are involved.” For the engineers, the privacy issue—like “fake news” and even fraud—was relegated to the nosebleed bleachers. [This fact should be obvious to all of us.]

With a chorus of marketers and citizens and governments now roaring their concern, the limitations of Math Men loom large. Suddenly, governments in the U.S. are almost as alive to privacy dangers as those in Western Europe, confronting Facebook by asking how the political-data company Cambridge Analytica, employed by Donald Trump’s Presidential campaign, was able to snatch personal data from eighty-seven million individual Facebook profiles. Was Facebook blind—or deliberately mute? Why, they are really asking, should we believe in the infallibility of your machines and your willingness to protect our privacy?

Ad agencies and advertisers have long been uneasy not just with the “walled gardens” of Facebook and Google but with their unwillingness to allow an independent company to monitor their results, as Nielsen does for TV and comScore does online. This mistrust escalated in 2016, when it emerged that Facebook and Google charged advertisers for ads that tricked other machines to believe an ad message was seen by humans when it was not. Advertiser confidence in Facebook was further jolted later in 2016, when it was revealed that the Math Men at Facebook overestimated the average time viewers spent watching video by up to eighty per cent. And in 2017, Math Men took another beating when news broke that Google’s YouTube and Facebook’s machines were inserting friendly ads on unfriendly platforms, including racist sites and porn sites. These were ads targeted by keywords, like “Confederacy” or “race”; placing an ad on a history site might locate it on a Nazi-history site.

The credibility of these digital giants was further subverted when Russian trolls proved how easy it was to disseminate “fake news” on social networks. When told that Facebook’s mechanized defenses had failed to screen out disinformation planted on the social network to sabotage Hillary Clinton’s Presidential campaign, Mark Zuckerberg publicly dismissed the assertion as “pretty crazy,” a position he later conceded was wrong.

By the spring of 2018, Facebook had lost control of its narrative. Their original declared mission—to “connect people” and “build a global community”—had been replaced by an implicit new narrative: we connect advertisers to people.[Indeed, connecting people on a global basis for human interaction really doesn’t make a lot of sense. A global gossip network? Unless, of course, you’re trying to monetize it.] It took Facebook and Google about five years before they figured out how to generate revenue, and today roughly ninety-five percent of Facebook’s dollars and almost ninety percent of Google’s comes from advertising. They enjoy abundant riches because they tantalize advertisers with the promise that they can corral potential customers. This is how Facebook lured developers and app makers by offering them a permissive Graph A.P.I., granting them access to the daily habits and the interchange with friends of its users. This Graph A.P.I. is how Cambridge Analytica got its paws on the data of eighty-seven million Americans.

The humiliating furor this news provoked has not subverted the faith among Math Men that their “science” will prevail. They believe advertising will be further transformed by new scientific advances like artificial intelligence that will allow machines to customize ads, marginalizing human creativity. With algorithms creating profiles of individuals, Airbnb’s then chief marketing officer, Jonathan Mildenhall, told me, “brands can engineer without the need for human creativity.” Machines will craft ads, just as machines will drive cars. But the ad community is increasingly mistrustful of the machines, and of Facebook and Google.[As they should be – the value has been over-hyped.] During a presentation at Advertising Week in New York this past September, Keith Weed offered a report to Facebook and Google. He gave them a mere “C” for policing ad fraud, and a harsher “F” for cross-platform transparency, insisting, “We’ve got to see over the walled gardens.”

That mistrust has gone viral. A powerful case for more government regulation of the digital giants was made by The Economist, a classically conservative publication that also endorsed the government’s antitrust prosecution of Microsoft, in 1999. The magazine editorialized, in May, 2017, that governments must better police the five digital giants—Facebook, Google, Amazon, Apple, and Microsoft—because data were “the oil of the digital era”: “Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the ‘data economy.’ ” Inevitably, an abundance of data alters the nature of competition, allowing companies to benefit from network effects, with users multiplying and companies amassing wealth to swallow potential competitors.

The politics of Silicon Valley is left of center, but its disdain for government regulation has been right of center. This is changing. A Who’s Who of Silicon notables—Tim Berners-Lee, Tim Cook, Ev Williams, Sean Parker, and Tony Fadell, among others—have harshly criticized the social harm imposed by the digital giants. Marc Benioff, the C.E.O. of Salesforce.com—echoing similar sentiments expressed by Berners-Lee—has said, “The government is going to have to be involved. You do it exactly the same way you regulated the cigarette industry.”

Cries for regulating the digital giants are almost as loud today as they were to break up Microsoft in the late nineties. Congress insisted that Facebook’s Zuckerberg, not his minions, testify. The Federal Trade Commission is investigating Facebook’s manipulation of user data. Thirty-seven state attorneys general have joined a demand to learn how Facebook safeguards privacy. The European Union has imposed huge fines on Google and wants to inspect Google’s crown jewels—its search algorithms—claiming that Google’s search results are skewed to favor their own sites. The E.U.’s twenty-eight countries this May imposed a General Data Protection Regulation to protect the privacy of users, requiring that citizens must choose to opt in before companies can horde their data.

Here’s where advertisers and the digital giants lock arms: they speak with one voice in opposing opt-in legislation, which would deny access to data without the permission of users. If consumers wish to deny advertisers access to their cookies—their data—they agree: the consumer must voluntarily opt out, meaning they must endure a cumbersome and confusing series of online steps. Amid the furor about Facebook and Google, remember these twinned and rarely acknowledged truisms: more data probably equals less privacy, while more privacy equals less advertising revenue. Thus, those who rely on advertising have business reasons to remain tone-deaf to privacy concerns.

Those reliant on advertising know: the disruption that earlier slammed the music, newspaper, magazine, taxi, and retail industries now upends advertising. Agencies are being challenged by a host of competitive frenemies: by consulting and public-relations companies that have jumped into their business; by platform customers like Google and Facebook but also the Times, NBC, and Buzzfeed, that now double as ad agencies and talk directly to their clients; by clients that increasingly perform advertising functions in-house.

But the foremost frenemy is the public, which poses an existential threat not just to agencies but to Facebook and the ad revenues on which most media rely. Citizens protest annoying, interruptive advertising, particularly on their mobile phones—a device as personal as a purse or wallet. An estimated twenty per cent of Americans, and one-third of Western Europeans, employ ad-blocker software. More than half of those who record programs on their DVRs choose to skip the ads. Netflix and Amazon, among others, have accustomed viewers to watch what they want when they want, without commercial interruption.

Understandably, those dependent on ad dollars quake. The advertising and marketing world scrambles for new ways to reach consumers. Big Data, they believe, promises ways they might better communicate with annoyed consumers—maybe unlock ways that ads can be embraced as a useful individual service rather than as an interruption. If Big Data’s use is circumscribed to protect privacy, the advertising business will suffer. In this core conviction, at least, Mad Men and Math Men are alike.

This piece is partially adapted from Auletta’s forthcoming book, “Frenemies: The Epic Disruption of the Ad Business (and Everything Else).”

 

I would guess that the ad business will be disrupted further as we find new ways to connect consumers with what they want. This will reduce the power of the Math Men at centralized network servers.

I also suspect search will become a regulated public utility. A free society cannot tolerate one or two private corporations controlling all the information data that flows through its networks.

 

Tech Dystopia?

Below are excerpts from a fascinating series of articles by The Guardian (with links). The articles address many of the ways that Internet 2.0 network media models such as Google, Facebook, YouTube, Instagram, etc. are transforming, and in many cases undermining, the foundations of a democratic humanistic society. These issues motivate us at tuka to design solutions to the great question of life’s meaning.

Personally, I don’t believe this dystopia will come to pass because humans are quite resilient as a species and eventually our humanist qualities will dominate our biological urges and economic imperatives. We have free will and ultimately, we choose correctly.

Perhaps that is an overly optimistic opinion, but Internet (or Web) 3.0 technology is rewriting the script with applications that reassert human control over the data universe. We will build more humanistic social communities that employ technology, with the emphasis always on the human. We see this now with the growing refusal to surrender to Web 2.0 by tech insiders.

See excerpts and comments below.

“If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram, and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?

‘Fiction is outperforming reality’: how YouTube’s algorithm distorts truth

Paul Lewis February 2, 2018

There are 1.5 billion YouTube users in the world, which is more than the number of households that own televisions. What they watch is shaped by this algorithm, which skims and ranks billions of videos to identify 20 “up next” clips that are both relevant to a previous video and most likely, statistically speaking, to keep a person hooked on their screen.

Company insiders tell me the algorithm is the single most important engine of YouTube’s growth. In one of the few public explanations of how the formula works – an academic paper that sketches the algorithm’s deep neural networks, crunching a vast pool of data about videos and the people who watch them – YouTube engineers describe it as one of the “largest scale and most sophisticated industrial recommendation systems in existence”.

We see here the power of AI data algorithms to filter content. The Google response has been to “expand the army of human moderators.” That’s a necessary method of reasserting human judgment over the network

The primary focus of the article then turns to politics and the electoral influences of disinformation:

Much has been written about Facebook and Twitter’s impact on politics, but in recent months academics have speculated that YouTube’s algorithms may have been instrumental in fuelling disinformation during the 2016 presidential election. “YouTube is the most overlooked story of 2016,” Zeynep Tufekci, a widely respected sociologist and technology critic, tweeted back in October. “Its search and recommender algorithms are misinformation engines.”

Apparently, the sensationalism surrounding the Trump campaign caused YT’s AI algorithms to push more video feeds favorable to Trump and damaging to Hillary Clinton. One doesn’t need to be a partisan to recognize this was probably true for this particular media channel and its business model that values more views more than anything else.

However, this reality can also be distorted to present a particular conspiracy narrative of its own:

Trump won the electoral college as a result of 80,000 votes spread across three swing states. There were more than 150 million YouTube users in the US. The videos contained in Chaslot’s database of YouTube-recommended election videos were watched, in total, more than 3bn times before the vote in November 2016.

This, unfortunately, is cherry-picking statistical inferences concerning the margin of voting support. What was significant in determining the 2016 election outcome was not 80,000 votes across three states, but a run of popular vote wins in 2,623 of 3,112 counties across the U.S. This 85% share could not be an accident, nor could it be due to the single influence of disinformation, Russian or otherwise. The true difference in the election was not revealed by the popular vote total or the Electoral College vote, but by the geographical distribution of support. One can argue about which is more critical to democratic governance, but this post is about electronic media content, not political analysis.

The next article further addresses how technology is influencing our individual behaviors.

‘Our minds can be hijacked’: the tech insiders who fear a smartphone dystopia

Paul Lewis October 6, 2017

Justin Rosenstein had tweaked his laptop’s operating system to block Reddit, banned himself from Snapchat, which he compares to heroin, and imposed limits on his use of Facebook. But even that wasn’t enough. In August, the 34-year-old tech executive took a more radical step to restrict his use of social media and other addictive technologies.

A decade after he stayed up all night coding a prototype of what was then called an “awesome” button, Rosenstein belongs to a small but growing band of Silicon Valley heretics who complain about the rise of the so-called “attention economy”: an internet shaped around the demands of an advertising economy.

The extent of this addiction is cited by research that shows people touch, swipe or tap their phone 2,617 times a day!

There is growing concern that as well as addicting users, technology is contributing toward so-called “continuous partial attention”, severely limiting people’s ability to focus, and possibly lowering IQ. One recent study showed that the mere presence of smartphones damages cognitive capacity – even when the device is turned off. “Everyone is distracted,” Rosenstein says. “All of the time.”

“The technologies we use have turned into compulsions, if not full-fledged addictions,” Eyal writes. “It’s the impulse to check a message notification. It’s the pull to visit YouTube, Facebook, or Twitter for just a few minutes, only to find yourself still tapping and scrolling an hour later.” None of this is an accident, he writes. It is all “just as their designers intended”.

Tristan Harris, a former Google employee turned vocal critic of the tech industry points out that… “All of us are jacked into this system. All of our minds can be hijacked. Our choices are not as free as we think they are.”

“I don’t know a more urgent problem than this,” Harris says. “It’s changing our democracy, and it’s changing our ability to have the conversations and relationships that we want with each other.” 

Harris believes that tech companies never deliberately set out to make their products addictive. They were responding to the incentives of an advertising economy, experimenting with techniques that might capture people’s attention, even stumbling across highly effective design by accident.

“Smartphones are useful tools,” says Loren Brichter, a product designer. “But they’re addictive. Pull-to-refresh is addictive. Twitter is addictive. These are not good things. When I was working on them, it was not something I was mature enough to think about.”

The two inventors listed on Apple’s patent for “managing notification connections and displaying icon badges” are Justin Santamaria and Chris Marcellino. A few years ago Marcellino, 33, left the Bay Area and is now in the final stages of retraining to be a neurosurgeon. He stresses he is no expert on addiction but says he has picked up enough in his medical training to know that technologies can affect the same neurological pathways as gambling and drug use. “These are the same circuits that make people seek out food, comfort, heat, sex,” he says.

“The people who run Facebook and Google are good people, whose well-intentioned strategies have led to horrific unintended consequences,” he says. “The problem is that there is nothing the companies can do to address the harm unless they abandon their current advertising models.

But how can Google and Facebook be forced to abandon the business models that have transformed them into two of the most profitable companies on the planet?

This is exactly the problem – they really can’t. Newer technology, such as distributed social networks tracked by blockchain technology, must be deployed to disrupt the dysfunctional existing technology. New business models will be designed to support this disruption. Human behavioral instincts are crucial to successful new designs that make us more human, rather than less.

James Williams does not believe talk of dystopia is far-fetched. …He says his epiphany came a few years ago when he noticed he was surrounded by technology that was inhibiting him from concentrating on the things he wanted to focus on. “It was that kind of individual, existential realization: what’s going on?” he says. “Isn’t technology supposed to be doing the complete opposite of this?”

The question we ask at tuka is: “What do people really want from technology and social interaction? Distraction or meaning? And how do they find meaning?” Our answer is self-expression through creativity, sharing it, and connecting with communities.

Williams and Harris left Google around the same time and co-founded an advocacy group, Time Well Spent, that seeks to build public momentum for a change in the way big tech companies think about design. 

“Eighty-seven percent of people wake up and go to sleep with their smartphones,” he says. The entire world now has a new prism through which to understand politics, and Williams worries the consequences are profound.

The same forces that led tech firms to hook users with design tricks, he says, also encourage those companies to depict the world in a way that makes for compulsive, irresistible viewing. “The attention economy incentivizes the design of technologies that grab our attention,” he says. “In so doing, it privileges our impulses over our intentions.”

That means privileging what is sensational over what is nuanced, appealing to emotion, anger, and outrage. The news media is increasingly working in service to tech companies, Williams adds, and must play by the rules of the attention economy to “sensationalize, bait and entertain in order to survive”.

In the wake of Donald Trump’s stunning electoral victory, many were quick to question the role of so-called “fake news” on Facebook, Russian-created Twitter bots or the data-centric targeting efforts that companies such as Cambridge Analytica used to sway voters. But Williams sees those factors as symptoms of a deeper problem.

It is not just shady or bad actors who were exploiting the internet to change public opinion. The attention economy itself is set up to promote a phenomenon like Trump, who is masterly at grabbing and retaining the attention of supporters and critics alike, often by exploiting or creating outrage.

Orwellian-style coercion is less of a threat to democracy than the more subtle power of psychological manipulation, and “man’s almost infinite appetite for distractions”.

“The dynamics of the attention economy are structurally set up to undermine the human will,” Williams says. “If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram, and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?

Our politics will survive and democracy is only one form of governance. The bigger question is how does human civilization survive if our behavior becomes self-destructive and meaningless?

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.

The Thing That Devoured the World

Interesting take on Amazon’s dominance reprinted from PJ Media.

The ‘Amazon Washington Post,’ and Why It Needs to Be Destroyed

By Michael Walsh 2017-07-22

As readers of PJ Media’s daily feature, Hot Mic, are aware, I’m not a big fan of Amazon. In the guise of ease, efficiency and allegedly low prices, it’s crushing the life out of the retail sector in the United States, demolishing bookstores, big-box stores, department stores, grocery stores, record stores, and even smaller retail outlets, putting small businessmen, struggling authors and garage bands out of business. In so doing, it’s also killing job prospects for entry-level workers who might actually not want to work at McDonald’s.

In their place, it offers you Alexa, your very own electronic monitor and spy, sleeping right next to you on the nightstand in the innocuous guise of your smart phone or your tablet, monitoring your porn searches while it pretends to buy you Doris Kearns Goodwin’s latest book or a tin of Acai berry powder.

In publishing, where I earn part of my living, it forces authors to compete with themselves, offering marked-down used versions of works still in print, thus depriving us of royalty payments. At a time when advances — except to celebrities famous for something other than their literary skills — are a tenth of what they used to be, working writers must now depend on quickly earning out the initial advance (based on — you guessed it — royalties) and then getting subsequent paychecks at six-month intervals for as long as the book continues to sell new copies.

Don’t even get me started on Hollywood.

Well, you say, that’s my — and Roger’s and Richard’s and Drew Klavan’s and Roger Kimball’s and David Goldman’s and VDH’s and Andy’s, among other PJ colleagues — tough luck. True enough. But, wait — you’re next.

Shares of  Home Depot and  Lowe’s were slammed Thursday, along with  Whirlpool, after  Amazon threatened to take on the appliance market in a much bigger way in a deal with  Sears Holdings.

The market cap loss in Home Depot, Lowe’s, Whirlpool and Best Buy was about $12.5 billion by the end of the day, after falling to more than $13 billion. Amazon stock was up slightly, and Sears closed up about 10 percent.

But the early read from some analysts was that the sell-off has created a buying opportunity for home improvement retailers Home Depot and Lowe’s, which have proven themselves to be somewhat “Amazon-proof” and among the best performers in the sector. Best Buy, already battling Amazon in electronics, ended the day about 4 percent lower.

Sears, which has been losing share in appliance for years, saw its stock rally as much as 25 percent early Thursday, soon after it announced it would sell its Kenmore-branded appliances on Amazon.com. The products will be compatible with Amazon’s Alexa platform.

God knows, Sears can use the help, as the pictures at the link show. Even if it comes via the Trojan Horse of Alexa. Having been beaten nearly to death by its own ineptitude and electronic retailing, Sears has finally decided that if you can’t beat ’em, join ’em.

The department store chain announced plans on Thursday to sell Kenmore-branded appliances on Amazon.com. Sears also said its Kenmore Smart appliances will be integrated with Amazon’s Alexa platform. Shares of Sears’ stock were climbing more than 25 percent at one point in trading before the market’s open following this news.

“The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand in the U.S.,” Sears CEO Eddie Lampert said in a statement. “At the same time, Sears Home Services and our Innovel Solutions unit will benefit from the relationship as more customers experience their quality services for Kenmore products purchased on Amazon.com.”

Sears said a new “Kenmore Smart” skill for Amazon Alexa will allow customers to control their appliances — changing the temperature on an air conditioner without leaving the sofa, for example.

Now there’s progress for you — progress toward the further coach-potatoing of America, perhaps, but progress. Naturally, there’s a downside for Sears:

In partnering with Amazon, Sears is looking to expand its reach and grow the Kenmore nameplate. However, the move is a double-edged sword, because it also gives shoppers another reason to avoid heading to a Sears store.

But hey — in the brave new Amazonian jungle, there’s even an upside to the downside!

Appliances are one of the categories that have helped draw customers. Just last month, Sears opened a store — the first of its kind for the company — that only sells mattresses and appliances. Plans are also underway to open additional freestanding Sears stores dedicated to these two categories — what Sears has called “two of its strongest.”

“This is consistent with Sears’ aim of becoming more of a remote seller of strong brands without the encumbrance of expensive real estate,” GlobalData Retail Managing Director Neil Saunders told CNBC. “The move makes sense as it puts Sears’ brand products where customers are shopping and gives them a better chance of selling.”

“That said, in the short term it may create even fewer reasons to visit Sears’ shops, which could put further pressure on that side of the business,” Saunders added. “It also puts Sears into a marketplace which is very price competitive and where fulfillment costs are high; this is something that may be challenging for margins.”

Translation: Sears is doomed, but this will prolong the death throes for a while longer, while the last generation of Sears execs can pull the cords on their golden parachutes.

Now, in many ways, Amazon is the logical successor to Sears, which invented the concept of the department store and, through its mail-order catalog, delivered goods and goodies across a rapidly expanding America; you could even buy your house out of a Sears catalog.  On the other hand, there’s an important difference: with Sears you could pay C.O.D.; with Amazon, you either use a credit card (at 18% interest) or you’re out of luck. Do business in cash? Tough. Like to avoid finance charges? Too bad, unless you pay off your balances every month. Don’t want to go into debt over that irresistible offer Alexa just chirped to you? Fuhgeddaboutitt.

Meanwhile, the FTC is sniffing around Amazon’s business practices:

As part of its review of Amazon’s agreement to buy Whole Foods, the Federal Trade Commission is looking into allegations that Amazon misleads customers about its pricing discounts, according to a source close to the probe.

The FTC is probing a complaint brought by the advocacy group Consumer Watchdog, which looked at some 1,000 products on Amazon’s website in June and found that Amazon put reference prices, or list prices, on about 46 percent of them.

An analysis found that in 61 percent of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous 90 days, Consumer Watchdog said in a letter to the FTC dated July 6. Following receipt of the letter, the agency made informal inquiries about the allegations, according to a source who spoke on background to preserve business relationships.

This can’t be good. Enough alarms have been set off by Amazon’s tender for the Leftist sacred cow of Whole Foods, its new partnership with Sears, and its entry to the meal-kit market to finally get the attention of federal authorities.

The review of Amazon’s discount pricing is an indication the FTC is taking a serious look at the e-commerce company’s agreement to buy Whole Foods, a deal that critics say could give Amazon an unfair advantage. Consumer Watchdog argued that the deceptive list prices make Amazon prices look like a bargain, and asked the FTC to stop Amazon from buying Whole Foods while the deceptive discounting is occurring.

The FTC plays a dual role of probing charges of deceptive advertising and assessing mergers to ensure they comply with antitrust law. Amazon said in June that it would buy the premium grocer for $13.7 billion. The FTC’s “Guide Against Deceptive Pricing” warns against using a “fictitious” or “inflated” list price for the purpose of making the price charged look like a bargain.

Amazon settled similar allegations with Canada’s Competition Bureau in January. It paid a fine of C$1 million ($756,658.60) as part of the settlement.

In the background, but very much part of the conversation, is Amazon’s engorgement on the The Washington Post company, a once-honored (Watergate!) news organization that Amazon boss Jeff Bezos essentially bought for parts — the main part being the still-influential newspaper in the Imperial City of Washington, D.C. This isn’t so much of a financial investment as a form of protection money — although Bezos had the chutzpah recently to whine about the deleterious effect of Google and Facebook on print’s advertising base, and to make a pitch to the U.S. government for anti-trust protection:

Four years ago, Amazon founder Jeff Bezos was asked if his company’s “ruthless” pursuit of market share was driving book stores out of business. “The Internet is disrupting every media industry,” Bezos said. “People can complain about that, but complaining is not a strategy. And Amazon is not happening to book selling, the future is happening to book selling.”

The future is also happening to newspaper publishers, and their latest effort to stave off change — a bid for an antitrust exemption — is unlikely to succeed, according to legal experts and Silicon Valley insiders who spoke with CNNMoney.

Earlier this week, the News Media Alliance — which says it represents over 2,000 newspapers in the U.S., including The New York Times, The Washington Post and The Wall Street Journal — said it would begin seeking an antitrust exemption from Congress in order to negotiate collectively with Google and Facebook, which together receive an estimated 60% of all U.S. digital advertising revenue.

Good luck with that — because here comes the Big Dog:

The president here puts his finger on Bezos’ long game in buying the Post — with its long-burnished connections to the deepest of the Deep State swamp creatures, the always-wrong CIA — and its past journalistic credibility. Owning the Post gives him leverage over not only Trump, but the federal government as well; it’s worth almost any amount of money that Bezos wants to spend in order for his to be the public voice of the most important city in the world, a city made of money, dedicated to the pursuit of power, and determined to keep the good times rolling without grubby outside interference from the likes of the nouveau-riche Trump family.

The outer-borough Trump, whose never-lost Queens accent set him apart from his tony mid-Atlantic Manhattan counterparts, may have made his new money in the low-rent residential real estate business, but the D.C. elite came by theirs the old fashioned-ways: through the Old-Ivy higher education networks (Hotchkiss and Andover to Yale and Harvard) and generations of familial political connection and, often, corruption.

Bezos, like Trump, is an outsider. But rather than run for president — that piddling office — he busted up American retailing and grabbed the Post to ensure that trouble from 1600 Pennsylvania Avenue and Capitol Hill would be kept to an absolute minimum. With the example of Bill Gates and Microsoft still fresh in everyone’s memory, why wouldn’t he?

… In a much-­anticipated decision, Judge Thomas Penfield Jackson declared that, by exploiting its monopoly power to try to crush its competitors, Microsoft had violated federal anti-trust laws. Judge Jackson didn’t just buy some of what Boies, representing the United States government, was selling in the case: that Microsoft had illegally used its stranglehold over computer operating systems to intimidate or eliminate its rivals; he bought it almost verbatim.

Was United States v. Microsoft a tough case? a New York Times reporter asked him before the trial. “Not really,” he replied. And Microsoft—having produced reams of self-­incriminating documents and a parade of witnesses who came to court overconfident or inept or deceitful or ill-­prepared—made it easier for him than he ever imagined.

And the best part about Amazon’s climb to monopolistic supremacy? You’re subsidizing it:

Like many close observers of the shipping business, I know a secret about the federal government’s relationship with Amazon: The U.S. Postal Service delivers the company’s boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon.

In 2007 the Postal Service and its regulator determined that, at a minimum,  5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from  Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.
Amazon is big enough to take full advantage of “postal injection,” and that has tipped the scales in the internet giant’s favor. Select high-volume shippers are able to drop off presorted packages at the local Postal Service depot for “last mile” delivery at cut-rate prices. With high volumes and warehouses near the local depots, Amazon enjoys low rates unavailable to its competitors. My analysis of available data suggests that around two-thirds of Amazon’s domestic deliveries are made by the Postal Service. It’s as if Amazon gets a subsidized space on every mail truck.
Enjoy your “savings” and “convenience,” folks. After all, you’re paying for it — boy, are you ever.

Why musicians are so angry…

…at the world’s most popular music streaming service

Slide09
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.