The Internet Is Not the Answer (21 page)

Most of all, however, what the
Guardian
calls Silicon Valley’s “most striking mantra,” its “culture of failure,” has come to the recorded music business.
⁴⁷
The latest attempts by Silicon Valley to reinvent the industry are legal streamed subscription services like Pandora, Rhapsody, and Silicon Valley’s current darling, Spotify. Backed not only by Sean Parker but also by Peter Thiel’s Founders Fund, Spotify, which has raised over $500 million and was valued in late 2013 at $4 billion,
⁴⁸
is a virtual Berwick Street. It has aggregated most of the world’s music into a single service, offering more than 20 million songs as either a free advertising-supported service or for a $5 or $10 monthly all-you-can-eat rate. But while Spotify may be Santa Claus 2.0 for its over 40 million mostly nonpaying users, the still unprofitable subscription service (at least in mid-2014)
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is an absolute disaster for musicians.

As with YouTube, the problem is that Spotify exploits creative talent to spoil consumers with either free or unnaturally low-priced content. The company may have raised more than half a billion dollars and have amassed 10 million paid subscribers, but very little of that cash is going back to artists, with only an average of 0.6 cents per stream being paid to the musician. Former Talking Heads guitarist David Byrne, who believes that Internet companies are sucking all creative content out of the world, notes that for a four-person band to each make the US minimum wage of $15,080, they would need to get a quarter of a trillion plays for their music on Spotify.
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Radiohead star Thom Yorke put it more crudely. “New artists get paid fuck all with this model,” he complained, as his pulled his solo songs and all his Atoms for Peace music from Spotify.
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Byrne and Yorke are far from alone in rejecting the Spotify model. Other notable artists who have openly spoken out against the exploitative streaming service include Aimee Mann, Beck, the Black Keys, Amanda Palmer, will.i.am, Zoe Keating, and Pink Floyd.
⁵²

It’s not just Spotify that is the problem. Similar streamed subscription services like Pandora are equally exploitative. For example, in November 2012, the Grammy–nominated hit songwriter Ellen Shipley reported that one of her most popular tracks got played 3,112,300 times on Pandora and she got paid a measly $39.61. “Pandora talks a great deal about their need to make a profit and to survive . . . but they couldn’t care less about the fate of those creators who already are hurting so badly, they are dropping out of music,” Shipley wrote, noting the 45% drop in the number of professional songwriters since 2000.
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Like the newspaper industry example, free or radically underpriced streamed music forces artists to rely more and more heavily on advertising business models to survive. As David Carr explains, “In a streamed world where music itself has every little value, selling out is far from looked down upon, it’s the goal.” At the 2014 South by Southwest (SXSW) music festival, Carr noted that while labels were invisible, “big brands owned the joint,” sponsoring all the top performers.
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Everyone at SXSW was singing for their supper. Jay-Z and Kanye West performed on behalf of Samsung, Coldplay shilled for Apple iTunes, and the Dorito-sponsored Lady Gaga was “smeared in barbeque sauce and mock-roasted like a pig and then . . . bit the tortilla chip that fed her.”
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But we can’t blame Lady Gaga or Doritos for this sad state of affairs, Carr says. It’s a consequence of what he satirically calls a “perfect world” in which “the consumer wants all the music that he or she desires—on demand, at a cost of zero or close to it.”
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In 1989, I was profoundly wrong about the rosy future of the music business. David Byrne is right. Over the last twenty-five years, the Internet has indeed sucked much of the musical creativity out of the world. In 2008 alone, there were 39,000 jobs lost in the British creative economy.
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Today, in 2014, the prospects of young musicians or entrepreneurs breaking into the industry are dramatically worse than they were twenty-five years ago. Back in 1989, we all wanted to work in the music business; but today, in 2014, the new new thing is multibillion-dollar companies like Spotify and Pandora that are destroying the livelihoods of independent musicians.

Yes, the Internet did change
everything
in the music industry. Music is, indeed, now abundant. And that’s been the catastrophe of the last quarter century.

CHAPTER SIX
THE ONE PERCENT
ECONOMY

An Abundance of Stupidity

My own epiphany about the Internet’s disastrous impact on culture is well documented. In the fall of 2005, I was invited to a weekend event called FOO Camp. FOO, as I mentioned earlier, is an acronym for “Friends of O’Reilly” and it refers to that same Tim “How I Failed” O’Reilly who owned and operated the profitable Web 2.0 meme and is now, according to his modest Twitter profile, “helping the future unfold.” FOO Camp is O’Reilly Media’s annual slumber party in which the media mogul invites a couple of hundred illustrious geeks—Silicon Valley’s antiestablishment establishment—to spend a weekend on the idyllic grounds of his Sonoma, California, wine country headquarters to celebrate how the Internet is radically disrupting the world.

Just as Michael Birch presented the Battery as an unclub, FOO Camp described itself as an “unconference conference”—the ideal event, of course, for the Web’s unestablishment. In practice, this meant that the camp was an entirely unstructured event whose monotonously repetitive agenda was set by its self-aggrandizing participants. Like the Internet itself, the only FOO Camp rule was that there were no rules. Anyone could give talks about anything they liked. And, mirroring the Internet’s own echo chamber culture, this resulted in a cacophonous uniformity of opinion.

The real abundance at FOO Camp were of the words
media
and
democracy.
Phrases like “media democracy,” “the democratization of media,” and “democratic media” were chanted ad nauseam by the young white male FOO Campers. The speeches—or the “conversation,” to use the digitally correct term—were all variations upon a single theme.
What can help us create a better world in the digital age?
everyone at FOO Camp asked. The Internet was the answer, they all agreed, because it “democratized”
media, giving a voice to everyone, thereby making it more diverse. By “disintermediating” traditional media, FOO Campers all agreed, Web 2.0 companies like YouTube, Flickr, Blogger, and Wikipedia circumvented what they pejoratively called “the gatekeepers”—those guys like Larry Kay, my old boss at
Fi
, who had historically controlled the printing presses, recording studios, and movie studios.

What was particularly annoying about FOO Camp was how all the powerful, wealthy campers—from Silicon Valley investors to entrepreneurs to technologists—assumed that their self-interest in transforming the Web into a platform for user-generated content automatically squared with the general interest of everybody else in the world. Like most revolutionaries, they had appointed themselves as the emancipators of the people, without bothering to check with the people first. There was no real conversation at FOO Camp. Irrespective of the question, the Internet was always the answer.

FOO Camp was my wake-up call to the absurdity and hypocrisy of the Silicon Valley unestablishment. It triggered my 2007 book,
The Cult of the Amateur: How Today’s Internet Is Killing Our Culture
, in which I argued that this supposed “democratization” of media had benefited a small minority of technology insiders rather than the majority of people.
A
thriving twentieth-century music, video, and publishing economy, I argued, was being replaced by multibillion-dollar monopolists like YouTube, which charged creators an impossibly high 45% feudal tithe for the right to advertise on its platform.
The Cult of the Amateur
was a defense of the golden age of media—an economy in which there were paid jobs for everyone from editors, cameramen, fact checkers, and sound engineers to musicians, writers, and photographers.

Some critics accused me of being an elitist, claiming that I was defending a privileged class of professional journalists, publishers, and filmmakers. But if defending skilled labor is “elitist,” then I wear that badge with honor. Besides, these critics conveniently forgot that the old media economy is critical to the prosperity of millions of middle-class workers. They overlooked the fact that in the European Union, copyright-intensive industries account for nearly 9.4 million direct and indirect jobs and contribute nearly 510 billion euros a year to the European GDP.
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They failed to take into account the fact that the US television and movie industries in 2011 supported 1.9 million jobs that generated $104 billion in wages.
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Above all, these critics conveniently forgot that, as President Obama’s commerce secretary Penny Pritzker told a roomful of Nashville music executives in 2013, “instead of viewing a new album as an expense to our economy, we now view it as an asset because it supports jobs and generates revenue for years to come.”
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You’ll remember that Paul Simon described Web 2.0 as a “fire . . . for vigorous new growth.”
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Today, in 2014, almost a decade after I attended FOO Camp, the smoke has begun to clear from this fire. But what Simon identified as the “devastation” of this digital conflagration remains all around us. We are going backward now rather than forward. Instead of “new growth,” what we are seeing is the resurrection of a pre-industrial cultural economy of patronage determined by the whims of a narrow economic and cultural elite rather than by the democracy of the marketplace.

Just as the digital revolution destroyed Berwick Street’s Golden Mile of Vinyl and the Kodak offices and factories in downtown Rochester, so it’s also knocking out the heart of a creative economy that once employed many thousands of professional, middle-class workers. It’s the same winner-take-all, donut-shaped economy that is reshaping the rest of twenty-first-century society. Average is over in media. The digital revolution, with its abundance of online access and content, has been presented by Silicon Valley as enabling our great emancipation from a media supposedly run by a clique of privileged white men. But the Internet is actually compounding this inequality and deepening the chasm between this handful of wealthy guys and everyone else.

The One Percent Rule

Web 2.0 was supposed to democratize media and empower those historically without a voice. So, yes, anyone can now post on Twitter, Tumblr, and Pinterest. Some of us may even win the lottery and get retweeted or friended by what George Packer memorably described as one of the “celebrity monuments of our age.”
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And, yes, we can post our ideas on the
Huffington Post
, our videos on YouTube, our photos on Instagram, and our music on Facebook. But there’s no money in any of this for the vast majority of young writers, musicians, photographers, journalists, or filmmakers. It’s mostly a gift economy where the only profits are being made by a tiny group of increasingly monopolistic Internet companies.

Yes, there remain successful digital publishing networks that actually pay their contributors—such as Buzzfeed, the listicle-dominated, highly trafficked “news” site that raised $50 million from Andreessen Horowitz in August 2014 and that the writer Heather Havrilesky describes as the “apotheosis of American trivia-focused escapism, served up with an overabundant garnish of ‘trashy’ and ‘cute’ and ‘yaaass.’”
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And yes, there still are creative superstars—Malcolm Gladwell and J. K. Rowling in books, Lady Gaga and Eminem in music, Glenn Greenwald and Andrew Sullivan in investigative journalism—who are able to greatly profit from their talent. But in our networked economy of abundance, there is a growing chasm between this tiny group of global superstars and everybody else. Harvard Business School professor Anita Elberse defines this as a “blockbuster” economy, which, she says, is exaggerated by the Internet’s abundance of content. “In today’s markets where, thanks to the Internet, buyers have easy access to millions and millions of titles,” she argues, “the principle of the blockbuster strategy may be more applicable than ever before.”
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“Winners take all,” mourns Robert Frank about a world dominated by a tiny aristocracy of creative artists.
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It’s the opposite of Chris Anderson’s profoundly flawed theory of the long tail, with its nostalgic guff of a cottage industry of middle-class cultural producers all making a reasonable living from the digital economy. The more abundant the online content, the more dramatic the contrast between the massive success of a few hits and the utter obscurity of everything else. Elberse notes, for example, that of the 8 million tracks in the iTunes store during 2011, 94%—that’s 7.5 million songs—sold fewer than a hundred units, with 32% selling just a single copy. “The recorded-music tail is getting thinner and thinner over time,” Elberse concludes about a music industry dominated by fewer and fewer artists.
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