by Andrew Keen
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 2000.53
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.54 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.”55 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.”56
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.57 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.1 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.2 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.”3
You’ll remember that Paul Simon described Web 2.0 as a “fire . . . for vigorous new growth.”4 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 Perce
nt 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.”5 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.’”6 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.”7
“Winners take all,” mourns Robert Frank about a world dominated by a tiny aristocracy of creative artists.8 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.9
In 2013, the top 1% of music artists accounted for 77% of all artist-recorded music income while 99% of artists were hidden under what one 2014 industry report, titled “The Death of the Long Tail,” called “a pervasive shroud of obscurity.”10 This has been caused in part by the increasing monopoly of online music retail stores like iTunes and Amazon and partly by consumers being subjected to the tyranny of an overabundance of choice. This income inequality in the industry is reflected in live music, too, where, between 1982 and 2003, the revenue share of the top 1% of touring acts more than doubled, while the revenue share of the bottom 95% of artists fell in the same period by more than half. As the Guardian’s Helienne Lindvall concludes about these trends, “not only is the wider middle class in society shrinking, so is the musician middle class.”11
The most serious casualty of the digital revolution is diversity. This one percent rule is now the dominant economic feature of every cultural sector. According to Jonny Geller, the CEO of a prominent British literary talent agency, the old Pareto law of 80 percent of sales coming from 20 percent of writers is now “more like 96 to four.”12 Meanwhile, a 2014 British study revealed that 54% of conventionally published writers and almost 80% of self-published authors make less than a $1,000 a year from their written work.13 The most serious casualty of the one percent economy in publishing is the disappearance of the “midlist,” which, according to Colin Robinson, the co-publisher of the New York–based print-on-demand publisher OR Books, “comprise[s] pretty much all new titles that are not potential blockbusters.”14 What this means, Robinson warns, is that publishers can no longer afford to gamble on “obscure” or “offbeat” titles—thereby, once again, narrowing rather than broadening the variety of young or new writers in whom they invest.
It’s affecting the e-learning industry, too, where superstar teachers, with instant access to audiences of millions of students, are establishing a two-tiered economy in one of the historically most egalitarian of professions. For example, in The Smartest Kids in the World, Amanda Ripley describes a new breed of “rock-star teachers” in Korea like Andrew Kim, who earns $4 million a year from an annual online audience of over 150,000. “The Internet,” Ripley explains about Kim’s success, “had turned his classes into commodities.”15 Today’s hysteria around massive online open courses (MOOCs) threatens to do the same to university education, which is one reason why, in 2013, the philosophy department at San Jose State University balked at including materials from the Harvard academic superstar Michael Sandel in their online courses.16 One star academic, the Princeton sociologist Mitchell Duneier, even cut ties with the Silicon Valley–based MOOC provider Coursera because of his fear that these kind of winner-take-all classes would undermine public higher education.17
As the educationalist William Deresiewicz notes, MOOCs are “not about democratizing education. That is just their cover story.” The truth, Deresiewicz argues, is exactly the reverse. “They’re about reinforcing existing hierarchies and monetizing institutional prestige,” he warns. “The kids at Harvard get to interact with their professors. The kids at San Jose State get to watch the kids at Harvard interact with their professors. San Jose looks worse than before; Harvard looks even better.”18
These inequalities are also reflected in the type of students taking MOOCs. Researchers at the University of Pennsylvania who looked at 400,000 Coursera students found that most people enrolled in taking these MOOCs were men. “So much for the borderless, gender-blind, class-blind and bank account–blind MOOCs,” notes the technology writer Jessica McKenzie. “If anything, this shows that MOOCs are widening the educational divide, not leveling the playing field.”19
This unequal economy is particularly pronounced in online journalism, where, amid the massive layoffs at regional newspapers, highly paid American reporters like Nate Silver, Ezra Klein, Matt Taibbi, and Glenn Greenwald represent what Emily Bell, the director of the Tow Center for Digital Journalism at Columbia University, calls “a one percent economy.”20 Ironically, for all the talk of how the Internet was supposed to diversify the news industry, the end result of the combination of a one percent economy and massive layoffs is less diversity in the newsroom, with minority employment for American journalists down almost 6% between 2006 and 2012.21 And as Bell also notes, the most recent wave of venture-capital-funded “personal brand” journalist startups are almost all supporting white male superstars like Greenwald, Taibbi, Silver, and Klein.22
But the most damaging discrimination is against paid work. Apart from a few highly paid superstars and winner-take-all venture capital–backed websites like Buzzfeed and Vice, everybody else is participating in what Guardian columnist Suzanne Moore describes as a “kind of sophisticated X Factor,” in which we all post our online content for free and hope it will be the next viral success story.23 On the Internet, most of us are perpetual interns. As the author Tim Kreider notes, this lottery is a consequence of an information economy “in which ‘paying for things’ is a quaint discredited old twentieth-century custom, like calling people after having sex with them.”24 This one percent economy forces aspiring artists like the young singer Alina Simone to become startup entrepreneurs of the self and focus on the promotion of their own personal brand rather than their creative work. “What I missed most about not having a label wasn’t the monetary investment, but the right to be quiet, the insulation provided from incessant self-promotion,” Simone writes. “I was a singer, not a saleswoman. Not everyone wants to be an entrepreneu
r.”25
None of this impacts Silicon Valley’s gilded class. Some—like Google’s Eric Schmidt, Facebook’s Sheryl Sandberg, and LinkedIn founder Reid Hoffman—are also part of that tiny elite of best-selling celebrity authors. Indeed, Hoffman’s 2012 bestseller was titled The Start-up of You and advised everyone to think about their professional life as if it were an entrepreneurial project. But for those insiders who didn’t get multimillion-dollar book contracts to write about their own success, there’s always the Huffington Post—a platform designed for celebrities to post free content that peddles their own agendas, personal brands, or companies.
If there’s a single online media outlet that captures all the hypocrisy of the digital revolution, it’s Arianna Huffington’s online creation—a publication that, like its self-promotional proprietress, dresses itself up as a crusading newspaper, but actually just offers social media hotshots, superstar marketing consultants, and other one percent friends of Arianna a free platform to shamelessly promote themselves. As Peter Goodman, the former global editor of the Huffington Post, wrote to Arianna Huffington before very publicly quitting his job in March 2014, “there is a widespread sense on the team that the HuffPost is no longer fully committed to original reporting; that in a system governed largely by metrics, deep reporting and quality writing weigh in as a lack of productivity.”26 What Goodman calls “original reporting” has, according to the media reporter Joe Pompeo, been replaced by a Buzzfeed-like focus on social and mobile platforms where “people love sharing stories about health and meditation and exercise and sleep.”27
“The unfortunate fact is that online journalism can’t survive without a wealthy benefactor,”28 mourns the GigaOm columnist Mathew Ingram. And I’m afraid the same is increasingly becoming true of many unprofitable bookstores, too, which are desperately relying on crowdfunding sites like Indiegogo or Kickstarter to raise money from benefactors.29 And, of course, there is no lack of rich benefactors from Silicon Valley who are buying up the very old media that their revolution has destroyed. The poachers are now the gamekeepers. There is Mark Zuckerberg’s Harvard roommate, Chris Hughes, a cofounder of Facebook, who bought the venerable New Republic magazine in 2012. Then there’s Amazon right-libertarian CEO Jeff Bezos, who acquired the equally venerable Washington Post newspaper in 2013, no doubt giving all its reporters a required reading list including The Innovator’s Dilemma and The Black Swan. Meanwhile, multibillionaire eBay founder and chairman Pierre Omidyar has set up his own new Internet publishing empire, First Look Media, and used his massive wealth to hire superstar investigative journalists like Glenn Greenwald and Matt Taibbi to peddle Omidyar’s own left-libertarian agenda.