How to Prevent “Move Fast and Break Things” From Breaking You

More than most people, Jonathan Taplin has seen firsthand how the rise of digital behemoths like Google and Facebook has irrevocably transformed the life of artists and musicians.

A former tour manager for Bob Dylan and the Band and a movie producer for Martin Scorsese, Taplin has become an expert in digital media, and has observed how the original decentralized vision of the internet in the 1990s has morphed into an industry controlled by monopolistic companies that wield inordinate influence over the future of music, film, television, book publishing, and journalism. This concentration of power has decimated those industries—newspaper and music revenues have plummeted 70% since 2001, while Google’s YouTube pays for only 11% of the total streaming-audio revenues received by artists though it controls 60% of the streaming-audio business, according to Taplin.

Taplin, who now spends his time focused on the challenges that new methods of distribution present to creative types, sits on California’s Broadband Task Force and is the director emeritus of the USC Annenberg Innovation Lab. He just came out with a new book, Move Fast and Break Things whose subtitle sums up his thesis with a punch to the gut of Silicon Valley’s self-righteous posture: “How Facebook, Google, and Amazon Cornered Culture And Undermined Democracy.”

This interview has been lightly edited for clarity and length.

Fast Company: Reading your bio, I was struck by the fact that you co-produced one of my favorite movies, Wim Wenders’s Until The End of the World. And now I need to see it again, because I totally forget how everyone carries around these handheld screens and can’t help getting lost in watching old videos from their past. That movie came out over 25 years ago, and it was so prescient.

Jonathan Taplin: We’re trying to get the studio to release the full five-hour version—Wim and I are trying to get the long version of it released. They’re open to it. We have to have a negotiation.

FC: What prompted you to write this book?

JT: Ironically, it was at a Fast Company conference back in 2012, where I was debating Alexis Ohanian of Reddit about artists’ rights. And he was saying that artists don’t have the right to make money from recorded music but to make money as live performers. And he was so proud of how he gets all this music for free. So I told him the story of Levon Helms, who was literally fighting for his life while this conference was going on. He got throat cancer. When Napster arrived, all those royalties took a hit and that very point he got throat cancer. And he didn’t even have enough money to pay for health insurance. Some friends got together and organized what became known as the Midnight Rambles, and put on shows in his barn and people would pay some money, and that sustained him for a while. And then he died. After he died, there was a benefit for his wife. And it seemed so unfair.

And here you have [Alexis] saying that artist should make money as they did in the 18th century. Meanwhile, we have 5 billion smartphones in the world, and he’s telling me we can’t make money off of that? It’s not like there isn’t money available.

And I looked at it and saw that what happened was that the big monopoly platforms were getting all the money. On the Amazon side, they’re what’s known as a monoposony [a market situation in which there is only one buyer], as the middle man forcing lower prices. Essentially, the artists got screwed. With the advent of YouTube and other streaming services, revenue for musicians has fallen 70%.

FC: I was reading somewhere that Daft Punk only got something like $13,000 from Spotify for “Get Lucky,” which was streamed literally tens of millions of times.

JT: Yeah, that’s right. If you had a song that had a million downloads on iTunes, you would get $900,000. On YouTube, you’d get $900.

It just became clear to me that these three companies, Google, Facebook, Amazon, have such a dominant role—Amazon has 75% of the book business—that in any normal society these would be considered monopolies and we would want to do something about it.

But that’s not how they feel. Peter Thiel says that competition is for losers. It came out of a incredibly libertarian point of view that Thiel, Bezos, and Larry Page all embraced, that this digital transformation only works if there’s no regulation and no taxes. And that attitude has had a huge impact. Jeff Bezos put 2,800 bookstores out of business … It’s made it very hard to make a living if you’re creating content. Authors are getting less money and book publishers have been devastated. In journalism, over half the journalists are out of the business.

Jonathan Taplin [Photo: courtesy of Hachette Book Group]

FC: How is it impacting film and TV?

JT: The same piracy problems that existed in the music business are going to infect the film and TV business. HBO has a huge piracy problem: Half the viewers of Game of Thrones are not paying for it. The other problem? The whole fake news situation could not exist without Facebook and a Google AdSense account. Those kids in Macedonia making $6,000 a week, they had two tools—a Facebook page and a Google AdSense account. And that was enough to enable them to create this whole ecology. Now they’re starting to face pushback from advertisers over fake news and other content. Proctor & Gamble is just not interested in having ads next to ISIS videos.

I’m going to Nashville tomorrow to talk to a reporter at the big local paper and he says, “Only in the last four years am I being judged by how many clicks and likes I get. This is all new to me, and I don’t like it. And I have to write stuff that is essentially clickbait.” And it’s happening all over. News organizations get more than 50% of their traffic from Facebook.

FC: I strongly feel that the obsession with clickbait has helped create this distrust in the media. When even the Washington Post is doing clicky and hyberbolic headlines, people get turned off. They end up clicking but then they’re annoyed. They don’t want to be told what to think or what to feel—they just want the straight news.

JT: That’s why the second part of the book’s title is “undermining democracy.” One way is exactly what you talked about. If nobody believes anything, then there’s no institution, whether the New York Times or Washington Post or Breitbart, that anyone has any trust in—and people throw them all in the same bag.

And the second problem is that when you have so much monopoly power, you also have political power. The FTC was going to sue Google because it was killing services like Yelp, because when you search for something it would push you to the Google version of Yelp. And then the political connections put an end to that. People would make the argument that Eric Schmidt was essentially Obama’s chief of staff. The CTO of the White House was from Google. The regulatory capture was stunning and the politicians overruled the [FTC] staff. That’s political power.

And the third thing, as [former Obama budget director Peter] Orszag and [former chairman of Obama’s Council of Economic Advisers Jason] Furman write, these big companies have also helped drive more economic inequality. If the top five corporations in the country are all tech companies, and the people who run them own gigantic shares of stock, it’s going to lead to economic inequality.

FC: Isn’t that always the case? That the CEOs of the biggest corporations, whether it’s GM or Google, will have lots of power.

JT: It’s different now. Take Rex Tillerson, when he ran ExxonMobil. If he owned 1% of the company, I would be shocked. The CEO of GE owns maybe 1% of the stock. But Mark Zuckerberg owns a huge chunk of Facebook, Jeff Bezos owns a giant share of Amazon.

FC: It’s also so different because the classic giants employed so many more people. Walmart has 2.2 million employees, GM has a million, while Apple and Google have much smaller workforces. That increases income inequality because they’re worth billions, but they’re in these small enclaves in Silicon Valley and that wealth isn’t spread out across the country. And it also would seem to make the tech giants less aware of what’s happening in small towns in the Rust Belt.

JT: Think about the number of people that GM hires—close to a million. Facebook has a far higher market cap than GM, and yet Facebook’s workforce is less than 20,000 [actually, 17,048 full-time employees as of December 2016].

Think about the amount of capital and the amount of net worth concentrated in Silicon Valley, it’s not spaced out anywhere. Yes, Amazon has warehouses everywhere, but the people who work there don’t earn much and they have to move from one place to another in a certain amount of seconds [referring to how warehouse workers are timed on certain tasks they perform]. A few years ago, it was so hot in one fulfillment center that they had to park ambulances outside to treat people who fainted instead of putting in AC.

It is not helping society at large if there’s only a few places where this wealth is stored.

FC: Do you think that Silicon Valley can help bridge the digital divide?

JT: Not sure if that really helps. If you’re Mark Zuckerberg, you go on a PR tour and get your picture taken in the Deep South and pretend you know what’s really going on. Quite frankly, their biggest worry is PR.

They’ve held on to this techno-determinism. Nobody has questioned their view of where the world is going, even to the level of asking, “What’s wrong with having robots do everything?” Who’s thinking about what happens when there are no jobs for people who haven’t gone to college? Marc Andreessen says we’ll come up with jobs that they haven’t thought of yet, but I haven’t seen examples of that yet except for people making money off that.

FC: So, what are your solutions to these problems, especially for artists, from musicians to writers to filmmakers?

JT: I’ve talked about resistance to this system. That takes many forms, like musicians insisting that their tunes not be on streaming services. At first, it depends on the ones who really have clout, like Taylor Swift and Beyonce. That’s a start.

Then it moves to the possibility of removing the Safe Harbor provision that allows you to put up anything without anybody’s permission and you can’t sue them. That would make a big difference, taking down the terrorist videos and violent videos. If they had to take responsibility for what was on their platform like any TV station. If that [the Cleveland killing video that was uploaded to Facebook last weekend] happened on any TV station, the FCC would have taken away their license.

And the third thing is antitrust. These people are such market fundamentalists, whenever Google gets in trouble with antitrust, they pay people to say switching costs is zero. That’s nonsense. I have all my data on Google, my calendar in Google—the switching costs are not easy. If Bill Gates spends maybe a billion dollars on Bing and it barely has 4% of the market, what rational person would decide to enter the search business? Maybe there is a natural monopoly. And if that’s the case, then there are other remedies like treating them like a utility and regulating them so.

FC: To get back to this disconnect and the crisis of unemployed coal miners, Silicon Valley’s congressman Ro Khanna recently went to eastern Kentucky where he met with coal miners who are learning to develop mobile apps. Is that a start?

JT: Let’s posit that I’m an autoworker and I’m in my early 50s and I got laid off because I was replaced by a robot. Is Google going to hire me as a coder? I don’t think so. First of all, they’re obsessed with hiring young people. Second thing is, and the election showed, these people in their 50s and 60s whose jobs are gone, they’re screwed by the global economy. And Silicon Valley doesn’t have answers for them.

If you read Thiel, all he cares about is the entrepreneurs. He says that 98% of people don’t have a clue.

It would take some political leadership. I read a quote from [Treasury Secretary] Steve Mnuchin, that he thought it would be 100 years before we have to worry about robots. These people are clueless, surrounded by people trading futures on Wall Street and they don’t realize that this isn’t 50 years ago. This is 5-10 years away when the autonomous truck business takes away 2 million jobs.

There is hope. There are little signs of resistance everywhere. Last week [it was] reported that the New York Times told Facebook that they wouldn’t be in Instant Articles anymore. They realize that it’s just a trap that Facebook set for them. Once you get hooked on a monopoly, they get to determine how much you’ll get. That’s why a musician gets paid $900 for a million plays on YouTube.

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