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Category: economics

Google: All Your Books Are Belong To Us

Reading Google & The Future of Books by Robert Darnton

My Sunday morning reading started off in one direction and veered suddenly in another. I had been thinking about the position Jason Calacanis put forward on yesterday’s GillmorGang broadcast. Calacanis has recently been lamenting what he believes is the death of blogging. He sees a “race to the bottom” where writers will do anything for ratings. Rather than write a blog, he’s returned to the era of epistolary exchange and combined that with the mailing list. In the limited economy of that form, he finds more of the kind of value he’s looking for.

It’s at that point that I started reading Robert Darnton’s essay ‘Google & the Future of Books‘ in the latest New York Review of Books. Darton begins his essay with a look back at the Enlightenment:

The eighteenth century imagined the Republic of Letters as a realm with no police, no boundaries, and no inequalities other than those determined by talent. Anyone could join it by exercising the two main attributes of citizenship, writing and reading. Writers formulated ideas, and readers judged them. Thanks to the power of the printed word, the judgments spread in widening circles, and the strongest arguments won.

This free flowing economy of thoughts, ideas and conversations was perhaps a Utopian ideal from the beginning:

Far from functioning like an egalitarian agora, the Republic of Letters suffered from the same disease that ate through all societies in the eighteenth century: privilege. Privileges were not limited to aristocrats. In France, they applied to everything in the world of letters, including printing and the book trade, which were dominated by exclusive guilds, and the books themselves, which could not appear legally without a royal privilege and a censor’s approbation, printed in full in their text.

You can easily trace the lineage, the geneology of the idea, from the Republic of Letters to Vannever Bush’s Memex, Ted Nelson and Xanadu, Doug Engelbart and Augmentation, and Tim Berners-Lee and the original World Wide Web.

This is where Darnton hijacked my stream of thought. My desire to explore the political economy of restricted and general systems of epistolary conversation was shoved aside as Darnton revealed his purpose in the essay. He enlightened me to the fact that Google has monopoly ownership of the right digitize our nation’s books. And this of course means that all access will have to go through Google.

Google is not a guild, and it did not set out to create a monopoly. On the contrary, it has pursued a laudable goal: promoting access to information. But the class action character of the settlement makes Google invulnerable to competition. Most book authors and publishers who own US copyrights are automatically covered by the settlement. They can opt out of it; but whatever they do, no new digitizing enterprise can get off the ground without winning their assent one by one, a practical impossibility, or without becoming mired down in another class action suit. If approved by the court—a process that could take as much as two years—the settlement will give Google control over the digitizing of virtually all books covered by copyright in the United States.

Darnton mourns the lost opportunity to create a National Digital Library. As Google search is increasingly the provider of our first hyperlink to click as we enter the World Wide Web; now they will have absolute power over access to all books under copyright. In this Google moves from Soft Power to Hard Power. We choose to use Google’s search engine because it works well for us. If we want to search the nation’s digital library, our Republic of Letters, we will have no choice but to ask Google. Darnton believes it’s too late to change the outcome. I hope he’s wrong.

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Patterns of Distribution: Re-routing the Signal

I was listening to Wolf Blitzer on CNN talking with the captain of the President’s plane, Air Force One. After 9/11, the airplane was fitted with videoconferencing equipment to allow the President to address the nation while in flight. The pilot described a process where the video signal could be sent to the major television networks for distribution to the nation and the world.

If you were designing that distribution pattern today, you’d send the video to YouTube first. Previously, only the the major television, radio and cable networks had the distribution power to reach the nation. To the extent that YouTube can accomodate realtime broadcast and provide an archive for timeshifting, it will become the primary distribution channel for political communication. The media networks will pick up the signal from YouTube for rebroadcast in realtime. They’ll provide context and analysis as a value add, but in that pursuit, they will be competing with a full range of microbroadcasters.

The dominant distribution pattern has been inverted; there were a few people who saw this historical change as it emerged over the last year. Obama, and his team, saw the possibilities of bottom up communication and executed on the insight beautifully. It will be interesting to see how this pattern becomes firmly woven into our culture over the next year.

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Voter Suppression By Proxy

Voter Suppression

Dominic Jones of the Investor Relations Blog sent me a link to ProxyDemocracy.org this morning. We’ve recently seen the power the of the vote in our Presidential elections. We marvel at the power of the community as we vote with our attention and gestures to surface the wisdom of crowds in social media applications. There’s another form of suffrage that is within our reach, but largely ignored. Shareholders have a say in how public corporations are run. One share of stock in a public company gives you a vote.

ProxyDemocracy.org explains it this way:

A company’s stockholders have the legal right to decide important decisions at the companies they own: they elect directors, review aspects of executive compensation, and weigh in on shareholder proposals addressing a variety environmental, social, and governance issues. History has shown that shareholders can use their voting power to create value — both economic and social — at the companies they own.

Whether you invest in mutual funds or individual stocks, you have a say in how things are run. While the recent market crash may have caused you to curse Wall Street and wish a pox on all their houses– if you’d like a say in how our financial institutions are run, a single share of stock gives you the right to vote.

If you’re already a shareholder, are you accepting disenfranchisement? The voting process as it’s currently implemented is a form a voter suppression. Once again, ProxyDemocracy.org:

In practice, it can be hard for investors to exercise their rights and have their voices heard. One important obstacle is information. Shareholders often have a hard time keeping track of when the companies in their portfolio are meeting and what the ballot items mean. Mutual fund owners, whose funds vote on their behalf at the companies in the fund portfolio, rarely know how their funds are voting and thus have no way to be sure that their interests are being represented.

Imagine, for instance, that you’d like a say in the future of the auto manufacturers in Detroit. Perhaps you’d like to have a say in how health insurance and HMOs are run. Now you can certainly vote by choosing to spend or not spend your hard-earned dollars on the products of these corporations. You can stand on a soap box on a street corner and shout at the passing crowd. Or you can buy a single share of stock and express your opinion as a shareholder. Now imagine the power of the swarm, of Twitter, FriendFeed and Facebook.

ProxyDemocracy provides tools to help investors overcome these informational hurdles and use their voting power to produce positive changes in the companies they own. We help shareholders vote their shares by publicizing the intended votes of institutional investors with a track record of shareholder engagement. We help mutual fund investors understand the voting records of leading funds, making it possible for them to purchase funds that represent their interests and pressure those that don’t.

We’ve seen the power of bottom-up democracy, but it’s not only in our government that this approach can be effective. Big corporations and institutional investors will a happily vote for you, and they will vote their own interests.

Clay Shirky talks about the power of organizing without organizations, about the cognitive surplus that we have in abundance today. The tools at our disposal and our expectations have radically changed. Shiky tells this story:

I was having dinner with a group of friends about a month ago, and one of them was talking about sitting with his four-year-old daughter watching a DVD. And in the middle of the movie, apropos nothing, she jumps up off the couch and runs around behind the screen. That seems like a cute moment. Maybe she’s going back there to see if Dora is really back there or whatever. But that wasn’t what she was doing. She started rooting around in the cables. And her dad said, “What you doing?” And she stuck her head out from behind the screen and said, “Looking for the mouse.”

Here’s something four-year-olds know: A screen that ships without a mouse ships broken. Here’s something four-year-olds know: Media that’s targeted at you but doesn’t include you may not be worth sitting still for. Those are things that make me believe that this is a one-way change. Because four year olds, the people who are soaking most deeply in the current environment, who won’t have to go through the trauma that I have to go through of trying to unlearn a childhood spent watching Gilligan’s Island, they just assume that media includes consuming, producing and sharing.

Being a shareholder in a public corporation has been a one-way transaction. The tools to make it a highly visible two-way transaction are now ready to hand. They’re here now. And as you think about the investments you’ve made for your retirement, you should be asking yourself, “where’s the mouse?”

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Pungent Gestures

I’ve finally worked my way through last Sunday’s newspapers in time for this Sunday’s to fill up the in-basket. Of particular note was Peter Aspden’s column in the Weekend Financial Times. He picks up on a number of themes that have been surfacing in recent conversations. Aspden observes that culture and economies run in cycles, and that a down economy may signal a return of a more pungent cultural scene.

In a high economy, capital replaces labor in the machinery of cultural production. Works are primarily created as commercial ventures; they have a business plan, an expected return on investment, and a polished level of disconnected technical professionalism.

Aspden identifies the trends he’ll be looking for in the new year:

  • Cultural Promiscuity (global silk-road type connectivity and mashups)
  • Pungent Pop Culture, a return to seriousness
  • Profundity and complexity welcomed once again
  • The return of Art Cinema (and a farewell to cinematic infantilism)
  • Art Galleries returning to the sterner business of moving hearts and minds

In a down economy, labor replaces capital in the cultural work product. The industrial pop culture complex will turn to high glamor / high gloss products as they did during the great depression. It’s a formula that depends on owning the means of production, large concentrated audiences, low prices and controlled distribution.

Price of Movie Tickets
1940     $0.24
1939     $0.23
1936     $0.25
1935     $0.24
1934     $0.23
1929     $0.35
1924     $0.25
1910     $0.07

As means of production has gone digital, and the distribution networks have gone open, the old formulas are harder to pull off. The studios will have to depend on more and more on special effects and simulated realities to generate the requisite buzz– machines replacing humans. The return to a pungent culture is a cyclical event– the classic example for me was Jerzy Grotowski’s Poor Theater.

Theater should not, because it could not, compete against the overwhelming spectacle of film and should instead focus on the very root of the act of theater: actors in front of spectators.

However this move to the digital appears to be a more foundational change, the very axis of the cycle has been radically shifted. While the high end can go ever higher, the field of play has been opened for a new generation of artists. High and low have lost their polar relationship; real connection can happen across the Network through multiple endpoints. The cost of producing high quality digital output continues to go down, while the talent required to produce high quality digital output remains ever the same.

While a film on a large screen in a movie theater isn’t the same as watching on an iPhone or a laptop; nor is a film the same a grand opera at its best. New media will breed new forms– new methods of reading and writing. As the technology falls away in favor of the performance, perhaps we’ll see some of Aspden’s predictions come true. It could be as simple as a camera, some light, three people dancing and some narration– A Band of Outsiders.

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