Friday, August 15, 2014

The Internet: Another Book Later, What’s Happening With It Economically?

One more volume on the ultimate effects of online activity hit the metaphorical stands last month.

Astra Taylor, a documentary filmmaker, told us, in The People’s Platform:  Taking Back Power and Culture in the Digital Age, why she thinks online attention and influence are illusory.  She reiterated, and in some cases expanded on, the problems pointed out by Jaron Lanier in last year’s Who Owns the Future?, especially that of millions of content producers paid nothing or next to nothing while a few tycoons get billions, mostly for running advertising along with it.  In those, and in her other Work’s New Age-related observations in the first chapter (to the point where she even mentioned one-way business efficiency as well as globalization and automation as a cause of declining employment), she was right. 

As a solution, Taylor favored, in effect, nationalization of Facebook, Google, and the like, and vastly greater government control of the Internet.  In that, she was wrong.  Unless you are on the far left of the political spectrum, you will agree that government is not well suited to controlling extremely fast-moving, inherently exceptionally entrepreneurial, enterprises.  Yet many of the points she makes on the way to that end are salient.        

So, from both books and beyond, what can we say about the economic effects of online resources?

First, since the Internet has become established, there have been more opportunities for artists, writers, and other content creators to get what looks like publicity, but fewer for them to make significant money.  While some online venues do pay something, it rarely approaches that from full-time work, even at the minimum wage.  Taylor provided one stunning example, of a musician needing to have over 47,000 plays by users of Spotify to match the profit once gathered from selling one long-playing record.  (At that rate, an album as financially successful as a platinum-seller in the age of vinyl would need to be listened to the equivalent of six times by every person in the world.)  One reason for such poor remuneration is the huge supply of content, with, for example, over one million blogs maintained and over one million books published each year by Americans alone.

Second, this volume of content providers means their increased publicity is indeed an illusion.  Their work may be in plain sight, but it is effectively hidden among a vast forest of others.

Third, while ever more people are working full-time at creative endeavors, far fewer of their de facto jobs are meaningfully paid.  In 1976, futurist Herman Kahn addressed the problem of the next phase of work, after extraction, manufacturing, and services, and concluded it would be “quaternary,” or people doing things for their own sake.  It seems this prediction has come true, without it being noticed, as so many authors, other writers, singers, musicians, video producers, painters, and so on are in effect doing just that.

Fourth, making creative products has never been so decentralized, yet revenue from them has never been so centralized.  Lanier wrote about one of the most watched You Tube contributors, with over one billion video views, earning about $200,000 per year.  That is certainly good money, but when considering she is in the best-paid five or so out of hundreds of millions, it isn’t impressive at all, and, after seeing that half of American physicians earn more, it becomes an indictment of the level of prosperity the digital economy is actually bringing.  As Lanier estimated that fewer than 1,000 musicians – a number dwarfed by those playing for symphony orchestras in many individual states – are earning what could be called a living by selling their work online, it is clear that there are not many on the Internet in the middle income range either.                      

Fifth, an ever-increasing number of people, having become aware of the economic facts above, are, instead, working toward careers assisting content providers.  In the writing world they are publicists, editors, book designers, “book shepherds,” and a plethora of other advisors.  As with content providers, though, there are just too many of them, so the vast majority gets nowhere or almost nowhere.

Sixth, the amount of online advertising on popular sites is increasing dramatically, not only year by year but month by month.  Compare the number of banner ads, pop-up messages, and now even auditory sales pitches you come in contact with on eBay, Facebook, and The Huffington Post, just to name three.  If users are reaching saturation, the sites’ managements have not shown that they know that, and most likely the amount of advertising, an issue Taylor also discussed, will double, triple, or quadruple within the next year or two. 

Seventh, and most disturbing, the great bulk of money most Americans have and earn is from pre-digital sources, namely from producing and selling tangible things in the past and present.  The online economy, for most users, is not only cashless but moneyless, with little of it changing hands.  Yet the work people put into their creative efforts is as real as ever.  So, the United States, ready or not, is already moving from paying service jobs to nonpaying quaternary ones.  How will we deal with that?          

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