0:01

I think this is a moment for a

0:03

strong steady hand on Radiolab. I'm the Secretary

0:05

of Defense and former director of the CIA.

0:08

We talked to national security expert Leon Pena.

0:10

If we have to go after terrorists in

0:12

any country. About square

0:16

dancing. It came out of nowhere.

0:21

American tradition or a

0:23

whitewashed plot. Birdie in

0:25

the cage from Radiolab. Listen

0:27

wherever you get podcasts. When

0:30

in despair over your social

0:32

media platform, take comfort because

0:35

digital domination is built on

0:37

sand. It just takes one good

0:39

competitor like TikTok or one big

0:41

scandal like a live stream mass

0:44

shooting or one big privacy debacle

0:46

like Cambridge Analytica. And it can

0:48

tip. From WNYC in New

0:50

York, this is On the

0:52

Media. I'm Brooke Gladstone. This

0:54

week, the life cycle of

0:57

internet platforms from electrifying birth

0:59

to spiraling decrepitude. Or as

1:01

you'll hear bleeped in

1:03

poopification. I think the example

1:05

that everyone can relate to here is

1:08

Twitter. Twitter has gone from indispensable to

1:10

completely dispensable for larger and larger groups

1:12

of people very quickly. And so when

1:14

that happens, when the platform tips over

1:17

and becomes a useless pile of sh**,

1:19

which is the end of in sh**ification,

1:22

then it starts to thrash. And

1:24

in thrashing, there's people power.

1:27

It's all coming up after this. From

1:32

WNYC in New York, this

1:34

is On the Media. Micah

1:36

Lowincher's out this week. I'm

1:38

Brooke Gladstone. We've spent hours

1:40

dissecting the anatomy of the

1:43

internet, chronicling concerns about privacy,

1:45

the appeal of connection, our

1:48

willful, woeful walled gardens

1:50

and the fumbled attempts to regulate any of

1:53

it at all. And yet

1:55

we hadn't really been clued into

1:57

the systemic nature of the increasing...

2:00

crappiness of being on, let's

2:02

call it, big digital until now. The

2:04

competition watchdog has opened a formal probe

2:06

into Amazon and Google over concerns that

2:09

they have not been doing enough to

2:11

combat fake reviews on their sites. Two

2:13

San Diego women are suing Amazon in

2:15

a proposed class action lawsuit, claiming Amazon

2:17

prime members who pay $139 a year

2:19

for membership have been misled

2:23

for years regarding shipping times. The

2:25

tech industry changing the world as

2:27

it does in mysterious ways, is

2:29

bound to spark editorial tongue clucking

2:31

and laments about how it's just

2:33

not the way it used to

2:35

be. But this is different. Those

2:38

cluckers are right. Corey

2:40

Doctorow, journalist, activist, and the

2:42

author of many books, most

2:44

recently the internet con and

2:46

the bezel, a science fiction

2:48

crime thriller has tracked this

2:50

phenomenon for a long while.

2:53

Corey was our guide for this hour when

2:55

we first aired it last spring. In

2:58

it, he explained the process whereby

3:00

going online grows ever less rewarding

3:02

and ever more repellent.

3:05

To start things off, this trend

3:08

should have a name. Luckily, Dr.

3:10

O coined one. He calls it

3:12

in bleepification. It's absolutely

3:14

accurate and totally not allowed

3:17

on broadcast radio. And notification

3:19

is the death cycle of

3:21

platforms and platforms are the

3:23

native form of

3:25

the internet. It means you have

3:27

these companies that are really neither

3:29

disciplined by regulation nor by

3:31

competition and who can kind of change the

3:33

rules as they go. Now

3:36

get into the nitty gritty of the

3:38

process, which you managed to compress into

3:40

three distinct steps. Step one, first the

3:42

company is good to its users. So

3:44

think about Amazon. When Amazon started, it

3:46

had a lot of shareholder capital and

3:48

was able to operate at a loss.

3:50

It sold you goods for less than

3:52

they cost. It subsidized the price of

3:54

shipping. It subsidized the price of returns.

3:57

You know, Jeff Bezos, was it like a good natured

3:59

slob? just wanted you to have stuff below cost. Just

4:02

so you know, here's what's hot. Digital

4:04

camera rays are sooner than their end

4:07

tools. We even got the George Morgan

4:09

grill for you. But if

4:11

you need an item that is not hot,

4:15

click on blood pressure monitors and

4:17

tissue-box cozies. The Lord

4:19

take you zen scaffolding. Amazon...

4:21

And lots of people piled in. And

4:24

you know, there were lots of things that Amazon fixed

4:26

that were really broken for a lot of people. People

4:29

who have disabilities and couldn't leave the house. People

4:31

who needed to get large things. There

4:33

was a point early on where Amazon started

4:36

off with putting all kinds of things in

4:38

prime for free shipping. And there was this

4:40

point where people on the internet were trying

4:42

to find the heaviest item that you could

4:44

get free shipping on. And you could buy

4:46

like a two-ton safe. And

4:48

good natured old Uncle Jeff would

4:50

pick up the shipping tab to

4:52

deliver two tons of tempered steel

4:54

to your front porch. Those were

4:57

the good old days. So

4:59

you say lots of us piled in, lots

5:02

of brick and mortar retailers withered

5:04

and died making it harder to

5:06

go elsewhere. Step one is

5:08

figuring out how not just to give the users

5:10

a good deal, but to then spring the trap,

5:12

right? So that they don't go. Break

5:15

your local retail so that the only place

5:17

to shop is Amazon. Pre-pay for prime. Getting

5:20

you to pre-pay for a year's worth of shipping, right?

5:22

Who's going to shop anywhere else if you've already paid

5:24

for the shipping? It's also getting you

5:26

to pre-pay for a book every month. So

5:29

the audible subscription packages are extraordinarily generous because

5:31

that means that you would never buy an

5:33

audiobook anywhere else because you've already bought the

5:35

book. And then with

5:37

the digital stuff, they also use digital

5:39

rights management, which is this kind of

5:41

encryption that locks the file to

5:44

their authorized player. So you can

5:46

only read a Kindle book. You can only listen

5:48

to an audible book in a player that Amazon

5:50

has authorized. And the thing about

5:52

digital rights management is that since 1998, when

5:54

Bill Clinton signed the Digital Millennium Copyright Act,

5:57

it has been a felony to have a

6:00

to give someone a tool to remove digital

6:02

rights management, even if no copyright infringement ever

6:04

takes place. So if you buy one of

6:06

my books on Amazon, which you can't because

6:08

none of my books are sold on Amazon

6:10

with digital rights management, but if they were,

6:12

and I supplied you with the tool that

6:14

lets you take the DRM off, the digital

6:16

rights management off, and go to a rival

6:18

platform so you could break up with Amazon,

6:21

I would commit a felony punishable by a five-year

6:23

prison sentence and a $500,000 fine. Those

6:26

are penalties that are much stiffer than if you just

6:29

stole the book. So

6:31

then go to step two,

6:33

when the platform starts to

6:35

squeeze users for the betterment

6:37

of their business partners. So

6:40

the platform is now a thing that you're

6:42

locked to. It's got all of

6:44

your recurring subscriptions, all your music or movies

6:46

or books or everything are kind of stuck

6:48

in its walled garden. Now they can start

6:51

doing things like allocating other surpluses, as our

6:53

friend in the economics trade would say, to

6:55

these sellers. What does that mean,

6:58

allocating surpluses? Surpluses are just

7:00

goodies, right? It's what's left over after you're

7:02

running the business or what you have in

7:04

your bank account that you can spread around.

7:06

Amazon can run the business at a loss,

7:08

but it can get money from selling shares

7:10

or by borrowing money. Other surpluses

7:12

might be your privacy to pitch

7:14

ads to you. So Amazon takes some surplus

7:17

and it starts to allocate it to those

7:19

business users. Charges some low

7:21

fees for preferential treatment. Really

7:23

low platform fees. If you're a Kindle

7:25

author or an Audible author, the royalties

7:27

are crazily good. And this is at

7:30

a time when publishing is really in

7:32

the toilet. Some of that

7:34

is down to Amazon. So Amazon is

7:36

being good to its suppliers, but not

7:38

all of them. Amazon ran a project

7:40

called Project Gazelle. And in this project,

7:42

they went to their small and medium

7:44

publishers and they demanded discounts from them

7:46

that were so deep that the publishers

7:48

actually were losing money on their sales.

7:51

And the reason it was called Project Gazelle is

7:53

that the managers in charge of this were

7:56

exhorted to think of themselves as cheetahs bringing

7:58

down the sickly gazelles and the. advertisers

14:00

made this bad deal for publishers, but they

14:02

all feel like they can't leave. Even

14:04

if every time they log in, every time they

14:06

write a check, they're just like, Oh, this is

14:08

terrible. And the thing about

14:10

that equilibrium where you've got just enough surplus

14:13

in to keep people using it, but not

14:15

so much that there's any extra, it's brittle.

14:18

It just takes one good

14:20

competitor like TikTok or one big

14:22

scandal like a live stream mass

14:24

shooting or one big privacy debacle

14:27

like Cambridge Analytica and it

14:29

can tip. And you know, we're talking about Facebook,

14:31

but I think the example that everyone can relate

14:33

to here is Twitter, right?

14:35

Twitter has gone from indispensable

14:37

to completely dispensable for larger and

14:40

larger groups of people, businesses, movements,

14:42

and so on very quickly.

14:45

When that happens, when the platform

14:47

tips over and becomes a useless pile of

14:50

which is the end of an education, then

14:53

it starts to thrash. And so

14:55

Mark Zuckerberg has to pivot, which

14:58

is Silicon Valley for thrash. Pivoting

15:00

in his case is let's

15:02

all be legless, sexless, highly

15:04

surveilled, low polygon cartoon characters

15:06

in a virtual world named

15:08

after a satire from a

15:11

dystopian cyberpunk novel. You

15:13

know, there are consumers who argue that their

15:15

platforms are still working for them. People

15:18

aren't lying when they say they get value

15:20

out of these services. That's why we use

15:22

them. But the thing that the platforms want

15:24

us to think is that there is no

15:26

way to arrange their products

15:29

and services such that all the

15:31

things that we hate about them wouldn't come

15:33

with the things that we love about them,

15:35

that they are inseparable, that surveillance is a

15:37

part of search and could not ever be

15:39

anything but a part of search. But we

15:41

know that you can make a Facebook without

15:43

spying on people. How do we know that?

15:45

Because Facebook used to be the social media

15:47

service that didn't spy on you. What

15:50

these platforms would like you to believe is

15:52

what Margaret Thatcher wanted us to believe. There

15:54

is no alternative. There is no

15:56

alternative. To paraphrase whoever said it, maybe it

15:58

was Jizek, maybe it was They

22:01

called it antitrusts Vietnam. So

22:04

allowing a monopoly to form is

22:06

allowing a concentration of power to

22:08

occur that if in hindsight you

22:10

decide is dangerous is very, very

22:12

hard to diffuse again because the

22:14

monopolies become too big to fail

22:16

and too big to jail. We're

22:19

talking about monopolies, but

22:21

let's pivot to monopsonies

22:23

because if a single

22:25

dominant seller is a

22:27

monopoly, a single dominant

22:30

buyer is just as powerful

22:32

when it comes to screwing up

22:34

a genuinely free market. That's

22:37

right. So that brings another platform into

22:39

the discussion. Spotify.

22:41

You have this orgy

22:43

of mergers and acquisitions. You

22:45

have three big record labels,

22:48

Sony, Warner and Universal. So

22:51

in the late aughts when Spotify was trying

22:53

to get off the ground, especially in the

22:55

U.S., it made a deal with the big

22:58

three. Yeah. So Spotify goes

23:00

to Sony, Warner, Universal, 70 percent of

23:02

all the sound recordings in their portfolios,

23:04

which they didn't invest in. They bought

23:07

from other companies when they bought those companies and

23:09

mergers that would have been illegal before Ronald Reagan.

23:12

They say to these three companies, what's it going

23:14

to take to get your music on our service?

23:17

And the three companies say, we're going to be

23:19

your business partners. We're going to take a big

23:21

equity stake. And you're going to love that because

23:23

we want those royalty rates to be as low

23:25

as possible, a fraction of a penny per track

23:28

because these big three record labels, once

23:30

they are co-owners of Spotify, can take money

23:33

out of Spotify as licensors. Right. And that

23:35

money has to be shared with the labor

23:37

force who made the music or they can

23:39

take it out of shareholders. And that

23:42

money, they don't have to give it to the workforce

23:44

if they don't want to, the musicians who made the

23:46

works. And so the more

23:48

they charge for the music you listen

23:51

to on Spotify, the less their shares

23:53

are worth. So

23:55

you're describing record companies making money at the

23:57

expense of their own artists.