Saturday, 22 July 2017

FREE MARKETS TEND TO GRAVITATE TOWARDS MONOPOLY

I'm really glad I decided to check up on Nicholas Carr's blog Rough Type, after many years.

http://www.roughtype.com/

Nicholas Carr is no tech-Luddite but a veteran writer on the information technology scene, mostly in the United States and he is noted for having published several books, including The Big Switch, which is about teh rise of Web-based computing, or what is called "cloud computing",which he features on his more professional website at http://www.nicholascarr.com/?page_id=21.

What I like about Nicholas Carr is that he is not afraid to be an IT-contrarian, and expresses himself more bluntly (or you could say "unplugged') on his Rough Type blog, much as I do on my IT.Scheiss blog at http://itsheiss.blogspot.com.

Two of his recent blog posts caught my eye on Rough Type today.

The first is "The digital-industrial complex" which describes how the consumer IT industry and the Internet has become dominated by a handful of giant corporations and how the Web has proven to be a centralising force, which has increasingly consolidated wealth and market power into the hands of a handful of large corporations, rather than a "decentralising force" which Cyberutopians in the 1990s claimed would "empower" a myriad of small players in a competitive free market online and enable them to "compete on a level playing field" with large corporations and even "undermine" them.

I don't know what these Cyberutopians were smoking but if they had bothered to look back at the other industries which came before IT and Internet-based industries, they would have seen how they all began comprised of a myriad of small players competing with each other and providing consumers with plenty of choices, but thanks to the very same free market forces at work within capitalist free markets which they so love and adore, the weaker players were gradually driven out of the market through bankruptcies, mergers, acquisitions and so forth, with the industry eventually consolidating down to a handful of corporate giants - i.e. an oligopoly, and the process continues until a giant monopoly player remains. Sometimes governments will break up the monopoly into smaller large players but they will eventually gravitate towards a monopoly again.

Today, Windows of all versions has 91.35% of the desktop operating system market, followed far behind by Mac OS X with 6.29% and Linux with 2.36% and that is despite there being a choice of 3,000 or more different Linux distributions, most of which are free of charge.

https://www.netmarketshare.com/operating-system-market-share.aspx?qprid=10&qpcustomd=0

Amongst desktop search engines, Google has 79.45% market share, Bing 7.31%, Baidu 7.06%, Yahoo! - Global 4.91%, Ask - Global 0.14%, AOL - Global 0.05%, Excite - Global 0.01% and others combined 1.06%.

https://www.netmarketshare.com/search-engine-market-share.aspx?qprid=4&qpcustomd=0

Simply put, it is a dialectical-materialist reality that if left on their own unregulated, free markets will tend towards monopoly. However, any form of market regulation is anathema to the Libertarian ethos of most Cyberutopians who hate monopolies but at the same time want minimal or zero government regulation of markets, even when regulation is required to forestall the formation of monopolies.

At the end of the day, a monopoly belonging to the people and democratically governed by and answerable to them would be better than  having even a myriad of options in which you have no say, just like the number of You Tubers whose suddenly found their videos being demonetised by You Tube because the "almighty" advertisers do not want their advertisements to be associated with some of their videos which are deemed controversial.

This move by Google (which owns You Tube), has resulted in some content creators who post their videos on You Tube, no longer being able to rely from advertising from You Tube for a living, and there's nothing they can do, not even sue Google, since they have no rights on You Tube, since Google has no contractual or legal obligations to them. So all they can do is to post a video either complaining about Google's stricter enforcement of its old You Tube policies, pleading with Google to be nice to them or lecturing Google that it would serve the company better to revert to the earlier situation.

Well, Google owns You Tube and there's nothing you can do buddy, so forget this entitlement mentality, which is also so anathema to the Libertarian ethos, and get a real job, however shitty, where you at least have some protection under whatever "uggh!!!" labour laws, which Libertarians have so much despised, ranted and raved against so much, however weak they may be in today's Neo-liberal economic environment, thanks to Von Hayekist, Chicago School, Von Misesist policies, which dominate today. 

In his other article "Big Internet", Nicholas Carr describes how some people are beginning to tire of Big Internet centred around giants like Google and Facebook and Twitter and Amazon and Apple and are returning to more personal platforms such as blogs.

Well, I'm glad to say that I gave up Facebook and Twitter, though I still use Google for e-mail and blogs and less frequently, WhatsApp.

Nicholas Carr's two articles follow below.

(If you cannot see the embedded images below, please enable viewing images in your e-mail program)

IT.Scheiss



The digital-industrial complex

Exactly fifty years after the hippies gathered in San Francisco, another summer of love seems set to blossom. This time it’s not the flower children who are holding hands and sharing beds. It’s the titans of Big Internet.

Just this week, at its Build conference, Microsoft gave a hug to former adversaries Apple and Alphabet. “Windows PCs heart iOS and Android devices” was one of the big themes of the event — yes, the heart symbol was on display — and Microsoft announced that Apple’s iTunes app is coming to the Windows Store. Microsoft also formed a partnership with Facebook to incorporate an ad-tracking tool into Excel. Meanwhile, Apple and Amazon were engaged in their own public display of affection. They let word leak out that Amazon’s Prime Video app would soon be available on Apple TV. The once fierce rivals appear to have “reached a truce,” reported Recode.

Thanks to their technical and marketing prowess, combined with the winner-take-all dynamics of the internet, Alphabet, Amazon, Apple, Facebook, and Microsoft have emerged as the dominant companies of the consumer net (Farhad Manjoo dubs them the “frightful five”), with a combined market cap of a zillion dollars, give or take. Each now operates something of a perpetual-motion money-printing machine powered by the dollars and data that flow in such massive quantities through the net. The companies still face threats, of course, but, even as they sow disruption in other industries, their own market positions now look pretty stable and secure. They’re the winners.

While the boundaryless nature of online business means that each of the five companies competes with each of the others on many fronts, there is also now a symbiosis among them — and that symbiosis is getting stronger. Each of the five makes its profits in different ways, with Apple focusing on hardware, Google on web ads, Facebook on social-media ads, Amazon on retailing, and Microsoft on software sales and subscriptions. Their businesses overlap, but they are also complementary. And, as is often true with complementary products and services, gains by one company often help rather than hurt the businesses of the others. Each of the five is focused on expanding consumers’ dependency on the net, and as the net pie expands so does each of the five slices. At this point, being friends rather than enemies makes sense.

When it comes to business, in other words, the net is a centralizing force, not a decentralizing one as once assumed. The frightful five together form a digital-industrial complex, a nascent oligopoly set to skim the lion’s share of the profits from the consumer web for the foreseeable future. Five big pieces, loosely joined.

On Monday, the venture capitalist Jeremy Philips wrote a column intended as a rejoinder to Manjoo’s warnings about the power of the titans. Philips argued against the idea that, as he put it, “the five leading tech behemoths have turned into dangerous monopolies that stifle innovation and harm consumers.” Their businesses, he wrote, are “all converging — therefore competing — with one another.” His timing was unfortunate, as immediately after the column appeared we got the news of the new partnerships among the companies.

Philips’s argument would have sounded compelling just a few years ago. Back then, the five’s positions were not as well-established as they are now, and their relationships were defined by their skirmishes. That’s no longer the case. Yes, the businesses of the five have converged, but it’s now becoming clear that their interests have converged as well. For Big Internet, this is the dawning of the Age of Aquarius.

Image: Actors portraying hippies in “Hair.”

http://www.roughtype.com/?p=7866

Nicholas Carr posted a picture of hippies (actually actors portraying hippies) at the top of his blog. I suppose this is because, like me, he too believes that this Cyberutopian nonsense is influenced by some of the social and countercultural ideals of the hippies in the late 1960s.

They were noble ideals of peace, love, mutual understanding between different races, personal liberty, alternative modes of living, environmentally sustainable living and so forth - which some believed would being about a peaceful world, in which all people are family, but alas, it was just that - a nice ideal which did not come to pass nor bring about a better world 40 or so years later, as is pretty evident from the state of our world today , with growing hatreds, intolerance and wars.

He also mentioned "the dawning of the Age of Aquarius" at the end of his post. Well, below is a video clip of the song "Aquarius" performed in the movie version of the Broadway musical "Hair", released in 1979, though "Hair" was first performed on Broadway, New York in the late 1960s or the early 1970s.

https://www.youtube.com/watch?v=EhbxI5eVnM4

Well today the big Internet corporations dominate global Cyberspace, less than 30 years after the Internet went mass market, thanks to the legions of content creators who supplied the content which attracted the eyeballs, hence the advertisements which made these companies so fabulously rich.


Also, many publications, both print and online worldwide are being crushed by the Internet giants, which are drawing away the advertising which enabled these publications to survive and thrive, and provide decent employment opportunities for many. (Graphic courtesy of Carpe Diem blog, with figures courtesy the Newspaper Association of America)

I would never recommend a school leaver venture into journalism today, since they could be out of work in their 40s, as the trend which is happening in the US as shown in the graph above, is gradually making its way around the world, especially in countries where broadband penetration is high enough for enough people to forsake print media and even their online or digital versions. Already, Malaysian media is suffering from the competition for advertisements from these non publication media giants, whilst in the U.S. combined print, online and digital newspaper revenue in 2014 was below what it was way back in in 1950. Well, that is the cruel reality.

Whilst each physical village can support only a handful of small businesses, at least the 3.9 million villages worldwide (according to an unofficial estimate) each provide dispersed business opportunities which together add up to a lot.

However, the one global village in Cyberspace provides only a handful of opportunities, which the Internet giants have come to dominate. They have already cornered their market respective spaces and it will be nearly impossible for a newcomer to challenge them in their market space.

In 2011, a venture capital provider advised Internet startups not to develop an application, platform or service already provided by three or more players in Cyberspace, since it will be almost impossible to challenge the incumbents and for the startup to grow.

As Nicholas Carr pointed out, each of the "frightful five" provide different applications and services which can complement each other, and as we saw from the Netmarketshare figures above, the dominant player is usually far ahead of the nearest competitor in their respective product sector.  

Next, Nicholas Carr's post on Big Internet follows below.

Big Internet lost

We talk about Big Oil and Big Pharma and Big Ag. Maybe it’s time we started talking about Big Internet.

That thought crossed my mind after reading a couple of recent posts. One was Scott Rosenberg’s piece about a renaissance in the ancient art of blogging. I hadn’t even realized that blogs were a thing again, but Rosenberg delivers the evidence. Jason Kottke, too, says that blogging is once again the geist in our zeit. Welcome back, world.

The other piece was Alan Jacobs’s goodbye to Twitter. Jacobs writes of a growing sense of disillusionment and disappointment with the ubiquitous microblogging platform:

As long as I’ve been on Twitter (I started in March 2007) people have been complaining about Twitter. But recently things have changed. The complaints have increased in frequency and intensity, and now are coming more often from especially thoughtful and constructive users of the platform. There is an air of defeat about these complaints now, an almost palpable giving-up. For many of the really smart people on Twitter, it’s over. Not in the sense that they’ll quit using it altogether; but some of what was best about Twitter — primarily the experience of discovery — is now pretty clearly a thing of the past.


“Big Twitter was great — for a while,” says Jacobs. “But now it’s over, and it’s time to move on.”

These trends, if they are actually trends, seem related. I sense that they both stem from a sense of exhaustion with what I’m calling Big Internet. By Big Internet, I mean the platform- and plantation-based internet, the one centered around giants like Google and Facebook and Twitter and Amazon and Apple. Maybe these companies were insurgents at one point, but now they’re fat and bland and obsessed with expanding or defending their empires. They’ve become the Henry VIIIs of the web. And it’s starting to feel a little gross to be in their presence.

So, yeah, I’m down with this retro movement. Bring back personal blogs. Bring back RSS. Bring back the fun. Screw Big Internet.

But, please, don’t bring back the term “blogosphere.”

Image: still from Lost.

http://www.roughtype.com/?p=5010





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