A Post-Unicorn Survival Guide for Artists
It’s over. Despite what you may hear to the contrary, there is a Great Contraction underway, in which non-integrated tech services and startups will be subsumed or die absent a clear business model or path to exit. If you’re operating a standalone or pureplay service and haven’t sold by second quarter 2016, you might want to see if mom’s basement is available.
Impacts on the rest of the economy are hard to predict. On one hand, disruption may be minimized due to the relative health of the largest Internet companies and their huge haul of software-as-service and Internet of things technologies. Size is a tried-and-true shield from market storms — just ask the consolidated multinational entertainment companies. Didn’t the tech evangelists of the aughts predict their demise? How did that work out?
The contraction is already happening. This week, the artist-marketing platform Bandpage sold to YouTube for a song (a mere $8 million, if reports are to believed); we’ve also heard rumors of a Pandora acquisition (though these may be unfounded). All digital services without a diversified portfolio for revenue generation and the means to cross-collateralize risk are vulnerable, though responses differ by category, scale and userbase.
Netflix is doubling down on original programming, but they still face challenges not only because of consolidated rightsholder control over desirable catalog, but also the anticompetitive shenanigans of Internet Service Providers. Take a company like Comcast, which happens to own one of the biggest television and motion picture studios and can bundle a Netflix clone with their hardware while sticking rivals with arbitrary data caps that guarantee consumers will pay hefty fees on top of already exorbitant monthly ISP bills. The fate of standalone music service Spotify remains an open question. Rightsholder and brand equity in the service may be enough to keep things humming until IPO, but if you believe an $8 billion valuation can be sustained in this marketplace, I’ve got a ski resort in Abu Dhabi to sell you.
Over the past decade, musicians and other creators have assumed the role of digital nomads, packing up wagons loaded with metadata, audio files, fan contacts and setting up in tent cities outside of the impossibly high, exquisitely gilded gates of neoliberal globalization. No sooner do we establish community in service of skint enterprise, then we’re forced to decamp when the infrastructure on which we depend is disassembled, absorbed or sold for scraps. Instead of a generative universe of useful innovations, we’re stuck with whatever tools are deemed non-threatening to the interests of a handful of companies in media and technology who operate at unfathomable scale.
Does this sound like the promise of the Internet to you?
At the risk of being disappeared — an ever-present danger when you speak truth to any/all power — I can say conclusively that the digital experiment has failed. We are not providing for a diversity of content and business models. We are enabling “winner-takes-all” on steroids, with asymmetrical opportunities for advancement that are predicated on our ability to generate the kinds of metrics attractive to partnership with one or another baron. And then we fight over which baron is more benevolent. Because that’s what the barons want us to do.
When big data drives investment, the long tail becomes thinner and thinner and the heads (this is a hydra, not a snake) become larger and larger. Meanwhile, quantum integration (like vertical, but with infinite vectors) means that new entrants face incredible odds, even where the goal is to be gobbled up. And without Wall Street-backed speculative investment in unicorns, there is even less competition. Despite fervent protestations, the major media companies like it this way, as there are fewer mouths to feed and more ways to exert leverage to compel favorable deals that prevent any competition from emerging.
Allow me to commit another heresy. Piracy is a scourge that has no doubt warped the economics of cultural production, but it is not the whole story. Even if we eradicated unauthorized access and distribution tomorrow, it wouldn’t change the dynamics I’ve described. In fact, it would probably hasten contraction, as increased leverage among entertainment conglomerates kicks off a talent acquisition/exclusivity arms race between content and technology behemoths. A great time to be Taylor Swift; not so hot for the rest of us.
This seems like the right place to remind that the content vs. tech dichotomy is an illusion. The heads of the hydra strike at and occasionally consume one another, but they share a fundamental biology. And they also share a common goal: full-stack integration, from pipe to content to application/interface.
Is there any way out? Not without a massive restructuring of the global economy to accommodate enterprise that doesn’t have to achieve planetary scale to sustain. So we need to start talking contingencies. How are culture producers going to survive the contraction and inevitable collapse? I’m not entirely sure, but I think one answer is localism. Cottage enterprise at the community level doesn’t have to be one-size-fits all. It can be diverse and tailored to the needs of practitioners, entrepreneurs and developers. It can make use of technology to produce custom innovations that make sense at a more modest scale. It can harness data to establish working models to export to other communities, where business and civic leaders can truly partner with culture producers to make decisions about implementation in their own burgs and burbs. And the best thing is, we can do it now.
Instead of advancing an agenda that isn’t ours to begin with, maybe we petition the federal government to serve local constituencies by directing resources to communities that can make their own decisions about how to develop participatory markets. This is where I sternly admonish those who think we should just drown the Internet in the bathtub: it’s not the network. It’s the economic approach. We need 100 gigabit broadband in every town and city in this country, just like we need more accessible broadcast licenses, smart transportation and energy grids, creative business-friendly zoning, smart real estate policies and meaningful arts education. Technology is not the enemy. Consolidation and negligent disruption are the enemies.
I’ve been lucky to mentor a lot of young legal and policy minds both as CEO of Future of Music Coalition and as an educator. At this point, I’d like to tell every Juris Doctor in training to focus on antitrust. I know the copyfights are sexy and telecommunications law an evergreen. But the inn is close to full, and the teams pretty rigid (except ours, and we’re not able to hire you all). Washington (and America) needs public interest attorneys and policy professionals working on restoring competition in every industrial sector, especially those that intersect with technology, information and cultural production. And at this point, that’s quite a few industrial sectors.
As to the creators, well, be skeptical when any entity pushes Three Minutes Hate against a specific industry in an attempt to solicit your outrage. Chances are, they’re trying to manipulate you into serving their agenda, even if the critique has some validity. Being a trained seal will not liberate the other marine mammals in captivity, even if it does score you the occasional herring. Think bigger. Be braver.
Partner with other creative people at ground level who share your views about sustainability and fairness. This can be developers, artists in other disciplines, local businesses, municipal and state agencies, nonprofits, community media hubs and educators. Seed your values and tend to their flowering in your own patch, however small. If everyone takes this approach, it won’t matter as much when the digital Jenga tower collapses. And when it does, hey, free scraps! While you’re waiting, sign up with Future of Music Coalition as we evolve our small but mighty nonprofit to serve you in your fight to restore integrity to American creativity and innovation.
Image: Skip Harvey, DeviantArt
