Jonathan Taplin

Jon Taplin wrote the book Move Fast and Break Things: How Google, Facebook and Amazon Have Cornered Culture and What It Means For All Of Us. The Guardian newspaper review described the book’s central argument as being that “the titans of the digital age frequently behave like spoiled and ignorant brats with far, far more money than sense; and their victims include many of the artists who create things of real value and who can no longer earn a living from doing so.”

You are an academic, and you worked for Bob Dylan and the Band, and went to Hollywood in the 70s and produced some significant Scorsese movies. Is it so?

Yes, and I became a Professor in 2003.

Is your book the story of the Silicon Valley big guys and at the same time a criticism of this system?

Yes, the internet used to be a very decentralized world, but now it is very centralized in the hands of Google, Amazon and Facebook. A tremendous amount of central power about everything. I call it ‘surveillance capitalism’. They vacuum as much data as they can from you clicking on a piece of music. The data is sold back through advertising. They are in the advertising, not in the media business.

Did you leave music and cinema because of the internet?

I started a streaming video on demand called Intertainer. I licensed movies from the major studios, but in 2002 Sony created a company mirror of my company and called it Movielink and got, obviously, all the major movie companies. I sued them in court, but as I was suing all the major studios with Sony then I had no films any more. So I became an academic.

You were a Professor at the USC Annenberg Innovation LAB. What did you teach?

I taught about the relationship of technology and entertaining, how technology has changed the business and the distribution.

At the beginning you say in your book that you were in favor of the internet world. Did you then change?

I still believe that the global architecture of that world is a brilliant invention. What I object to is the colonization of three major groups. Maybe the monopolies should be looked into and a lot of good things could happen. We don’t have to change the architecture, but the business models of these firms.

Do you think that is possible?

The European regulators are less afraid of Google or Facebook. They fined Facebook for a couple of hundred millions because Facebook lied in the acquisition of WhatsApp. I think the European Union is a better possibility for disciplining. The Trump administration does not want any regulation.

As you write it, do these three or five companies have billions of cash that they don’t invest?

Yes, Google has $150 Billion cash in its balance sheet. I think one of the biggest questions is why they don’t invest. They have such margins, they cannot find other places as lucrative as their advertising business.

Are they trying to change the automobile industry?

Yes, they invest in the software to run cars. It is not a capital intensive business, no gigantic factories.

Do you say that they are people who don’t create enough jobs?

Yes. Facebook is worth $450 billion and employs less than 20,000 people.

In your book you practically say that their monopolistic businesses control the world and are a menace for democracy. Is it true that these people don’t believe in democracy?

The United States went through an election where what is known as ‘fake news’ had a large part, and ‘fake news’ cannot exist without Facebook or Google. Peter Thiel says, “Competition is for losers”. He thinks monopolies are good for society and that the only way to make huge profits is to have no competition.

How long can this situation last?

A long time, because the market is not going to deliver a solution for the problem. People believe that Google is a natural monopoly and it would be insane to compete with them.

In other words, are you saying that people became passive?

Yes, it is the same in every city in the world. When they invented the phone it was more or less the same and there was competition.

How come there is only one Google?

It is the nature of Internet. The theory is that the larger and more powerful the network is, the more you want to be there. Why should I want to compete with Facebook’s 2 billion clients? I want to be where everybody else is.

Isn’t this like a totalitarian way of thinking?

In some ways yes. Google is just a business of taking users’ data as raw material. It does not need to make video programs.

What about Amazon?

Different. It is what is called a monopsony. What it means is a single middle man who is the interface between the consumer and the producer. You control so many customers that you can lower prices. Amazon controls 75% of the online book business. Book publishers have no choice. If Amazon wants a discount they have to give it. Publishers have no other way.

Is Amazon a monopoly too in that sense?

Yes, it is.

In your book you compare the Silicon Valley people with the Rockefellers, JP Morgan and the Carnegies. Are they the tycoons of today?

Yes, they have as much power as Rockefeller at the turn of the 19^th century. The data today is a new oil, and so they really are extraordinary controllers.

What about Apple and Microsoft?

Apple is a hardware business, selling phones and computers, and still they have competitors. Microsoft sells software to many different companies, and has a service business in which it competes with Amazon, IBM, Google in the so-called cloud business. They are very big, but not monopolies.

After having explained the situation and told the different stories of Mark Zuckerberg of Facebook, Jeff Bezos of Amazon, Sergey Brin and Larry Page of Google, what is your conclusion?

Governments may be the only moderating forms on these firms. That means changing some regulations and ultimately anti-trust enforcement.

Do you support the idea of cooperatives instead of monopolies?

Yes, if a group of musical artists get together to create a platform to distribute they could easily run it with 10% going to the platform. YouTube takes 50% of the money just for running the platform.

What is your major concern?

My main concern is that the artists are not able to make a decent living any more.

Aren’t consumers quite happy?

If I am a musical artist I should be able to have control, and I don’t have it any more, and they are trying to do the same with books.

What about the news?

If things don’t change there will not be local newspapers any more. Only the New York Times or Wall Street Journal will exist. There are no more local newspapers, that is because Facebook and Google take all the advertising revenue.

Don’t people still watch television?

Yes, they do, but the advertising money is migrating to Google and Facebook.

What about Trump and Twitter?

I don’t think much about Twitter. It is not a threat to Facebook. People use it in the news system.

Do you think Trump will be impeached?

Not as long as Republicans control the Congress. The Russian story will drag out a long time. If they find something it can have a big effect on the election of 2018. That might change the dynamic radically.

Will Trump achieve his purposes?

No, I think he will not achieve anything.

Where does America stand today?

America is deeply divided. Maybe 35% of Americans are still with Trump, no matter what he does, because he will change all what Obama did. Then 45% just hate Trump, and 15-20% hate politics and don’t want to know. As I say it is a divided country, and politically it is regressing.

Do you think America is in danger?

In 2018, if the Democrats will control the congress, Trump will be marginalized. Google and Facebook will do well with any government because they are very good at playing politics.

Facebook’s Mark Zuckerberg recently gave a ‘commencement speech’ to students graduating at Harvard University. Does he have Presidential ambitions?

A few weeks ago, I would have said Mark Zuckerberg would never run for President. I am still extremely sceptical of the idea, but the Harvard Commencement Speech feels like a political speech.

Did many people criticize your book?

A few people wrote against my book. But I will go to a conference in the coming weeks where I will give a presentation in front of many of the Silicon Valley people.

 

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June 2017

Jon Taplin.com