Hey Wisecrack, Jared here.
You may have noticed a trend lately.
It seems like every day, some company announces a new cloud or platform service for people
to download.
A few months ago Google announced its Google Stadia game streaming platform, which will
include YouTube integration, and allow gamers to play games from most any screen with an
internet connection.
The announcement was met with some excitement from big game developers looking for new distribution
deals… and... a lot of skepticism from gamers, prompting eyerolls and also some questions
like, what games will be available?
Will people actually own their games or will everything be subscription based?
How will everyone’s data be used?
And what will happen when Google takes on Sony, Nintendo, Microsoft… and popular PC
gaming platforms like Steam?
It’s not just gaming platforms that have people asking questions, though.
“Platforms” and “subscription models” are spreading like the plague.
CBS has successfully forced nerds into submission by requiring them to pay 5.99 a month for
the privilege of watching Star Trek on their “All-Access” platform.
Apple recently announced that devices will be taking a backseat to game, news, and video
subscriptions on a new Apple platform.
And Disney, who already owns… a lot of things … is launching Disney+, which will ask us
to pay another subscription to watch things that were once available on Netflix and a
slate of new Marvel shows.
And NBC has yet to launch their own streaming service which will, again, steal The Office
from Netflix.
People seem annoyed that these services are just another thing hankering to siphon a few
bucks a month out of their pockets.
But is there a deeper problem here?
And is that problem platforms themselves?
Maybe, maybe not, but for better or worse, platforms are changing our entire economic
system and I’m here to talk about how, why, and what it all means.
Welcome to this Wisecrack Edition on the platform economy.
Today we’re surrounded by platforms.
A Platform is a website or application that brings two or more sides of a market together,
that is, a digital space where people who need a service can find and pay for that service.
The earliest example is probably eBay.
The site originally launched as AuctionWeb in 1995, and created a platform for someone
who wants to sell their autographed Marky Mark underwear to an eager buyer, this is
real by the way.
After eBay’s success, other companies started springing up with similar business models--
Amazon originally connected book publishers with readers --remember when amazon only sold
books?
Ticketmaster created an online space for venues to sell tickets, and soon there were platforms
for everything… now Uber, connects drivers with passengers, AirBnB connects spare rooms
with travelers, and Spotify, connects listeners with music.
But let’s back up for a minute-- how did we even get here?
Once upon a time before free markets, economies were regionally based, and self contained.
According to Political Economist Karl Polanyi, there were three general types of economic
systems:
Reciprocity, where goods are exchanged as gifts between communities.
For instance, a tribe gifts another tribe a cow, and eventually gets one back later
on in the year.
Householding, in which families produce food, goods, and tools for their own use and consumption.
And Redistribution, where a tribal leader or feudal lord controls all the resources,
and then redistributes them to members of their society.
Now remember this one, we’re going to come back to it later.
In all of these, survival wasn’t really based on how efficient production was.
Sure, a crop may not grow well year over year, but there were contingency plans such as storing
crops, or minimal exchange on simple markets, like bartering with your neighbor for what
you need.
But eventually capitalism happened, and the rules changed.
People became increasingly separated from the things they needed to survive, turning
to the market to get things like food, water, and shelter, and selling their skills to whoever
would pay.
By the late 1700s, industry was booming, and manufacturing began to take over Europe.
In 1776, Scottish economist Adam Smith published An Inquiry into the Nature and Causes of the
Wealth of Nations, outlining the benefits of efficient production and singing praises
about how dope the free market is.
And people liked his theories.
The market eventually expanded, as standards of living began to change, from bare essentials
like food and clothes to luxury items.
But having so many different sellers selling all these things led to competitive pressures.
If your goods were too expensive, no one would buy them.
So businesses started lowering production costs so they could sell their items for less,
while still maintaining enough profits.
Businesses have been lowering production costs ever since, primarily by turning to technology,
and lowering labor costs.
Which was easy to do if you were in manufacturing as technology got better and better, and you
could pay less and less for labor.
It started with assembly lines, which provided companies with cheaper labor that didn’t
need to be trained in any special skills— instead of learning how to put a whole car
together, a worker just had to learn how to put one piece of the car in one place.
Eventually, large business realized that robots could do that instead of people, and since
you don’t have to pay robots salaries, soon some of these places barely had any employees
at all.
But there were still businesses that couldn’t really use assembly lines or robots to cut
as many costs— places like grocery stores, or taxi companies, or movie theaters.
Until the internet came around.
Stores and service providers suddenly had to compete with… websites, where you could
get the same product or service mailed to you directly from the distributor with the
click of a button, or find a room in someone’s house to sleep in instead of booking a hotel
room.
The owners of these new websites, these platforms, don’t need to pay any labor costs because
people doing the buying and selling are doing it for them.
In other words, Uber isn’t a taxi company, it’s a technology company, that pairs an
independently contracted driver with you, the consumer.
But even those independently contracted drivers are a liability, as the company moves towards
driverless vehicles.
Okay, so now we understand how platforms happened, but why are they making people so uneasy?
Well, it might be because people are losing their sense of autonomy and ownership.
You know how I asked you to remember Karl Polanyi’s redistribution, where one person
controls and redistributes all the resources?
Like a feudal lord?
Well it’s because more and more, the way platforms operate feels very similar to that
kind of economy.
Tech companies own assets and distribute them to us, and as a result, some have argued a
new kind of feudalism has emerged.
One where companies are like lords, and subscribers are like serfs paying rent to access some
stuff.
So if this is the case, will we all be indentured to our platforms?
In his 2016 article Evgeny Morozov describes the steady march of Google and Facebook toward
feudal ownership over greater proportions of the economy.
By “[destroying] all competition and [making] the world dependent on their platforms,”
Morozov suggests these neo-feudal lords will increase their control over how economic resources
are accessed.
Political theorist Nick Srnicek goes as far as saying that these big companies are becoming
“owners of the infrastructures of society...ending private property for the masses and having
everything provided as-a-service by quasi-monopolistic firms.”
We don’t own stuff anymore, companies basically lease everything to us, and at the moment
these companies are all fighting with each other over who gets to provide us with access
to stuff that they control.
Instead of owning cars, people are taking ride shares with changing prices generated
by algorithms.
Instead of owning CDs, we get our music from Spotify, where it can be taken down.
And it gets even more complicated when these different platforms start fighting each other
over who has access to what.
Back in January Epic games announced an exclusivity deal with Metro: Exodus just 2 weeks before
the game’s launch-- after many people had already pre-ordered it on Steam-- sparking
backlash from Steam users, who wanted their money back, and Steam itself, who wanted to
sell the game.
If you want to watch The Marvelous Mrs. Maisel you need an Amazon Prime subscription, if
you want to watch Stranger Things you need a Netflix subscription, if you want to watch
Star Trek Discovery… well… hopefully you can borrow a CBS all access password from
your dad.
But the point is people are shelling out money to all these platforms for temporary access
to a tv show instead of buying a box set.
Remember when you just had to choose between dvd and blu-ray?
While it’s annoying enough to have 37 different logins, and frustrating to use up hard drive
space for some dumb software you only need for one game there are pretty serious ramifications
to these new ownership models.
Last year farmers lost their right to repair tractors and equipment they bought from John
Deere.
Under a new agreement, farmers can no longer access or modify the source code of any farm
equipment software, or change engine settings.
They can’t even purchase repair parts without going through an authorized dealer.
Which you can find through their app.
This is a big deal for farmers, who have been modifying and fixing their own equipment since
forever.
If an important piece of farm equipment breaks, they can’t always afford to wait for a John
Deere rep to come update their software for them.
And not being allowed to upgrade their tractors means they can’t update their systems to
meet future emissions requirements, which means when standards change… they’ll have
to buy a new tractor.
This isn’t new, it’s just spreading.
Without software, our smartphones, which have become pretty indispensable, are just fancy
boxes.
We lease that software.
“Leasing software” isn’t anything new either, as Microsoft pushes Office 365 subscriptions,
or Adobe doing basically the same thing.
And we’re at a point where we’re literally advocating for laws so that we can fix things
that we already own.
The ‘right to repair’ movement has already been picking up steam and appealing to the
US government to address these issues.
So, as big companies like Apple and Google and Disney take over platforms and buy everyone
out, we might finally have fewer passwords to memorize and fewer apps to purchase-- but
at what cost?
To put it bluntly: the cost is our data.
According to Srnicek, data “have become increasingly central to firms and their relations
with workers, customers, and other capitalists.
Platforms became an efficient way to monopolize, extract, analyze, and use the increasingly
large amounts of data that were being recorded.”
So, while some of these businesses operate by skimming off the top of sales, or charging
subscription fees, a portion of their money and success actually comes from collecting,
using, and selling your information.
And these platforms are being increasingly integrated into our daily lives.
Uber calculates fares based on information coming in through the app, Spotify recommends
new music based on an analysis of what you’ve been listening to… and then there are
companies who are flat out selling information for profit to third party data brokers…
who forward it on to ad agencies, insurance brokers, and anyone else who wants it.
Kind of like how Rockefeller owned all the oil, big tech companies monopolizing on data
are starting to take over sections of the economy, providing valuable services that
people won’t stop paying for…and making it difficult for anyone else to provide those
services.
What’s different is instead of controlling physical resources, these businesses control
our information and how its used.
Netflix has so much information on people’s viewing habits, they can keep recommending
shows for people to watch so they’ll keep their subscriptions active.
So it goes beyond selling your search history to advertisers: companies use data to wield
a huge amount of power when it comes to shaping our consumption, or even the economy as a
whole.
Take Google Stadia.
An article from Brian Feldman in the Intelligencer points out that linking Stadia so closely
with YouTube might create a feedback loop of engagement metrics that could ultimately
influence game-design choices.
According to Feldman, “it’s not hard to imagine a world in which the Stadia platform
ends up wielding major, indirect influence over what types of things game developers
create and what YouTubers decide to stream.”
With everyone chasing trends, some game developers might just end up creating cookie-cutter games
that all look the same.
We see it with videos, like how when one watched conspiracy theory videos, YouTube suggested
more conspiracy videos, leading to an increase in more conspiracy content, leading to more
conspiracy theorists, who wanted more conspiracy content.
They’ve since fixed that, but you’re usually only one Mukbang video away from the topic
dominating your homepage.
But are we getting ahead of ourselves?
More than a century ago, policymakers were confronted with a very similar problem, when
people started using telephones.
People owned their telephones, but they didn’t own the system they were using to communicate.
As people began to rely on telephones for communication, phone companies turned into
big unregulated monopolies.
So, the government started placing restrictions on the companies to keep them from exploiting
consumers, allowing them to be monopolies, but treating them as utilities.
So maybe the federal trade commission will do something similar with tech platforms…
some policymakers even propose creating new departments in government to oversee big platforms.
While it’s still unclear what that will look like, with Uber drivers striking to unionize
and Mark Zuckerberg testifying before congress, it seems like calls for intervention will
only increase
So what do you think?
Are we destined for lives in the Matrix where our data is extracted so big companies can
profit trillions of dollars and dictate everything we do with our time?
Or will we find a middle ground where we live harmoniously with our platforms in some kind
of data-driven utopia?
Let us know what you think.
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