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Entrenched institutions have been strengthened in many ways. Thanks to digital technologies, Wall Street firms can trade derivatives at ever-faster rates, companies can inspect the private lives of prospective and current employees, insurance agencies have devised new methods to assess risky clients, political candidates can marshal big data to sway voters, and governments can survey the activities of citizens as never before. Corporate control—in media as in other spheres—is as secure as ever. In profound ways, power has been sucked in, not out.

In the realm of media and culture, the uncomfortable truth is that the information age has been accompanied by increasing consolidation and centralization, a process aided by the embrace of openness as a guiding ideal. While the old-media colossi may not appear to loom as large over our digital lives as they once did, they have hardly disappeared. Over the previous decade, legacy media companies have not fallen from the Fortune 500 firmament but have actually risen. In early 2013 they surprised analysts by reporting skyrocketing share prices: Disney and Time Warner were up 32 percent, CBS 40.2 percent, Comcast a shocking 57.6 percent.²⁷

These traditional gatekeepers have been joined by new online gateways, means of accessing information that cannot be avoided. A handful of Internet and technology companies have become as enormous and influential as the old leviathans: they now make up thirteen of the thirty largest publicly traded corporations in the United States.²⁸ The omnipresent Google, which, on an average day, accounts for approximately 25 percent of all North American consumer Internet traffic, has gobbled up over one hundred smaller firms, partly as a method of thwarting potential rivals, averaging about one acquisition a week since 2010; Facebook now has well over one billion users, or more than one in seven people on the planet; Amazon controls one-tenth of all American online commerce and its swiftly expanding cloud computing services host the data and traffic of hundreds of thousands of companies located in almost two hundred countries, an estimated one-third of all Internet users accessing Amazon’s cloud at least once a day; and Apple, which sits on almost $140 billion in cash reserves, jockeys with Exxon Mobil for the title of the most valuable company on earth, with a valuation exceeding the GDP (gross domestic product) of most nations.²⁹

Instead of leveling the field between small and large, the open Internet has dramatically tilted it in favor of the most massive players. Thus an independent musician like Rebecca Gates is squeezed from both sides. Off-line, local radio stations have been absorbed by Clear Channel and the major labels control more of the music market than they did before the Internet emerged. And online Gates has to position herself and her work on a monopolists’ platform or risk total invisibility.

Monopolies, contrary to early expectations, prosper online, where winner-take-all markets emerge partly as a consequence of Metcalfe’s law, which says that the value of a network increases exponentially by the number of connections or users: the more people have telephones or have social media profiles or use a search engine, the more valuable those services become. (Counterintuitively, given his outspoken libertarian views, PayPal founder and first Facebook investor Peter Thiel has declared competition overrated and praised monopolies for improving margins.³⁰) What’s more, many of the emerging info-monopolies now dabble in hardware, software, and content, building their businesses at every possible level, vertically integrating as in the analog era.

This is the contradiction at the center of the new information system: the more customized and user friendly our computers and mobile devices are, the more connected we are to an extensive and opaque circuit of machines that coordinate and keep tabs on our activities; everything is accessible and individualized, but only through companies that control the network from the bottom up.³¹ Amazon strives to control both the bookshelf and the book and everything in between. It makes devices, offers cloud computing services, and has begun to produce its own content, starting various publishing imprints before expanding to feature film production.³² Google is taking a similar approach, having expanded from search into content, operating system design, retail, gadget manufacturing, robotics, “smart” appliances, self-driving cars, debit cards, and fiber broadband.

More troublingly, at least for those who believed the Internet upstarts would inevitably vanquish the establishment dinosaurs, are the ways the new and old players have melded. Condé Nast bought Reddit, Fox has a stake in Vice Media, Time Warner bet on Maker Studios (which is behind some of YouTube’s biggest stars), Apple works intimately with Hollywood and AT&T, Facebook joined forces with Microsoft and the major-label-backed Spotify, and Twitter is trumpeting its utility to television programmers. Google, in addition to cozying up to the phone companies that use its Android operating system, has struck partnership deals with entertainment companies including Disney, Paramount, ABC, 20th Century Fox, and Sony Pictures while making numerous overtures to network and cable executives in hopes of negotiating a paid online television service.³³

Google has licensing agreements with the big record companies for its music-streaming service and holds stake alongside Sony and Universal in Vevo, the music video site that is also the most viewed “channel” on YouTube.³⁴ YouTube has attempted to partly remake itself in television’s image, investing a small fortune in professionally produced Web series, opening studios for creators in New York, Los Angeles, and London, and seeking “brand safe” and celebrity-driven content to attract more advertising revenue.³⁵ “Top YouTube execs like to say they’re creating the next generation of cable TV, built and scaled for the web,” reports Ad Age. “But instead of 500-odd channels on TV, YouTube is making a play for the ‘next 10,000,’ appealing to all sorts of niches and interest groups.”³⁶

Though audiences may be smaller as a consequence of this fragmentation, they will be more engaged and more thoroughly monitored and marketed to than traditional television viewers.³⁷ As Lessig predicted, the “limitations of twentieth-century advertising” are indeed being overcome. As a consequence, the future being fashioned perpetuates and expands upon the defects of the earlier system instead of forging a new path.

Meanwhile, the captains of industry leading the charge toward mergers and acquisitions within the media sphere cynically invoke the Internet to justify their grand designs. Who can complain, they shrug, if one fellow owns a multibillion-dollar empire when anyone can start a Web site for next to nothing? The subject of antitrust investigations in Europe and the United States, Google executives respond to allegations that the company abuses its dominance in search to give its own services an advantage by insisting that on the Internet “competition is one click away.”

Such is Rupert Murdoch’s view of things as well. Not long before the phone-hacking scandal brought down his tabloid News of the World, Murdoch made a bid for BSkyB, a move that would have given him control of over half of the television market in the UK. He assured the British House of Lords that concerns about ownership and consolidation were “ten years out of date” given the abundance of news outlets for people to choose from online. The House of Lords, however, was not convinced, as a lengthy report to Parliament made clear: “We do not accept that the increase of news sources invalidates the case for special treatment of the media through ownership regulation. We believe that there is still a danger that if media ownership becomes too concentrated the diversity of voices available could be diminished.”³⁸

In the United States, however, even the core attribute of the Internet’s openness, so disingenuously deployed by the likes of Murdoch, is under threat. The nation’s leading cable lobbying group has a phalanx of full-time staff campaigning against Net neutrality—the idea that government regulation should ensure that the Internet stay an open platform, one where service providers cannot slow down or block certain Web sites to stifle competition or charge others a fee to speed up their traffic.

Ironically, the effort is headed by ex-FCC (Federal Communications Commission) chairman Michael Powell, who, in 2003, began his abdication of his role as public servant by publishing an op-ed in which he argued against government intervention in the media marketplace. “The bottomless well of information called the Internet” makes ownership rules simply unnecessary, a throwback to “the bygone era of black-and-white television,” Powell wrote, positively invoking the very attributes of the Internet he is now paid handsomely to undermine. (In 2013 the revolving door came full circle when Tom Wheeler became Chairman of the FCC; Wheeler once stood at the helm of the same lobbying organization Powell now presides over.)³⁹

Based on the principle of common carriage—rules first established under English common law and applied initially to things like canals, highways, and railroads and later to telegraph and telephone lines—advocates of Net neutrality seek to extend this tradition to our twenty-first-century communications system, prohibiting the owners of a network from abusing their power by discriminating against anyone’s data, whether by slowing or stopping it or charging more to speed it up. They hope to defend the openness of the Internet by securing federal regulation that would guarantee that all bits, no matter who is sending or receiving them, are treated equally. The images and text on your personal Web site, they maintain, should be delivered as swiftly as Amazon or CNN’s front page.

Telecom companies have something different in mind. AT&T, Verizon, Time Warner, Comcast, and others recognize that they could boost revenue significantly by charging for preferential service—adding a “fast lane” to the “information superhighway,” as critics have described their plan. Service providers, for example, could ban the services of rivals outright, decide to privilege content they own while throttling everything else, or start charging content providers to have their Web sites load faster, prioritizing those who pay the most—all three scenarios putting newcomers and independents at a substantial and potentially devastating disadvantage while favoring the already consolidated and well capitalized.

The Internet is best thought of as a series of layers: a physical layer, a code layer, and a content layer. The bottom “physical,” or ISP (Internet service provider) layer, is made up of the cables and routers through which our communications travel. In the middle is the “code” or “applications,” which consists of the protocols and software that make the lower layer run. On top of that is the “content,” the information we move across wires and airwaves and see on our screens. The telecommunications companies, which operate the physical layer, are fundamental to the entire enterprise. Common carriers—“mediating institutions” essential to social functioning—are sometimes called “public callings,” a term that underscores the responsibility that comes with such position and power.

In his insightful book The Master Switch, Tim Wu, originator of the term “Net neutrality,” explains why this may be the biggest media and communications policy battle ever waged. “While there were once distinct channels of telephony, television, radio, and film,” Wu writes, “all information forms are now destined to make their way increasingly along the master network that can support virtually any kind of data traffic.” Convergence has raised the stakes. “With every sort of political, social, cultural, and economic transaction having to one degree or another now gone digital, this proposes an awesome dependence on a single network, and no less vital need to preserve its openness from imperial designs,” Wu warns. “This time is different: with everything on one network, the potential power to control is so much greater.”

While we like to imagine the Internet as a radical, uncontrollable force—it’s often said the system was designed to survive a nuclear attack—it is in fact vulnerable to capture by the private interests we depend on for access. In 2010, rulings by the FCC based on a controversial proposal put forth by Verizon and Google established network neutrality on wired broadband but failed to extend the common carrier principle to wireless connections; in other words, network neutrality rules apply to the cable or DSL service you use at home but not to your cell phone. In 2013, Google showed further signs of weakening its resolve on the issue when it began to offer fiber broadband with advantageous terms of service that many observers found violate the spirit of Net neutrality.⁴⁰

Given the steady shift to mobile computing, including smartphones, tablets, and the emerging Internet-of-things (the fact that more and more objects, from buildings to cars to clothing, will be networked in coming years), the FCC’s 2010 ruling was already alarmingly insufficient when it was made. Nevertheless, telecommunications companies went on offense, with Verizon successfully challenging the FCC’s authority to regulate Internet access in federal appeals court in early 2014. But even as the rules were struck down, the judges acknowledged concerns that broadband providers represent a real threat, describing the kind of discriminatory behavior they were declaring lawful: companies might restrict “end-user subscribers’ ability to access the New York Times website” in order to “spike traffic” to their own news sources or “degrade the quality of the connection to a search website like Bing if a competitor like Google paid for prioritized access.”⁴¹

Proponents of Net neutrality maintain that the FCC rules were in any case riddled with loopholes and the goal now is to ground open Internet rules and the FCC’s authority on firmer legal footing (namely by reclassifying broadband as a “telecommunications” and not an “information” service under Title II of the Communications Act, thereby automatically subjecting ISPS to common carrier obligations.) Opponents contend that Net neutrality would unduly burden telecom companies, which should have the right to dictate what travels through their pipes and charge accordingly, while paving the way for government control of the Internet. As a consequence of the high stakes, Net neutrality—a fight for the Internet as an open platform—has become a cause célèbre, and rightly so. However arcane the discussion may sometimes appear, the outcome of this battle will profoundly affect us all, and it is one worth fighting for.

Yet openness at the physical layer is not enough. While an open network ensures the equal treatment of all data—something undoubtedly essential for a democratic networked society—it does not sweep away all the problems of the old-media model, failing to adequately address the commercialization and consolidation of the digital sphere. We need to find other principles that can guide us, principles that better equip us to comprehend and confront the market’s role in shaping our media system, principles that help us rise to the unique challenge of bolstering cultural democracy in a digital era. Openness cannot protect us from, and can even perpetuate, the perils of a peasant’s kingdom.

2
FOR LOVE OR MONEY

Not that many years ago, Laura Poitras was living in Yemen, alone, waiting. She had rented a house close to the home of Abu Jandal, Osama bin Laden’s former bodyguard and the man she hoped would be the subject of her next documentary. He put her off when she asked to film him, remaining frustratingly elusive. Next week, he’d tell her, next week, hoping the persistent American would just go away.

“I was going through hell,” Poitras said, sitting in her office a few months after the premiere of her movie The Oath, the second in her trilogy of documentaries about foreign policy and national security after September 11. “I just didn’t know if it was going to be two years, ten years, you know?” She waited, sure there was a story to be told and that it was extraordinary, but not sure if she’d be allowed to tell it. As those agonizing months dragged on, she did her best to be productive and pursued other leads. During Ramadan Poitras was invited to the house of a man just released from Guantánamo, whom she hoped to interview. “People almost had a heart attack that I was there,” Poitras recounts. “I didn’t film. I was shut down, and I was sat with the women. They were like, ‘Aren’t you afraid that they’re going to cut your head off?’”

Bit by bit Abu Jandal opened up. Poitras would go home with only three or four hours of footage, but what she caught on tape was good enough to keep her coming back, a dozen times in all. “I think it probably wasn’t until a year into it that I felt that I was going to get a film,” Poitras said. A year of waiting, patience, uprootedness, and uncertainty before she knew that her work would come to anything.

With the support of PBS and a variety of grants, The Oath took almost three years to make, including a solid year in the editing room. The film’s title speaks of two pledges: one made by Jandal and others in al-Qaeda’s inner circle promising loyalty to bin Laden and another made by an FBI agent named Ali Soufan, who interrogated Abu Jandal when he was captured by U.S. forces. “Soufan was able to extract information without using violence,” Poitras has said, and he testified to Congress against violent interrogation tactics. “One of his reasons is because he took an oath to the Constitution. In a broad sense, the film is about whether these men betrayed their loyalties to their oaths.”¹

“I always think, whenever I finish a film, that I would never have done that if I had known what it would cost emotionally, personally.” The emotional repercussions of disturbing encounters can be felt long after the danger has passed; romantic relationships are severed by distance; the future is perpetually uncertain. Poitras, however, wasn’t complaining. She experiences her work as a gift, a difficult process but a deeply satisfying one, and was already busy planning her next project, about the erosion of civil liberties in the wake of the war on terror.

In January 2013 she was contacted by an anonymous source that turned out to be Edward Snowden, the whistle-blower preparing to make public a trove of documents revealing the National Security Administration’s massive secret digital surveillance program. He had searched Poitras out, certain that she was someone who would understand the scope of the revelations and the need to proceed cautiously. Soon she was on a plane to Hong Kong to shoot an interview that would shake the world and in the middle of another film that would take her places she never could have predicted at the outset.²

No simple formula explains the relationship between creative effort and output, nor does the quantity of time invested in a project correlate in any clear way to quality—quality being, of course, a slippery and subjective measure in itself. We can appreciate obvious skill, such as the labor of musicians who have devoted decades to becoming masters of their form, but it’s harder to assess work that is more subjective, more oblique, or less polished.

Complex creative labor—the dedicated application of human effort to some expressive end—continues despite technological innovation, stubbornly withstanding the demand for immediate production in an economy preoccupied with speed and cost cutting. We should hardly be surprised: aesthetic and communicative impulses are, by their very nature, indifferent to such priorities. A vase isn’t any more useful for being elaborately glazed. Likewise, a film is not necessarily any more informative for its demanding production qualities. We can’t reduce the contents of a novel to a summary of the plot, nor whittle down philosophical insight to a sound bite without something profound being lost along the way.

Cultural work, which is enhanced by the unpredictability of the human touch and the irregular rhythms of the imagination and intelligence, defies conventional measures of efficiency. Other trades were long ago deprived of this breathing room, the singular skill of the craftsperson automated away by the assembly line, much as the modern movement in architecture, to take one of many possible examples, has cut back on hand-finished flourishes in favor of standardized parts and designs.

For better or worse, machines continue to encroach on once protected territory. Consider the innovations aimed to optimize intrinsically creative processes—software engineered to translate texts, monitor the emotional tone of e-mails, perform research, recommend movies and books, “to make everything that’s implicit in a writer’s skill set explicit to a machine,” as an executive of one start-up describes its effort.³ Algorithms designed to analyze and intensify the catchiness of songs are being used to help craft and identify potential Top 40 hits. These inventions, when coupled with steadily eroding economic support for arts and culture, underscore the fact that no human activity is immune to the relentless pressure to enlist technology to the cause of efficiency and increased productivity.⁴

The problem isn’t with technology or efficiency, per se. Efficiency can be a remarkable thing, as in nature where nothing is wasted, including waste itself, which nurtures soil and plant and animal life. But the kind of efficiency to which techno-evangelists aspire emphasizes standardization, simplification, and speed, not diversity, complexity, and interdependence. And efficiency often masquerades as a technically neutral concept when it is in fact politically charged.

Instead of connoting the best use of scarce resources to attain a valued end, efficiency has become a code word promoting markets and competition over the public sphere, and profitability above all.⁵ Music, author and engineer Christopher Steiner predicts in Automate This, will become more homogenized as executives increasingly employ bots to hunt for irresistible hooks. “Algorithms may bring us new artists, but because they build their judgment on what was popular in the past, we will likely end up with some of the same kind of forgettable pop we already have.”⁶

There’s no denying the benefits the arts have reaped from technological innovation. Writing is a technology par excellence, one that initially aroused deep distrust and suspicion. Likewise, the book is a tool so finely honed to suit human need that we mistake it for something eternal and immutable.⁷ Every musical instrument—from the acoustic guitar to the timpani to synthesizers—is a contrived contraption. Without advances in chemistry and optics we would have no photography; without turntables, no hip-hop. I owe my career as a documentarian to the advent of digital video. New inventions make unimaginable art possible. No doubt, with emerging technologies, we stand on the brink of expressive forms still inconceivable.

Nonetheless, the arts do not benefit from technological advancement in the way other industries do: a half century ago it took pretty much the same amount of time and labor to compose a novel, produce a play, or conduct an orchestra as it takes today. Even with the aid of a computer and access to digital archives, the task of researching and constructing, say, a historical narrative remains obstinately demanding. For filmmakers the costs of travel, payments to crew, and money to support time in the field and the editing room persist despite myriad helpful innovations. Technology may enable new expressive forms and distribution may be cheaper than in the past, but the process of making things remains, in many fundamental respects, unchanged. The arts, to use the language of cultural economics, depend on a type of labor input that cannot be replaced by new technologies and capital.

In the mid-sixties, two Princeton economists, William Baumol and William Bowen, made the groundbreaking argument that economic growth actually creates a “cost disease” where labor-intensive creative productions are concerned, the relative cost of the arts increasing in comparison to other manufactured goods. Baumol and Bowen’s analysis focused specifically on live performance, but their basic insight is applicable to any practice that demands human ingenuity and effort that cannot be made more efficient or eliminated through technological innovation. (Explaining Baumol and Bowen’s dilemma in the New Yorker, James Surowiecki notes that there are, in effect, two economies in existence, one that is becoming more productive while the other isn’t. In the first camp, we have the economy of computer manufacturing, carmakers, and Walmart bargains; in the second, the economy of undergraduate colleges, hair salons, auto repair, and the arts. “Cost disease isn’t anyone’s fault … It’s just endemic to businesses that are labor-intensive,” Surowiecki explains.)⁸

To put it in the jargon proper to the economic analysis, the arts suffer from a “productivity lag,” where productivity is defined as physical output per work hour. Baumol and Bowen’s famous example is a string quartet: today it takes the same number of people the same amount of time to perform a composition by Mozart as it did in the 1800s, a fact that yields an exasperating flat line next to the skyward surge of something like computer manufacturing, which has seen productivity increases of 60 percent per year. “That the tendency for costs to rise and for prices to lag behind is neither a matter of bad luck nor mismanagement,” Baumol and Bowen explain in their seminal study. “Rather, it is an inescapable result of the technology of live performance, which will continue to contribute to the widening of the income gaps of the performing organizations.”

Analyzing the predicament faced by the labor-intensive arts, they hypothesized two cures to the cost disease. The first remedy was social subsidy, and in fact their work played an important role in energizing the push for increased funding for cultural institutions in the United States. The second cure was tied to a more general economic prediction, one infused with the optimism of the era. It may be the unfortunate fate of the arts to stagnate in terms of productivity growth, Baumol and Bowen maintained, but increased productivity in other sectors would help buoy creators. In their view, rising wages and—more important—an increase in free time would give the American people ample opportunities to create and enjoy art.⁹

In a digital age, however, art and culture face a core contradiction, since copies can be made with the push of a button. Like the live performances Baumol and Bowen discuss, most creative endeavors have high fixed costs. While the hundredth or thousandth or millionth digital copy of Poitras’s first documentary, My Country, My Country, about a Sunni family trying to survive in war-torn Iraq, costs virtually nothing, the first copy cost her nearly four hundred thousand dollars.

When copies can be made and distributed across the globe in an instant, the logic of supply and demand pushes the price down to nothing. Yet when human imagination and exertion are essential to the creative process, the cost of cultural production only rises. It’s a paradox that cannot be wished away. Baumol and Bowen identified “an ever-increasing gap” between the operating costs of labor-intensive creative products and their earned income. In a digital economy, this gap becomes a yawning cavern.

To new-media utopians, monetary concerns are irrelevant. In recent years a bevy of popular technologists, scholars, and commentators have united to paint an appealing picture of a future where the cultural field, from entertainment to academia, is remade as a result of digital technologies that allow individuals to create and collaborate at no cost. Before the Internet, the story goes, people needed to be part of a massive bureaucracy and have a big budget to do something like make a movie. Now anyone with a mobile phone can shoot a video and upload it to a global distribution platform. Before the Internet, a small number of specialists were hired to compose an encyclopedia. Now volunteers scattered across the globe can create one more comprehensive than any the world has ever known. And so on.

An amateur paradise is upon us, a place where people are able to participate in cultural production for the pleasure of it, without asking permission first. Social media have enabled a new paradigm of collaboration. The old closed, hierarchical, institutional model is being replaced by a decentralized, networked system open to all. Barriers to entry have been removed, gatekeepers have been demolished, and the costs of creating and distributing culture have plummeted. New tools not only have made cultural production more efficient but have equalized opportunity.

NYU professor Clay Shirky, perhaps the leading proponent of this view, calls this process “social production.” Harvard’s Yochai Benkler uses the term “peer production,” business writer Jeff Howe calls it “crowdsourcing,” and Don Tapscott and his coauthor Anthony D. Williams say “wikinomics.” Whatever term they use, the commentators agree that a revolution is unfolding, with the potential to transform not just culture but also politics and the economy. They put social production on a pedestal, holding it up as more egalitarian, ethical, and efficient than the old model it is said to supersede.