The great internet swindle: ever get the feeling you've been cheated?

[ND-Dem]

By any measure... the internet, plainly, has transformed all our lives, making so much of what we do every day – communicating, shopping, finding, watching, booking – unimaginably easier than it was. A Pew survey in the United States found last year that 90% of Americans believed the internet had been good for them.

So it takes a brave man to argue that there is another side to the internet... Keen (who was once so sure the internet was the answer that he sank all he had into a startup) is now a thoughtful and erudite contrarian who believes the internet is actually doing untold damage. The net, he argues, was meant to be “power to the people, a platform for equality”: an open, decentralised, democratising technology that liberates as it empowers as it informs. Instead, it has handed extraordinary power and wealth to a tiny handful of people... Individually, it may work wonders for us. Collectively, it’s doing us no good at all. “It was supposed to be win-win,” Keen declares. “The network’s users were supposed to be its beneficiaries. But in a lot of ways, we are its victims...”

Keen cites San Francisco-based writer Rebecca Solnit’s incisive take on Google: imagine it is 100 years ago, and the post office, the phone company, the public libraries, the printing houses, Ordnance Survey maps and the cinemas were all controlled by the same secretive and unaccountable organisation. Plus, he adds, almost as an afterthought: “Google doesn’t just own the post office – it has the right to open everyone’s letters.” This, Keen argues, is the net economy’s natural tendency: “Google is the search and information monopoly and the largest advertising company in history...
Uber’s about being the transport monopoly; Airbnb the hospitality monopoly; TaskRabbit the labour monopoly. These are all, ultimately, monopoly plays – that’s the logic. And that should worry people...”

Keen’s book cites a 2013 survey by the US Institute for Local Self-Reliance, which found that while it takes, on average, a regular bricks-and-mortar store 47 employees to generate $10m in turnover, Bezos’s many-tentacled, all-consuming and completely ruthless “Everything Store” achieves the same with 14. Amazon, that report concluded, probably destroyed 27,000 US jobs in 2012.

“And we love it,” Keen says. “We all use Amazon. We strike this Faustian deal. It’s ultra-convenient, fantastic service, great interface, absurdly cheap prices. But what’s the cost? Truly appalling working conditions; we know this. Deep hostility to unions. A massive impact on independent retail; in books, savage bullying of publishers... But we’re seduced into thinking it’s good; Amazon has told us what we want to hear. Bezos says, ‘This is about you, the consumer.’ The problem is, we’re not just consumers. We’re citizens, too.”

One chapter of the book is devoted to Keen’s lament for Rochester, the home town of Eastman Kodak – a company that in 1989, the year Tim Berners-Lee invented the web, was worth $31bn and employed 145,000 people. It filed for bankruptcy in 2012.... Meanwhile, 55,000 Kodak pensioners are out of luck. Just the previous year, as a timeline at its headquarters records, 380bn photographs were taken around the world – 11% of all the photographs ever taken...The number of photographers’ jobs in the US has fallen by 43%, he notes; the number of newspaper editorial jobs by 27%. He cites US singer-songwriter Ellen Shipley, who calculated in 2012 that one of her most popular tracks was streamed 3.1m times on the internet radio Pandora, for which she received a total of $31.93, and points to the 45% of revenue skimmed off all independently produced content on YouTube. Meanwhile, the internet’s inherent “1% model” is functioning perfectly: in 2013, Keen notes, the top 1% of music artists received 77% of all artist-recorded music income. Blockbusters do brilliantly; most of the rest withers....


http://www.theguardian.com/technology/2015/feb/09/andrew-keen-internet-not-answer-interview

[Warpy]

1. I love being able to answer dumb questions without a trip to the library

I also love being able to access content like the incredibly good documentaries the BBC has done over the past few years.

However, i have never expected email to be particularly private. I want private, I buy a stamp.

[Jim Beard]

9. What makes you think it will be available?

Cutting corners at the PO now. Making money on junk mail.

[whatthehey]

2. nope

The only thing this much-feared data-gathering does to me is provide targetted ads that are much more likely to be of interest to me than random ones. Which is not surprising, since that's what it's for.

[ND-Dem]

3. yeah, that's the only thing. it's all about ads.

[whatthehey]

16. Pretty much - unless you think Google has a couple million agent Mikes

reading every single search term and cloud file trying to work out if I'm some nefarious V wannabe...

[ChisolmTrailDem]

4. Sounds like sour grapes from someone who tried and failed to succeed with the Internet. nt

[ND-Dem]

5. exactly. yes, that must be it, couldn't be any other reason. all criticisms are always about

failures being jealous of 'success'. .

[ChisolmTrailDem]

12. Logic fail. nt

[ND-Dem]

13. is yours.

[ChisolmTrailDem]

14. No, is yours. And why are you being shitty to me in the first place? All I did was make a comment

to your post. Is this how you treat people who participate in your threads?

" all criticisms are always about failures being jealous of 'success'" ... you don't see the logical fallacy in that statement??

[ND-Dem]

17. two words = being shitty to you? i said nothing to you you hadn't already said to me.

The logical fallacy was found in your original comment.

[ChisolmTrailDem]

18. Ignoring you. You're just out for a fight. nt

[ND-Dem]

21. projection is a terrible thing.

[starroute]

6. And how is this the internet's fault?

Even without the internet, monopolies would still be out of control because of the gutting of antitrust legislation. The failure of Eastman Kodak is primarily due to digital photography. The newspaper industry began fading with the advent of television. Consumerism -- and the idea that low prices for consumers are better than decent wages for workers -- was taking over by the 1970s.

I'll grant that the internet has helped accelerate some of these trends. But they existed before the internet and they would be happening even without it.

[ND-Dem]

8. Kodak is still in business and doing just fine. It's just its pensioners that aren't. In fact, a

Kodak engineer invented the first digital camera.

http://petapixel.com/2010/08/05/the-worlds-first-digital-camera-by-kodak-and-steve-sasson/

Do you think this is accidental?

Do you think the gutting of antitrust and the failure of enforcement is accidental?

[ND-Dem]

7. The 'new economy" is a monopoly economy.

This, Keen argues, is the net economy’s natural tendency: “Google is the search and information monopoly and the largest advertising company in history...

Uber’s about being the transport monopoly; Airbnb the hospitality monopoly; TaskRabbit the labour monopoly. These are all, ultimately, monopoly plays – that’s the logic.

[Jim Beard]

10. A Democratic message board defending monopolies

how unprogressive.

[ND-Dem]

11. The OP isn't defending monopolies.

[Jim Beard]

15. I am referring to gomments posted

here on DU

[closeupready]

22. The original anti-monopolist was a Republican.

Teddy Roosevelt. Probably one of the best presidents ever, though I liked his cousin even more.

[Jim Beard]

28. You are right. More of a Democrat than many Democrats today.

Better days for progressives.

[Kaleva]

34. TR loved war.

[whatthehey]

20. Since none of the companies mentioned even approach monopolies, the relevance?

The only things Amazon has a monopoly on are Fire phones and Kindle media. The thought of Uber, a tiny presence in just 200 cities globally based in a country of 250 million private cars being a transportation monopoly is just tin-foil nuttiness, as is worrying about a room sharing board which has fewer than 6% as many total listings, repeats included (and that's most of them), than there are individual hotel rooms in the world.

[ND-Dem]

24. As of March, Amazon's share of all new book unit purchases was 41 percent. They also dominate 65

percent of all (yes, all) new online book units, in both print and digital copies. They have the largest share of the e-book market as well, with 67 percent. As for print, Amazon controls 64 percent of sales of printed books online.

http://www.thewire.com/business/2014/05/amazon-has-basically-no-competition-among-online-booksellers/371917/


Monopoly:

exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

Monopoly Definition | Investopedia
www.investopedia.com/terms/m/monopoly.asp

A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior products.

[whatthehey]

25. So 41% is nearly all to you?

That might explain the problem...

[ND-Dem]

36. And 20 years ago it was zero percent. Getting bigger every year.

It has been suggested that Amazon has monopsony power, in an article published by the Financial Times on May 28, 2014 by John Gapper, entitled "Publishers must become giants to take on Amazon". A similar point was made by economist Paul Krugman in The New York Times on October 19, 2014.[6]

The lower employment and wages caused by monopsony power have two distinct effects on the economic welfare of the people involved. First, it redistributes welfare away from workers and to their employer(s). Secondly, it reduces the aggregate (or social) welfare enjoyed by both groups taken together, as the employers' net gain is smaller than the loss inflicted on workers.

Just like a monopolist, a monopsonistic employer may find that its profits are maximized if it discriminates prices. In this case this means paying different wages to different groups of workers even if their MRP is the same, with lower wages paid to the workers who have a lower elasticity of supply of their labor to the firm.

http://en.wikipedia.org/wiki/Monopsony



Back in 2010 about 90% of all e-books were being sold in the Kindle format and only by Amazon. Publishers, authors, and other booksellers were understandably concerned about Amazon’s power in the marketplace and decided to do something about it. The major publishers adopted a new business model where the publisher would set the retail price and give the retailers a 30% commission but only under an agreement where the retailer couldn’t sell at a discounted price.

The DOJ is arguing that this arrangement (called “the agency model”) keeps prices artificially high for consumers, and they are seeking to end it....This is a victory for Amazon. Now they can return to their practice of heavily discounting e-books and discouraging competition. Amazon can afford to sell books at or below cost. They know that customers coming to the Amazon site for a cheap e-book are likely to pick up some other more profitable products at the same time.

Everyone else in the book business is alarmed and I think consumers should be too. In the short run, there are going to be some good deals for e-books on Amazon. But Amazon’s potential for monopoly power raises some pretty ominous questions. In a word, Amazon has not been shy about removing “buy” buttons from titles by publishers who won’t cave to Amazon’s terms, terms which are becoming increasingly unsustainable to publishers as Amazon consolidates its market power. Several weeks ago Independent Publishers Group announced that it could not agree to Amazon’s new and draconian demands for favorable terms. As a result Amazon refused to sell Kindle editions for 6000 IPG titles. As of now, those books are still not available at the Kindle Store.

A lot of people in our business are throwing around words that are not often used at literary cocktail parties. We say that Amazon.com is gaining monopoly power. A monopoly is a market arrangement where a single company controls all sales and distribution of a particular product. At the moment, Amazon is not a monopoly. It’s market share of e-books is down to about 60%, due to the entry into the market of major players like Apple and Barnes and Noble. To some extent this is a result of the the agency pricing model that the DOJ is seeking to undermine . If Amazon is successful at cutting out the other competitors by aggressive price competition, it will once again have a monopoly on the sale of e-books with the help and support of the Department of Justice. A most ingenious paradox. Your tax dollars at work.

At the moment, we have an oligopolistic structure in the sale of e-books. An oligopoly is characterized by a small number of producers or distributors. Almost all e-books in the US are being sold by Amazon, Apple, Barnes and Noble, Google, and Sony. A lot of industries are oligopolistic. And it doesn’t necessarily pose problems for competition as long as the parties are not acting in concert to control prices or limit supplies.

There is another relevant economic concept: Monopsony. This is distinguished from monopoly because it describes a market with only one buyer that forces sellers to accept lower than socially optimal prices. The decision by the Department of Justice to litigate against Apple and the book publishers will help establish a market for e-books where Amazon will be the only seller of e-books (a monopoly) but also the only buyer of e-books from the publishers ( a monopsony).

This is a truly alarming situation for an industry that can only thrive in a diverse marketplace. We are, after all, in the business of disseminating ideas. And a monopoly of the marketplace of ideas is an enormously troubling development for those of us who see books as something more than just another consumer product.

https://andyrossagency.wordpress.com/2012/04/11/monopoly-monopsony-and-oligopoly-in-book-publishing/

[whatthehey]

45. So - what's 41% again?

[bravenak]

26. Yes. And authors get much more of the money for the books they sell.

If you get a KDP account they list the percentage share. It goes up to 70%/30%, in favor of the author. Many independent authors have found recognition and made alot of money by releasing their self published books through KDP. Hugh Howey is one of them. I got the first installment of Wool for free, and have gone on to purchase all of his books, even pre-ordering The Shell Collector in the autumn. Great series of books, and thanks to the ease of use he is now one of the top Dystopian Authors.
Amazon also allows download of many of the great literary classics for free. I have many of them.
They also offer for free WPA books called slave Narritives, that document the lifes of Slaves in their own words.

[Jim Beard]

29. Stephen Colbert

is not a fan of Amazon and he is also an author.

[bravenak]

31. He is very wealthy.

Authors can get 3.50 for every 5.00 book they sell. His main profession is not as an Author. He doesn't need to rely on his book sales to eat. Other Authors do. It is hard to get published by a normal publisher.

[DavidDvorkin]

32. Colbert is irrelevant to the discussion

He's a TV celebrity with a huge fan following. Any book he writes will get a very big advance and very big sales. The pre-Amazon publishing model works extremely well for people in his position. The vast majority of writers are in a completely different boat. For them (and I'm one of them), Amazon has been a godsend.

[ND-Dem]

37. ...

Oligopoly (noun) -- A situation in which a particular market is controlled by a small group of sellers.

I know the Kindle Market is definitely an Oligopoly -- but just how bad?

Here's my perspective . . . .

The best I ever did with any of my books was one that ranked -- for a very BRIEF while -- in the top 20,000 non-fiction books.

What did that relate to sales-wise? About 7 books a day -- and (with a $2.99 price tag) about $15 a day. Not bad by any accounts -- but hardly enough to pay the mortgage, pay my kid's daycare, etc. (Now, my books rank in the top 150,000 -- resulting in 1.5 sales a day or about $1 a day!)

What shocked me was that that this book -- at its peak -- was in the top 1% or 2% of all books -- and it only made $15 a day. Now, probably in the top 5% or so, it only makes $1 a day!

Just how bad is this oligopoly?

If my top 5% book makes $1 a day -- I can only image what the "bottom" 95% make!

Are like the top 100 books making like 99% of the Kindle sales?

Are like 90% of all the "bottom" books -- literally -- selling less than a book a day?

https://kdp.amazon.com/community/message.jspa?messageID

=626038

[bravenak]

39. How did you define your tags?

I see alot of books that are improperly catagorized and some folks do not tag their books in the proper category. Also, there is alot of social media marketing that needs to be done.

Did you have an Author page?
Did you have a website? Was it SEO optimized?
Did you link your site to your author page?
Do you use social media effectively? Twitter? An Authors blog?
Do you comment on other Author's blogs and linkback?
Do you answer questions in Quora or Yahoo answers to get your name out there?
Do you have at least a few books Published?
Did you have a good cover and blurb?
How was your marketing?

All of these things affect sales. If a person sees your book, but cannot find anything about you, it may be a deciding factor in purchasing. You may think about re-releasing your book with a better cover, and do a bit of marketing.

[ND-Dem]

43. Amazon’s markup of digital delivery to indie authors is ~129,000%

So my book about travel came out last week! Think about buying it directly from me: This Book Is About Travel .mobi (Kindle Version) or This Book Is About Travel .pdf. A pretty exciting time. I’ve decided to write a few posts covering the launch and lessons I’ve learned. I self published it (wrote, designed, marketed and even did the layout for it) and am really proud of the project.

This post is about the where the sales of the book are coming from, and why Amazon takes 48% of digital book sales. Surprising eh? I thought Amazon was the BEST for indie authors, right? We will get into that later...

So, I’m at the end of my week, time to see just how the sales ended up and how much cash I’m taking home for a few months of work....



Wait, Amazon pays out the worst? What? This can’t be right! They are the best right? Everyone loves them. I love them. I dig a bit deeper and find this little gem:

Avg. Delivery Cost ($) 2.58.

So for every $9.99 book I sell I, the author, pay 30% to Amazon for the right to sell on Amazon AND $2.58 for them to deliver the DIGITAL GOOD to your device. It is free for the reader, but the author, not amazon, pays for delivery.

Use Amazon to run your website: .01 to download a file. Use amazon to sell your book: $2.58 per download + 30% of whatever you sell. Amazon’s markup of digital delivery to indie authors is ~129,000%.

So want the kindle version and don’t want to give Amazon 50% of the sale...?

http://andrewhy.de/amazons-markup-of-digital-delivery-to-indie-authors-is-129000/

[bravenak]

44. Then don't sell on Amazon.

They have the easiest to reach location. People know Amazon. They don't know all of the other places as well.
And the rate u posted is far higer than you get per book with traditional publishers. And they have free books. I plan on releasing one through there. The more books you have listed, with good reviews, the better your books sell. Many Authors publish the books on multiple sites. So, publishing on Amazon is not actually costing anything. Just increasing presence.

You can pick your royalty plan.

[DavidDvorkin]

33. Amazon dominates book sales but does not control them

Last edited Thu Feb 12, 2015, 07:28 PM - Edit history (1)

The problem with bemoaning Amazon's influence over the book market is that such complaints ignore how easy it is to compete with Amazon. Anyone can create a competing Web site. There are many such sites, big and small. Amazon's dominance in online sales in general doesn't rest on keeping competitors out but on its product offerings and prices. When it comes to e-books, that advantage disappears; all Amazon has going for it is name recognition.

Before e-books, Barnes and Noble specialized in moving into an area and driving small, independent bookstores out of business. B&N's dominance in sales of printed books reached such a level that publishers consulted with B&N before buying books from authors: if B&N didn't think a book would sell well in its stores, the publishers would decline to make an offer to the author. Amazon/e-books/Kindle destroyed that dominance and opened the doors to far great literary diversity. At the same time, the decline of B&N has led to a resurgence in small, independent bookstores.

Thank you, Internet and Amazon.

[ND-Dem]

40. If a player as relatively powerful as Barnes and Noble isn't offering much competition, how much

do you think "anyone" with a "competing" website will offer?

99% of ebooks don't make enough money to keep their authors in cigarettes.

Small bookstores are going out of business. There has been no resurgence such as you claim.


Today, there are around 10,800 bookstores in the U.S.

Though it might seem that bookstores are closing at a rapid pace, there are actually still an impressive amount of bookstores in the U.S.; about 10,800 in all, ranging from small, independent retailers to major chains, according to census data from 2002. Yet that number is considerably lower than the number recorded in 1997 when there were 12,363 stores, a 12.2% drop.

More than 1,000 bookstores closed between 2000 and 2007.

Americans may still have access to a healthy number of bookstores, but that doesn’t mean that there haven’t been major closures over the past decade. Over a seven-year period, more than 1,000 bookstores closed down for good. Since 2007, hundreds more have closed, including more than 600 Borders stores.

The number of independent bookstores dropped from 2,400 to 1,900 between 2002 and 2011.

A big chunk of the booksellers who have closed their doors have been independent retailers who’ve found it hard to compete with online shops and e-books. The American Booksellers Association, a trade group for book retailers, has seen membership drop by 600 stores since 2002. Two decades ago, there were more than 4,000 independent bookstores in the U.S. Yet it’s not all bad news. Recent statistics show that the number of bookstores may finally have stabilized, today comprising about 10% of the industry’s retail market overall.

Even mega-chains of bookstores are suffering.

Big-box book retailers like Borders and Barnes & Noble may have once driven small, independent booksellers out of business, but today in the shadow of e-books and online retail, even mega-chains are suffering. Stores like Waldenbooks, B. Dalton, and Crown Books are long gone, but the biggest casualty has been Borders, who just last year closed more than 600 stores after filing for bankruptcy. So far, Barnes & Noble seems to have fared better, due in part to an early investment in an e-reader and online publishing platform but they’re not out of the woods. Things aren’t looking good for the mega-chain, even with a solid digital investment (Nook accounts for 27% of the digital market)...

http://oedb.org/ilibrarian/12-stats-on-the-state-of-bookstores-in-america-today/

[hunter]

19. Keen claims he is "not a Luddite," but I am.

When the big money dinosaurs expire, the little birds and mammals will thrive.

I love film, I still buy it, I develop film myself sometimes, but even so, most of the pictures I take now are digital.

And truth be told, I always feel a little bad using film, because silver and all the other chemicals associated with film are a toxic brew. Worse than digital, per picture, undoubtedly yes, but then again digital allows us to take so many more pictures that all the coal burned to make the digital cameras and light up all the digital computer screens may far exceed the environmental damage done by film.

Film fanatics are now dependent upon what is rapidly becoming a small craft industry, very Luddite in character, and held together worldwide by the internet.

Another example of this phenomena is small breweries making craft beers, or even home brewers. The internet brewing community is a source of innovations, inspiration, and education. Little birds and mammals, even the small shops fabricating a wide variety of equipment for small brewers.

Forget Amazon, look at Project Gutenberg ( http://www.gutenberg.org ).

Forget Microsoft, Apple, and Google Android, look at Debian or any of the free Open Source Linux and BSD operating systems.

It's well past time to create a society where education is free and nobody is thrown out on the street hungry and without medical care simply because the business model of some giant corporation was changed by the rat bastards who manage it, or disrupted by technological innovation.

The creation of a humane society might very well be organized on the internet.

Most people in my extended family are artists or crafts people with day jobs, sometimes related to their art of craft, sometimes not. I have one brother who was rapidly climbing a corporate ladder, and making a lot of money too, but one day he just said "Fuck it" because he'd gone years without making any art, and he got tired of taking calls at two in the morning about problems that were not life or death or of any great importance at all except in the twisted crazy world of corporate policy, politics, back-stabbing, ass-kissing, and cover-ups.

I want to live in a world where everyone has the opportunity to find their own knack -- a craft, an art, a skill, a science, something that makes them happy, and something that makes the world a better place for them being here.

Big money corporate wage slavery, even with "good" wages, is far away from that Luddite ideal.

[ND-Dem]

41. "Forget Amazon, look at Project Gutenberg"

Gutenberg volunteers scan out of copyright books. there's no new content. Plus no one gets paid. Very nice, but someone needs to get paid to be able to afford a computer to read Gutenberg books on.

That's the flaw: people aren't getting paid/have fewer jobs = fewer customers.

You may want to live in a world were everyone has the opportunity to find their niche -- but a world with a bunch of hungry jobless people isn't that world.

[closeupready]

23. No, I don't. The internet is a magnificent technological development in human history.

It is a tool which can be used to enlighten humanity, but also to exploit and abuse it.

[pipi_k]

27. And that...

is really the whole story in a nutshell.

There will likely never be anything mankind does that won't have good and bad attached to it. Negative and positive.

[closeupready]

30. Exactly.

[Rex]

35. The net is just another commercial endeavor now.

We are programmed from birth, until death.

[hunter]

38. I've been on the 'net since 1979, starting with a 300 baud modem.

I ignore most commercial stuff, and even the ads on any youtube videos I happen to post here don't bother me much.

Your ads may be different.

[FSogol]

42. Was Hannah Bell trolling forums in 1979?