Every time you download a song or watch a streaming service, the creators of that content share their paycheck with whatever big tech company has delivered it.
Corporate monopsonies - where buyers hold power over sellers - are killing our creative industries, argue journalist Cory Doctorow and law professor Rebecca Giblin in the new book Chokepoint Capitalism.
Photo: Christian Wiediger / Unsplash
Listen to the full interview with Cory Doctorow
Chokepoint book cover Photo: supplied
Intermediaries in the creative industries are not new, Cory Doctorow tells Jesse Mulligan. What is new is a massive concentration of power in so few hands.
“With publishing, it's five companies; with record labels, it's three, four movie studios... [There are] two giant ad tech companies that control the revenue for a lot of creative material on the internet.
“And with one giant ebook retailer that's also the world's largest audiobook retailer, Amazon, it becomes very hard to reach your audience without going through one of these companies, one or more of them.”
Policy failure has brought the publishing industry to this point, Doctorow says.
“Forty years ago, there was an official decision taken in most countries in the world, to no longer enforce competition law, and to allow firms to grow by buying one another by merging with one another ... and by engaging in predatory practices, like predatory pricing.”
Amazon sells ebooks for less than they pay to buy them, he says.
“And they added to that using a technology called Digital Rights Management, it's a kind of encryption. And in most countries’ law, including in New Zealand, it's against the law to remove this encryption, even if you never infringe a copyright, and even if the copyright holder authorises it.
“So once Amazon sells you a book with its encryption on it, even if I wrote the book and hold that copyright, I can't give you permission to move that book to another library.
“And that means that Amazon now controls you. And to continue to reach you, I have to sell out to Amazon. And that's the difference is the massive concentration, which has been backstopped by law and technology that has made it almost impossible for creators to reach their audiences without doing business with one of a small number of firms who don't have to compete with one another who instead converge on equally terrible terms across the board.”
In the live entertainment arena, the American company Live Nation has similar power, Doctorow says.
“Live Nation is the parent company of a ticketing giant called Ticketmaster. Ticketmaster itself is a kind of roll-up that involves mergers with many of the other large ticketing firms most notably Ticketron that resulted in getting more than 90 percent of the ticketing market.
“Live Nation is a promotion company. They own a bunch of venues most of the large and critical venues on any kind of concert circuit in America are Live Nation venues. They also have exclusive contracts with most of the artists as you might imagine, an artist who wants to play in those can be in Vegas into signing an exclusive deal because otherwise, they may not get to play in these important venues."
Ticketmaster also operates in secondary markets for ticket-selling, he says.
“They work with touts to buy all the tickets before the fans can buy them, paying the artists a very low royalty and collecting a modest commission, and then resell them on their own secondary market where the tickets flip for much higher rates where the commissions are much higher, and the artist gets none of it.”
It is not unusual for corporations to lobby governments in their own interests he says,
“When our industries were diffuse and diverse, when there were say 100 companies in a sector instead of 3, there were always some companies that could credibly speak against the priorities of others.”
So what solutions do Doctorow and Giblin offer in their book?
Systemic change is the only answer, Doctorow says.
In 2019, the European Union legislated for the creator's right to transparency.
"That allows all creators to find out how their works are being sold, how much money is being made, each time that work is sold, and how their share of the royalty is calculated.”
A group of authors published on Audible - which is owned by Amazon - recently took action after uncovering some opaque accounting.
“Many Audible authors, led by a writer in Perth, Australia called Susan May, discovered when they looked more closely at their royalty statements that they were being stolen from.
“That theft had been disguised because the way that the royalties were calculated was extremely opaque. And it wasn't until there was a data glitch that revealed a whole bunch of extra data that allowed these creators including a woman in the UK Colleen Cross, who's a retired forensic accountant, who now writes forensic accountancy crime novels, so she was particularly well situated to go over these royalty statements, and allow them to understand that hundreds of millions of dollars had been stolen from creators.”
If Audible's royalty statements had been clear to start with, this wouldn’t have been possible, Doctorow says.
He urges individual creatives to get involved in co-ordinated group action rather than micro-actions.
“You're not going to recycle your way out of climate change, you're not going to shop your way out of monopoly. These are systemic problems that demand systemic solutions.
“The best thing that an individual can do is join a movement. And there are lots and lots of different movements around that are fighting against monopoly power.”
It's not only creative people who should take up the fight, he says.
“Everyone who has a problem with concentrated corporate power is fighting the same fight as the artists who are trapped in chokepoint capitalism.”