by Ellen Harvey
Originally Posted on Book Business March 11, 2016
The Digital Book World Conference & Expo (DBW) notably shifted its attitude towards major technology platforms this year. The platform giants Amazon, Apple, Facebook, and Google were ominously dubbed “The Four Horsemen.” They were referred to as such throughout the conference, and the language used to depict these companies matched the apocalyptic theme. Described as more powerful than most nations in the world and largely free from the confines of the law, these four technology platforms were blamed for the decline of all other forms of media and, it was implied, the decline of society itself.
In the opening keynote of DBW, Jon Taplin director of the USC Annenberg Innovation Lab, explained the damage the Four Horsemen had already done. He said that over the course of the digital revolution, “$50 billion moved from content creators to platform creators. . . The digital revolution isn’t just coming after artists’ incomes, it’s coming after everyone’s jobs.”
In a Wednesday keynote on antitrust and technology, Jonathan Kanter, an antitrust partner at the law firm Cadwalader, Wickersham & Taft, explained that these platforms have captured this market share by becoming massive intermediaries that control the moneymaking side of content, including advertising, search, and adtech. “As these intermediaries get bigger, more money will be stuck in the middle and less money goes to the individual,” explained Kanter.
So how can publishers combat these massive entities? Antitrust enforcement is key. Taplin said that there are legal precedents in the U.S. that support a more equal distribution of technologists’ power, like the antitrust action taken against Bell Laboratories several decades ago. The government demanded that all of its licenses be provided for free for other companies to use. That technology included the microchip, the transistor, the microwave, and a slew of other inventions that consumers and companies have come to rely on. “Think of the possibility if Google had to do the same today,” said Taplin.
Kanter explained that antitrust efforts should focus on areas where the Four Horsemen sacrifice the well-being of their platform to protect their power. “Antitrust laws don’t penalize big,” he said. “They penalize exclusionary conduct.” He gave the example of Google promoting its own products in search listings over those of its competitors. Currently an antitrust case in Europe is investigating this practice. Kanter encouraged that similar action be taken in the U.S.
Both Kanter and Taplin said during their respective keynotes that disintermediation is an effective way to lessen the monopolistic power of the top technology platforms. Kanter identified disintermediation as the next revolution of the digital era, and the biggest fear of the Four Horsemen. “They’re worried about people being able to go direct to a user or buyer,” said Kanter. Taplin added that today’s low-cost distribution systems makes direct sales more attainable for content creators than ever before. He cited the creation of Sunkist, a cooperative of citrus growers that decided to bypass distributors to sell their products directly to retailers, as an example of disintermediation’s success. Taplin added that the Sunkist model is one that book publishers could emulate.
It’s interesting to note the rapid change in rhetoric at DBW, and perhaps a bit sobering too. I remember at last year’s conference representatives from both Apple and Amazon were present to share their plans for the future of the ebook. Although attendees questioned whether these technologists had publishers’ best interests in mind, the sentiment seemed to be that ultimately these tech giants were a necessary evil. Publishers had to play nice in order to succeed. If this year’s conference is any indication, it seems that book publishing leaders are prepared to get much feistier in order to protect their businesses.