The Raw Deal Amazon and Spotify Offer Artists

The Raw Deal Amazon and Spotify Offer Artists

In 2012, Jeff Bezos claimed in a letter to Amazon shareholders that the company was serving humanity by eliminating old-fashioned “gatekeepers,” like book publishers, that stood between creators and their audiences. Today, nearly three decades since its founding, the company has indeed replaced these businesses with an even bigger and more centralized gatekeeper: Amazon itself.

Think about the art and culture you consume—the books, music, movies, and podcasts. You generally know the creators by name and credit them for their work. The Love Songs of W. E. B. Du Bois, for instance, is clearly Honorée Fanonne Jeffers’s novel, not her publisher’s. It’s certainly not Amazon’s novel.

But your relationship with—and, more specifically, your financial support for—Jeffers and other creators is not so straightforward. In their new book, Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We’ll Win Them Back, Rebecca Giblin, a professor at Melbourne Law School, and Cory Doctorow, a technology activist and best-selling science-fiction novelist, portray creative markets not as two-way freeways but instead as hourglasses, with authors, musicians, and other artists at one end and consumers at the other. Lodged in the middle of the hourglass are the chokepoint capitalists: the Amazons (and Spotifys and YouTubes and Apples and Googles and other “predatory rentiers”—companies that make money by charging “rent” to anyone who wants to use their services). These companies are different from the standard middlemen that exist in many capitalistic relationships between buyers and sellers, because they have seized complete control of the channels by which culture reaches its audiences.

From the consumer’s perspective, the problem might not seem so immediately obvious. Books on Amazon are cheap and arrive quickly. Spotify offers tens of millions of songs and podcasts for less per month than what we pay for a single CD. But for creators, chokepoint capitalists—the firms that control access to their work—are an exploitative nightmare. Chokepoint capitalists don’t just offer a means for creators and audiences to exchange art for money; they provide one of the only means by which that exchange can happen—while shortchanging creators by setting unsustainably low prices for their art, and skimming off most of whatever profit that art manages to generate. But every industry is vulnerable to the price-setting and power-concentrating characteristics of these firms. These struggles, in other words, are a warning for the rest of us.

One of the earliest indications of just how brutally Amazon would come to wield its power came in May 2004, when Melville House, a fledgling independent book publisher, found itself at the mercy of a chokepoint. To sell its books on Amazon, Melville was told that it needed to hand over fees to boost its titles on Amazon’s website and in its algorithms. Unexpectedly, Melville refused. As George Packer reported in The New Yorker, one of the publisher’s co-founders, Dennis Johnson, even publicly called Amazon out for bullying publishers while withholding sales information from them, calling its tactics “blackmail.” The following day, the “Buy” button vanished from Melville’s books on Amazon.

Only 8 percent of Melville’s sales came from Amazon, but Johnson told Packer that the publisher couldn’t afford the sacrifice. “I paid that bribe, and the books reappeared,” he said. Giblin and Doctorow describe Amazon’s shakedown of Melville as an early example of “chokepoint capitalism.”

Musicians are hardly better off. Spotify claims to operate under its stated mission “to unlock the potential of human creativity … by giving a million creative artists the opportunity to live off their art.” What Spotify actually does, Giblin and Doctorow show, is serve as “a gatekeeper between musicians and listeners.” Spotify is the go-to platform for a third of the planet’s music streaming, and whether an artist’s song appears on one of its popular playlists can make or break their career. The company is in a tremendously powerful position when it sits down to negotiate how much it pays music labels to license their content. That’s bad for the labels, sure, but it’s far worse for artists, who are forced to accept whatever terms their desperate labels agree to.

Giblin and Doctorow tell the story of Zoë Keating, an independent composer and cellist who shares her Spotify earnings publicly. In September 2019, they write, Keating took home $753 from the platform. That sounds decent until you learn that Spotify listeners played her songs more than 200,000 times that month. Earnings are even more minuscule for artists signed to labels: Giblin and Doctorow estimate that they might take home $0.0009 a stream before taxes, and that’s if they’ve secured decent royalty terms. “For those artists locked into decades-old contracts,” they explain, “it might take a hundred thousand plays to generate enough to buy a $20 pizza.” YouTube, one of the most widely used music services in the world, is no friendlier to artists. Regardless of the platform, most creators face a lose-lose proposition: They work invisibly, or they work essentially for free.

Johnson felt compelled to pay a “bribe” to Amazon even though the company was the source of only 8 percent of Melville’s book sales. Eight percent doesn’t sound particularly monopolistic. Neither does Spotify’s 31 percent market share in music streaming.

But Amazon and Spotify aren’t selling books and music that they’ve created themselves. Instead, as marketplaces, their power lies in their strength as buyers. Their leverage comes not from monopoly but from “monopsony,” the term for a market in which “buyers have power over sellers,” as Giblin and Doctorow describe it. As an author (or a publisher), if you don’t sell your books on Amazon—and accept whatever terms Amazon dictates for you to do so—much of your potential audience won’t even know your books exist. What’s more, “Monopsony power … can arise at much lower concentrations than monopoly does,” they write. A buyer responsible “for just 10 or 20 percent of a producer’s sales can have substantial power.”

What’s true for Amazon in publishing and Spotify and YouTube in music is true for countless sectors and industries beyond the arts. Giblin and Doctorow’s book is such a valuable read because “chokepoint capitalism” is a profoundly clarifying way to think about the economy as a whole. Simply put, economic chokepoints discourage, rather than encourage, innovation and creativity by concentrating power in fewer and fewer hands. And they’re everywhere.

Consider the physician whose only path to a medical career runs through her town’s sole hospital, which is more and more likely to be owned by a private-equity firm bent on short-term profiteering by overworking and underpaying staff. Or the retail worker forced to accept whatever hourly wage and working conditions that Walmart—with its buying power and economies of scale—happens to offer. Despite professing enthusiasm for free markets and “disruption,” what many executives actually seek, and what investors and venture capitalists reward, are practices that smother competition, rig markets in their favor, and shelter incumbent firms from potential threats.

Whether in publishing or poultry, once a company has created a chokepoint and established control over the pipeline between buyers and sellers, it can be almost impossible for a potential competitor—no matter how original its ideas, disruptive its strategy, or superior its product—to find a workaround. “As monopolies and monopsonies suck up ever more money and opportunity, more and more of us are being shaken down,” Giblin and Doctorow write. “What’s been happening in the creative industries presages what’s coming for everyone else if chokepoint capitalism is allowed to reign unchecked.”

In his 2013 book, Who Owns the Future?, the tech philosopher Jaron Lanier warned that it serves only the biggest and most profitable tech companies to believe that the internet we know—the ad tech, the surveillance, the distractions, the manipulation—is the only conceivable internet. “Because digital technology is still somewhat novel,” Lanier wrote, “it’s possible to succumb to an illusion that there is only one way to design it.”

Our similarly novel incarnation of the modern creative economy suffers from comparable illusions that the ease of the Kindle, say, or the convenience of Spotify requires sacrificing creators’ livelihoods and well-being. Chokepoint Capitalism offers an admirable antidote to the fiction that our economic systems operate the way they do because that’s how they are, rather than because a few companies managed to take early advantage of new technologies to manipulate those systems for their own benefit.

You might not expect to find much hope in a book about the exploitation of people trying to earn a living doing what they love. But Giblin and Doctorow make a convincing case that taking on Big Tech and Big Content—seemingly a lonely and demoralizing endeavor—is, in fact, an opportunity for community. Indeed, the fight demands community. “We’ve organized our societies to make rich people richer at everyone else’s expense,” the authors conclude. “If we’re going to do something about it, we’re going to have to do it together.”

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