Thursday, February 11, 2010

An Essay on Shifting Power Centers (pack a lunch!)

(In which our blogger pretends to be an economist and writes a long-ass essay providing big-picture, historic context on what the changing economy means to writers, musicians, and other artists.)

Part I: The Decentralization of Power

The Power of Coordination

Centralized power is corollary to the human condition. You don't need to spend more than a few seconds thinking about the large- and small-scale evidence in the world: there are no nations without governments, no lasting groups without leadership, little action without common direction.

We are tribal; during one of the most recent ice ages, the human race was decimated, and, arguably, rugged individualism and self-efficacy only got one so far when food was scarce and survival--breeding, hunting, gathering--took more energy than a body could produce on their own. It took a village, literally, to raise a child. Scattered, uncoordinated peoples died, and those with common goals and direction passed on their genes to us.

Hence our natural propensity to join, to socialize, to form cities where we can be close to each other and erect buildings in those cities to bring us closer still, and leaders within those structures to keep us moving in a common direction. Nobody questions why the workplace needs a boss, or why the church needs a patriarch. It just feels right.

Fast forward a few dozen thousand years, and we have moved several notches higher on Maslow's Hierarchy; and, no longer primarily concerned with the daily drudge of staying alive, we are now free to focus on more complex social dances like art and scientific inquiry and self-actualization.

And power.

The natural progression always moves toward power. When we have abundance, we share with those who would share with us; when there are subsidies, we barter; when there is scarcity, we horde. Again, it's what comes naturally to us.

The Tipping Point

The propensity in the post-survival model seems to be to start as individual contributors bartering what they have--farmers/food, craftsmen/goods, laborers/labor, soldiers/fighting/defending--but always seems to move toward top-heavy supplier models.

For example: a ten hectare plot, split evenly between ten farmers. Each grows a unique food, and they trade amongst each other. They have more balanced diets, healthier children, longer lives than if they would if did not trade. One farmer is bought out by (or taken over by) a neighbor, who then has two hectare and, presumably, more bartering power to buy out the other eight or possibly hire people to move them out and take the land for him. After many years of dealmaking, he owns the entire plot, and he keeps on the original nine farmers as serfs who work the land for the landlord, who now sits on his ass in a large house situated on an eleventh plot down the way; the serfs are given a pittance of food for their labor--just enough to survive, not enough to barter. They are doing the same work, but for less benefit, while the excess benefit now rolls uphill to pay for the landlord's new, opulent lifestyle.

(This is not a tear on capitalism, mind you; on the contrary, the only way to keep the farmers from consolidating and creating power hierarchies would be to have someone with a bigger stick--the state, the church--to intervene. The problem there is that there is always ulterior motive by any party involved--power, by and large--and anyone with the power to control the landlord will want their toke at the end of the day as well. We're better off with the landlord.)

The landlord's tower of control gets higher and higher as he amasses more land and more serfs; he becomes a Lord or a King, and levies taxes on the already-poor serfs working his land. Eventually, the serfs are fed up, and they rise together to reset the board in their collective favor--storming the Bastille, declaring sovereignty from a monarch, staging a paramilitary coup, etc.

History is riddled with examples. The towers fall, but only temporarily. The pieces are collected by those below who will, inevitably, begin making towers of their own. It's a repeating cycle, and it's been in motion probably since the first agrarians made plow blades from ox ribs and increased their productivity, thus moving from sustenance to a business model. Technology, as a rule, seems to drive the downward-and-outward power shift.

Which brings us to the age of computers and worldwide connectivity. If you make your living (or want to make your living) creating goods in the age of new media--music, art, technology, literature--it's important that you understand that we are in that last stage: the towers are crumbling, and it's up to us to pick up the pieces and build our own fortifications. This is part of the ongoing cycle of production, the part we can call the renaissance of decentralization; and our window of opportunity is finite.

Part II: The Power of Decentralization

Beating Our Ploughshares into Cisco Routers

The cycle continues because new technology is, by-and-large, uncontrolled. The King's smithy may have figured out how to forge swords from steel, but that doesn't stop the peasants from figuring it out and arming themselves to the teeth. The internet may have been developed by DARPA, but once students and hobbyists got their hands on it, the playing field got horizontal faster than Tiger Woods at the Playboy Mansion West.

But, for the most part, innovation does not come from the top down. It comes from us, and it belongs to us.

That's the power; that's the magic. From a technology standpoint, we are a million monkeys whacking away at typewriters, and every now and again, one of us will inevitably come up with something brilliant, simply because we've been given the opportunity to do so. The tools to do great things are out there for us to use, as long as we continue to have the ability to use them freely.

Again, narrowing our focus to creators of art--literature, music, graphics, etc--we know our markets. We can look around and see who lives in the tallest towers, who controls the environment and dams the flow of information and resources in their own favor. We talk smack about them every time they do something that bolsters the power structure, even if they are the ones we rely on for our bread and wine rations.

The Queen is Dead, Long Live the Queen

Amazon and Walmart sell Stephen King's new book for one third of the market value, and authors rage. Amazon presses for price fixes for e-books, and publishers revolt. Publishers insist on higher prices for print and electronic books, and consumers slam their wallets shut.

Online news outlets begin to charge for content, and the world collectively balks.

Apple sells music with digital locks, and music buyers move their business to alternative suppliers. Independent musicians find that they can't sell their music on iTunes without an aggregator (like a large label), and that their sales figures aren't actually counted by Nielsen/Soundscan and they, therefore, aren't legitimate artists in the eyes of the industry. After the LiveNation/Ticketmaster merger, the number of venues to see reasonably priced music drops significantly.

Artists like Amanda Palmer and Trent Reznor opt out of the music label system completely, because they have come to realize that although they are giving up the rights to their own work to provide revenue the labels that "support them", they aren't really making much money for their life's work after the piper has been paid.

Once-friendly outlets for user-controlled media like YouTube begin to lock down/out content that does not meet their standards for profitability.

Music and book publishers put more of their resources toward a much smaller stable of dependable, albeit generic and crowd-pleasing, talent.

And in all of this turmoil and finger-pointing, there isn't a single bad guy to be found. These are free market dynamics, nothing more, nothing less. And, just as importantly, these are early indications of top-heavy towers swaying in the wind.

Will they fall? Will there be people below to pick up the pieces, and put the recovered resources to use for their own good?

I don't know for sure. Nobody does. It probably will happen, in one fashion or another. If you consider that many of the public moves we see from these tower masters are defensive, finding ways to divert more resources away from customers (fair use rights for "purchased" media, higher prices) and suppliers (smaller payouts for work, fewer opportunities), it really does seem inevitable, and it seems near. It does not seem sustainable that you can treat everyone in your supply chain poorly and continue to survive.

Sooner or later, the peasants will rise up and topple the throne, loot the treasury, and find their own way to make a living. The result will be an inversion of the power structure, a disaggregation of resources away from middle-men and back to content producers. The crown deposed, the farmers reclaim their plot of land and sow their seeds. And the cycle begins anew.

The Survivors

This essay wasn't intended as a history lesson, nor a primer on market economics. Zeus knows, I 'm not an expert in either. I'm just a schlemiel trying to break into the glamorous and exciting world of literature.

And, to the best of my limited ability to read market trends, I'm trying to provide context for what is likely to happen next (and, arguably, what is already happening).

Resources are finite, as we saw in the farmer example above. It takes resources to create products, and it takes resources to sell products, and it takes resources to acquire products. If some--or a lot--of the resources are being used to sustain the machine that gets your product from the workshop to the street, the opportunity is upon you to reclaim some of those resources and put them to work for you in a way that they are not being used now. The game-changer, the lever that will allow you to move the Earth, is cheap computers and fast, affordable internet access.

You can make it work for you as long as you are willing to reframe your idea of what it means to produce successfully.

Are you willing to sell a thousand song downloads at $.80 profit apiece instead of ten thousand at $.08, knowing that you won't have someone helping you beat the street, placing ads, coordinating, selling, managing your website, and bookkeeping for you, and that it is highly unlikely that you'll ever be as big as GaGa or Muse?

Can you deal with making the same net income from a print-on-demand book that you had to pay someone to edit, has no ISBN and features cover art from as you would from a book that your publisher edited, your agent managed the contract for, and some PR team in Manhattan is actively shilling for you? Maybe a book that doesn't come in physical form at all?

If you can handle that reality, then this may work for you. But if you really like having people in ivory towers doing the work for you while you sit around hoping that your big break is just around the corner, knowing that you can't settle for moderate income with fewer sales and more work--well, you probably have good reason to be stressed about the new economy. Sorry.

Everyone else, keep looking up. These are exciting times the likes of which we may never see again. If you can't stomach the way it's being done now, this is your chance to find another way.


Aaron Polson said...

I had to read this a couple of times and digest overnight. Brilliant. "Do it yourself" in film and music has been a badge of honor for years. Do it yourself in publishing...especially fiction...not so much. Why is that? Don't gatekeepers exist for music and film, too?

These are indeed exciting times.

Jamie Eyberg said...

brilliantly done. It is a matter of being the innovator in this vicious circle and not being the last man out. Thinking ahead of the curve instead of coming up just behind it to make our ideas work for us instead of against us.

Jeremy D Brooks said...

Thanks guys. I think I had a backlog of thoughts on this topic and needed to vent.

Aaron: exactly...there are some bad fan flicks out there, but they tend to get credit for trying. Maybe authors are held to higher standards? I don't know. As long as we're careful self-editors (and get some outside editing counsel), POD shouldn't be as stigmatized as it is.

Jamie: that's what I figure, too. The wheel is going to spin, and if you can recognize that, you can hopefully be at the right part of the wheel at the right time. Hopefully.

Barry Napier said...

I've thought about this as well. Aaron hit it on the head, too. I have often wondered why authors don't take the time/effort to PDF their manuscripts in an attractive way and sell them digitally via fre sources like Wordpress and Blogger. of course, if you are anti-e-book like me, you could go the LuLu route. I don't know...too much to think about. Awesome post!

Jeremy D Brooks said...

Thanks Barry.

I think a lot of us are just wishing for the dreamboat book deal and don't want to sully it by becoming "a POD author". Ultimately, though, we're running out of friggin' choices. I am definitely considering e-books and Lulu for when I finish prettying Amity up for querying.

Anonymous said...

I really hope that POD sheds its current stigma. It can be extremely economic and can look beautiful. Shock Totem is POD and when you hold it in your hands, it's a substantial, well-made book.

Times are a-changing.