Chokepoint Capitalism's Stranglehold on the Arts
Competition has been eliminated, customers and suppliers locked in, and artists exploited, while monopolies prosper.
We love to shine light on injustices and spark change, and recently discovered a book sharing this mission. It’s called “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back.”
It’s an important read, and our new episode features one of the book’s co-authors, Cory Doctorow. He breaks down how market concentration across industries combined with lax or virtually non-existent anti-trust action enable corporations to consolidate money and power, and effectively screw over creators and artists.
“The reason creative workers are receiving a declining share of the wealth generated by their work is the same reason all workers are receiving a smaller share—we have structured society to make rich people richer at everyone else’s expense,” Doctorow and his co-author Rebecca Giblin write.
It’s appalling, and impacts every major industry.
“Spotify ties artists and labels to its platform by training listeners to outsource decisions about what they should listen to. Amazon does it by chaining books with digital locks that are illegal to remove, and by persuading you to buy a year’s worth of shipping up front,” the duo writes. “Record companies lock listeners in by requiring their artists to sign century-long contracts… Mobile phone manufacturers lock in customers by controlling where we can get our apps. Facebook and Google do it with news publishers by controlling all sides of the market for ads, as does Live Nation with the market for live music. And Google does it by using its search engine to funnel users toward YouTube instead of competing video platforms, and by subsidizing its operations so it’s hard and harder for anyone else to compete.”
Why We Covered This Topic
As a podcast at the intersection of journalism and hip-hop, this felt like a topic we simply couldn’t ignore. It’s especially important when you consider the many charges artists have leveled against industry executives over the years.
Doctorow and Giblin cited a survey conducted by Rebecca Gates that lifted the veil on how unfairly compensated artists are for their work:
Rebecca Gates, who surveyed musicians for the Future of Music Coalition, says even well-known artists are struggling. “I’ve seen hard data for people who are in successful bands, quote unquote, festival headlining bands, who would make more money in a good retail job.”
That’s utterly shocking—but apparently, a well-known secret within the industry.
As we were conducting research, we came across this clip from an interview with the hugely popular ‘90s R&B group TLC from the Grammys in 1996. Fresh off winning R&B Album of the Year, the group candidly told reporters that they “were broke as broke can be.” Watch for yourself:
Despite the group’s hit album CrazySexyCool going 12-times platinum, making TLC the first girl group to garner diamond status, the trio reportedly took home 1 percent of the $175 million that the chart-topping album earned. TLC filed for bankruptcy in 1995.
The problem, sadly, goes far beyond the music industry and impacts nearly every aspect of society. In truly vulture-capitalist fashion, corporations have found a way to exploit the innate “human desire” for creative expression, as Doctorow and Giblin put it in their book:
Few people are willing to spend twelve hours on an assembly line or grappling with bookkeeping without being paid for their trouble. However, humans are driven to create, even when there’s no prospect of any financial return. Cultural economist and professor Ruth Towse, who spent her career analyzing creative labor markets, has documented how corporations “free ride” on the human desire to create, exploiting the oversupply of labor and precarious work conditions endemic to artistic labor markets to secure most of the financial benefit for themselves. And it’s not just writers, musicians, and artists they exploit: editors, accountants, marketers, and administrators in every creative field are similarly passion-driven, making them willing to contribute their labor for less than they might get elsewhere. This isn’t necessarily because they work for predatory businesses. But when Amazon squeezes publishers, for example, those publishers have to find savings somewhere. Naturally, they find most of them in labor costs—“that most bendy and squishable portion of an enterprise’s expenditure.”
It’s spectacularly cruel. Yet they get away with it.
What You’ll Learn in This Episode
You’re going to hear a lot about the term “chokepoint capitalism.” Here’s how it’s defined in the book: “In chokepoint capitalism, the aim is to create enduring barriers to competition that enable corporations to monopolize or monopsonize their markets.” In effect, with so much market concentration, the game is rigged.
We begin the episode by talking about the behemoth that is Amazon. It is the most striking example of chokepoint capitalism because of its impact on the book publishing industry and monopoly over e-books and audiobooks. Beyond that, Amazon has complete control over its third-party sellers, requiring them to be Prime-eligible in order to have greater positioning in search, and going as far as making their own version of popular products.
From the outside, copyright projection appears to be a win for artists. But studios use this to effectively hold artists hostage. Here’s how Doctorow puts it: “The record companies and publishers and studios and the streamers and digital services that retail their goods, they're all larger and more profitable than they've ever been. But the share of profits that goes to creators, who are meant to be the beneficiaries of copyright, that has declined pretty steeply over that same period.”
We frequently reference market concentration in this episode because it’s at the center of how artists, writers, and other creative people are being exploited by industries. The era of loosening anti-trust began with the ascension of policies that emerged from the Chicago School of Economics and came to be the defining characteristics of neoliberal economic policy for at least four decades.
This is a short one: Artists and creators are getting hammered.
Who We Interviewed & What They Said
Cory Doctorow is a journalist and prolific science fiction writer. He co-authored the book “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back.”
“The question is: How is it that we created this artists protection scheme—copyright—and that we made a bigger and bigger, and that the outputs that creators make have gotten more and more profitable, but the share of income to creators has gotten smaller and smaller over the years? And the answer is that when you have extreme market concentration in the creative industries, and the firms that control access to our audiences…giving creators more copyright is like giving a bullied kid extra lunch money. It doesn't matter how much lunch money that kid has, the bullies are going to take it. The fact that the bullies use some of that stolen lunch money to run big, high-profile campaigns, demanding more lunch money for schoolchildren, doesn't mean that if you give your kid more lunch money, that they'll eventually stop missing lunch. It just means that bullies are going to get more and more lunch. The idea that the intermediaries, whether they're tech or entertainment, that bring our works to market have the same interest as us is just wrong. We have some overlapping interests. But at the end of the day, they would like to allocate as much value as possible to their shareholders, which means allocating as little value as possible to us.”
Additional Resources
Here’s a brief explainer about “Chokepoint Capitalism”
Doctorow and Giblin cite this powerful passage from Astra Taylor’s book “The People’s Platform: Taking Back Power and Culture in the Digital Age”:
“It’s striking, when one pauses to think about it, how essential art and culture remain to the digital economy even as most of the money floating around goes to multibillion-dollar businesses that don’t invest much in either. Art and culture are the stuff that ads are sold around, the bait that causes users to divulge their preferences by clicking so their data can be mined. Billions in profits flow to companies like Google, Amazon, and Apple every year off the backs of creative workers. We can’t understand their dominance without understanding how they came to achieve it.”
It’s important to note that Doctorow and Giblin only use about half of the book to explain how we arrived at this critical point. The second half is dedicated to how we fix it. So, one more time, here’s the book: “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back.”
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Audio Editor/Sound Designer/Producer/Host: Manny Faces
Editor-In-Chief/Producer: Christopher Twarowski
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