Sunday, April 05, 2009

Google Is A... Big Fat Meanie?

Yes, it's another one of the expositions on how horrible, or at least how amoral Google is for providing its free YouTube platform. After commenting on how Scribd, a service unrelated to Google, facilitates copyright violation and even allows people to "advertise services for delivering pirated books by email",
Google presents a far greater threat to the livelihood of individuals and the future of commercial institutions important to the community. One case emerged last week when a letter from Billy Bragg, Robin Gibb and other songwriters was published in the Times explaining that Google was playing very rough with those who appeared on its subsidiary, YouTube. When the Performing Rights Society demanded more money for music videos streamed from the website, Google reacted by refusing to pay the requested 0.22p per play and took down the videos of the artists concerned.
So, basically, the artists asserted their copyrights - "You can't run our songs unless you pay us the money we're demanding," and Google said, "Well, I guess that means we won't be running your songs." And that represents amoral behavior? How so?
It does this with impunity because it is dominant worldwide and knows the songwriters have nowhere else to go. Google is the portal to a massive audience: you comply with its terms or feel the weight of its boot on your windpipe.
There are lots of other ways to get your music online, ranging from the proprietary to other free video hosting services. I'll grant, YouTube has the best known brand - that's why Google was willing to pay an astronomical amount of money to acquire YouTube. But it's far from the only game in town. So what we're back to is the question of, how much is all that free YouTube publicity worth? The author falls into a predictable pattern:
Despite its diversification, Google is in the final analysis a parasite that creates nothing, merely offering little aggregation, lists and the ordering of information generated by people who have invested their capital, skill and time. On the back of the labour of others it makes vast advertising revenues - in the final quarter of last year its revenues were $5.7bn, and it currently sits on a cash pile of $8.6bn.
Imagine a library, with a billion books, all bound in identical white covers, arranged randomly on the bookshelves. There's a man sitting at the help desk. You say, "I need a book on the anatomy of honeybees." He immediately produces a list of ten books that meet your need, or come pretty close, and says, "Need another ten?" No charge! but you then notice that there's a display next to him, presenting advertisements for a few brands of gourmet honey, and honey-based face cream. Indignant, you declare him a "parasite"? I hardly dare ask the author how he feels about cartographers.1

As with the musicians who didn't feel that Google was giving them enough return on their music, any website can demand exclusion from Google's search results. It's easy to do. And if you don't find enough value as a user, you can use a competing search engine. The author complains that newspapers have not adapted well to the emerging electronic world, and trots out Jefferson on the importance of newspapers to democracy, but what's happening is much more complicated.

We have a democratization of speech that Jefferson could not have imagined, and there's no reason to believe he would have found it unsatisfactory to have the news available to him more or less "as it happens" through a computer screen as opposed to a daily delivery, printed on paper. The author complains that the newspaper business has "to give its content free to the search engine in order to survive" - that's true to a degree, but only because Google delivers traffic to the newspaper's websites. Other than AP, which is hosted on Google because it wants to be, Google doesn't make the full text of newspaper articles available. It offers the headline and a snippet, and you have to click the link to read the rest.

The scary part about the declining newspaper industry is not that billionaires like Rupert Murdoch see their fortunes decline, and angrily spew about how Google is stealing, no make that taking, news articles for free. It's a bit like getting angry that people can read headlines and the lede to top stories through the window of a newspaper box. Or the fact that those boxes even exist. If your business is going electronic, you have to develop sources for your traffic - and right now, that means working with Google and Yahoo.

Finding ways to make money from that traffic - particularly in the amounts necessary to float a traditional (quality) newspaper's reporting and editing staff? Yes, that's difficult. That should concern everybody, but it's a development that's anything but Google's fault. (Rather than complaining, perhaps newspapers should take a look at what Josh Marshall has managed to put together in terms of a purely online, professional news service, and wonder what they could have done given that they have, oh, a billion times his resources.)

Here's something for the author to ponder. YouTube, the wonder site that musicians just can't live without, is not the source of Google's wealth and success. Quite the opposite:
A new report by Credit Suisse projects that video-sharing giant YouTube is on track to lose $470 million this year, writes Multichannel News.

Credit Suisse says YouTube will generate $240 million in revenue, but those revenues will be dwarfed by the $711 million in licensing, hardware, marketing and other expenses the site will incur.
You know what eventually happens to ideas that lose $500,000,000 or so per year? No matter how big the company subsidizing them? They get cut. You are free to argue that Google "can afford" to lose that much money, or even more, but if you truly believe that YouTube is crucial to success in the world of music, perhaps it's time to stop complaining and start coming up with ideas to monetize YouTube traffic.2

1. The author raises some issues about Google's privacy policies, information retention, and other similar issues that are worth thought and discussion, but makes them little more than a footnote.

2. I suspect that I'm asking too much. I would guess that, should YouTube fail, we'll be hearing yet another version of the same complaint from the same author. Newspapers cut their unprofitable print publications and go online, where they depend upon Google to provide them with free traffic? "Google takes without paying! Google bad!" Google pays artists a licensing fee for their music on YouTube? "Google is profitable, so it could pay more! Google Bad!" Google closes its unprofitable YouTube site? "That's invaluable to musicians! Google bad!"

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