NEW GEOGRAPHY--The rising tech oligarchy, having disrupted everything from hotels and taxis to banking, music and travel, is also taking over the content side of the media business. In the process, we might see the future decline of traditional media, including both news and entertainment, and a huge shift in media power away from both Hollywood and New York and toward the Bay Area and Seattle.
This shift is driven by several forces: the power of Internet-based communications, the massive amounts of money that have accumulated among the oligarchs and, perhaps most important, their growing interest in steering American politics in their preferred direction. In some cases, this is being accomplished by direct acquisition of existing media platforms, alliances with traditional firms and the subsidization of favored news outlets. But the real power of the emerging tech oligarchy lies in its control of the Internet itself, which is rapidly gaining preeminence in the flow of information.
This transition is being driven by the enormous concentration of wealth in a few hands, based mostly in metropolitan Seattle and Silicon Valley. In 2014, the media-tech sector accounted for five of the 10 wealthiest Americans. More important still, virtually all self-made billionaires under age 40 are techies. They are in a unique position to dominate discourse in America for decades to come.
In recent years, like Skynet in the “Terminator” series, the oligarchs have become increasingly aware of their latent power to shape both the news media and the political future. A prospectus for a lobbying group headed up by Mark Zuckerberg’s former Harvard roommate, suggests tech will become “one of the most powerful political forces.” The new group’s “tactical assets” include not only popularity and great wealth but the fact that “we control massive distribution channels, both as companies and individuals.”
In the past, more hardware-oriented companies provided the “pipelines” through which traditional media disseminated their products. But increasingly these industries are being subsumed by the oligarchs. On the hardware side, they seek to supplant the traditional telecommunications companies with their own series of global digital pipelines; at the same time they are looking to gain control over large parts of the entertainment, news and other media providers.
The transformation of media to online platforms has already precipitated an enormous shift from traditional advertising – largely seen on television, in movies and print media – to Silicon Valley-based companies. By 2013, Google’s ad revenue surpassed that of either newspapers or magazines.
This shift also previews a migration of geographic power from centers such as New York and Los Angeles and to the hubs of tech influence, most notably Silicon Valley-San Francisco and the Puget Sound area. Even as the new software-based media expanded over the past decade, traditional media such as newspapers, music, book and magazine publishing – all concentrated in the New York area – have atrophied. According to an analysis of Bureau of Labor Statistics data by Mark Schill of Praxis Strategy Group, periodical and newspaper publishing have lost some 250,000 jobs. Over the same time, Internet publishing and portals generated some 70,000 new positions, many of them in the Bay Area or Seattle.
To the new oligarchs, traditional media are holdovers from what one venture capitalist derisively called “the paper economy” that is destined to be swept away by the new digital aristocracy. As relatively young people – even Bill Gates is barely 60 – they will have the money, and the time, to disseminate their views both to the masses and the influential higher echelons.
One way to consolidate such influence – as happened with Gilded Age moguls like William Randolph Hearst – has been to buy up the former bastions of old media. Chris Hughes, a Facebook billionaire and Obama tech guru, has bought the venerable New Republic. Perhaps more importantly, the purchase of the Washington Post by Amazon’s Jeff Bezos, now the country’s fourth-richest person, has placed the tech oligarchy at the center of media in the nation’s capital.
Yet, over time, acquiring existing media may prove just a sideshow. Far more critical will be the growth of their own oligarch-controlled news media. Yahoo is the No. 1 news site in the U.S., with 110 million monthly viewers. Google News isn’t far behind, at No. 4, with 65 million users. Facebook, according to Pew, has emerged as the second-largest source of political news, after local television.
Content providers
The oligarchs are also moving into the culture business, with Amazon, YouTube (owned by Google) and Netflix becoming increasingly influential in Hollywood. And then, there’s Apple TV. The oligarchs may need to source from more established vendors on the East Coast or Hollywood, but they increasingly will control the financial purse strings as well as the critical distribution pipelines.
The intrusion of tech firms into media is likely to become even more pervasive as the millennial generation grows, and the older cohorts die off. Among those over age 50, only 15 percent, according to a Pew report, get their news over the Internet; among those under 30, 65 percent are consumers of online news.
Over time, this trend could help propel the media, already liberal, further toward a lock-step embrace of progressive positions. Once largely apolitical or nonpartisan, firms like Microsoft, Apple and Google now overwhelmingly lean to the Democrats. President Obama has even enlisted several tech titans, including venture capitalist John Doerr, LinkedIn billionaire Reid Hoffman and Sun Microsystems co-founder Vinod Khosla, to help plan his doubtlessly lavish and highly political retirement.
The politics of the oligarchs need to be better understood as they exert more control over our media. An analysis by researcher Gregory Ferenstein found that most Internet company founders are liberal Democrats, favoring increased immigration, with its promise of cheap, more pliable labor for their own operations. Unlike old-style Democrats, they are strongly hostile to unions, dismiss issues of class and believe that most issues can be addressed by digital technology and education. Hey, it worked for them!
This belief system, which Alphabet (Google) chairman Eric Schmidt said is a “kind of religion in and of itself,” assumes technology can address virtually all social problems. They see this happening largely by pushing media in the direction of their own version of progressivism. EBay co-founder Pierre Omidyar has pledged large sums to support a largely left-of-center investigative reporting site, First Look Media. Both Vox Media and Buzzfeed, emerging digital news brands, have received major investment from Silicon Valley firms.
News with a view
Similarly, people associated with major tech firms, notably Google, and major venture capitalists, including such climate-change-oriented titans as John Doerr and Russ Hall, have invested in CALmatters, a journalism nonprofit that provides news to content-starved California media with a distinctly green, progressive spin. Recent coverage of Democrats who dissented from Gov. Jerry Brown’s climate change agenda basically portrayed them more or less as oil company stooges. There seems to be less interest in explaining how these lawmakers’ working-class constituents might have problems with ever higher energy prices that cut deeply into their generally modest finances.
Ultimately, tech’s media dominance has the potential to prove more pervasive than any in the past. Many of the leading social networking sites – Facebook, Twitter and Snapchat– have launched initiatives to expand their news operations.
These and other tech applications could give the oligarchs a reach beyond that which the likes of Joseph Pulitzer, Horace Greeley or even Rupert Murdoch could imagine. With media consumers constantly on their phones, looking at their smart watches or logging onto their tablets, the flow of media messaging could become ubiquitous to a degree imagined before only in dystopian science fiction, or in how North Korea attempts to convince its impoverished, often-malnourished citizens through incessant propaganda that they live in an evolving socialist fairyland.
Reflecting a tech world that is ever more dominated by a few players, we may be on the verge of seeing news, culture and analysis concentrated in ever fewer hands. This could allow the oligarchs to become a media power of unprecedented dominance, a ubiquitous Big Brother looming from cyberspace.
(Joel Kotkin is executive editor of NewGeography.com, the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His most recent book is “The New Class Conflict” --Telos Publishing: 2014. Joel Kotkin lives in Orange County. This piece first appeared at NewGeography.com.)
-cw
CityWatch
Vol 13 Issue 96
Pub: Nov 26, 2015
