The End of Power
Page 29
That said, the lines are not completely rigid, and the traditional players are capable of adapting—or at least trying to adapt. The Rockefeller Foundation, for example, is one of the original investors in the venture-philanthropy Acumen Fund. Desai and Kharas note that many major official agencies are splitting into specialized units in order to improve focus and reduce waste. Steps like these only confirm that the future of philanthropy is going to be more fragmented than in the past. Would Rockefeller, Carnegie, and their cohorts object? Not necessarily. “Rockefeller viewed his philanthropy through the lens of his business,” Acumen Fund founder Jacqueline Novogratz told Forbes. “It was highly centralized, it was top-down, it was based on experts and it was big picture.” Today a new class of entrepreneurs, finance and technology workers who forged their wealth in the networked economy, are simply applying their own business worldview to philanthropy, as Novogratz put it, “from the bottom-up of the market.”36 Andrew Carnegie favored “scientific philanthropy.” It is logical enough that as the “science” of business has pointed away from large centralized corporations to the advantage of small, fast, and networked new players, philanthropy would follow in the same way.
MEDIA: EVERYONE REPORTS, EVERYONE DECIDES
Around the world and especially in the most Internet-intense markets, the sources and repositories of the news were—and are—in a constant state of flux. The rapid and relentless digitization of information and communication has led to cohabitation on the same platforms by different types of content (news, analysis, opinion, commercial, propaganda), emanating from different kinds of providers (news organizations, advertisers, advocates, individuals). Once-separate media with their own technological requirements and business cultures are converging: radio and newspapers now operate as much online as in their original format, and derive more and more of their revenue that way.
News consumers have watched their favorite newspaper attempt to preserve advertising and develop new revenue streams, find the right design and figure out the balance between free and paid Web content, staff bureaus in other cities and countries, allocate personnel between print and online operations, and so forth. Many have failed. In the United States, for example, an average of fifteen papers, or just about 1 percent of the industry, vanished each year from 2006 to 2011. In terms of circulation and advertising revenues, the US newspaper industry has shrunk 43 percent since 2000.37 Television viewers have seen their favorite shows made available on-demand and online through partnerships with preferred video companies. Radio listeners can now choose to get their music from satellite stations, or through new tailored services such as Spotify and Pandora. News addicts can seek out coverage from one or another source, letting Google or Yahoo filter it through their news aggregators, or perhaps letting their Facebook and Twitter contacts do the sorting, relying on whatever links those people see fit to share.
The implications of these developments, while much debated, are less clear. Journalists understandably spend considerable time fretting over the future of their profession; but where is power in the media, and in what direction is it shifting? The answer depends a great deal—perhaps more than in any other field—on where one looks for clues.
On the one hand, evidence abounds to support the argument that a small number of major firms control a very large share of global media. One count of dominant firms in the US media market placed their number at 50 in 1983, decreasing to 23 in 1990, six in 2000, and five thereafter.38 Certainly media mergers accelerated in the United States after 1990, and regulatory changes lifting bans on certain kinds of cross-platform media holdings helped spur this along. More recently, the purchase of the Dow Jones company, owners of the Wall Street Journal, by Rupert Murdoch’s News Corp added to the heft of one of the seven top-tier international multi-media corporations identified by the Spanish sociologist and renowned media scholar Manuel Castells: Time Warner, Disney, News Corp, Bertelsmann, NBC, CBS, and Viacom.39
Whatever its effects on democracy, acquisition and consolidation in the media industry have yielded what might charitably be called mixed results as a business strategy. When Time Warner spun off AOL about a decade after its infamous merger, AOL’s value was a fraction of the price reflected in the original $175 billion merger. And that result is not an exception: according to one analysis, from 2000 to 2009, the largest media conglomerates together wrote down more than $200 billion in assets. And these companies’ poor stock performance relative to indexes such as the S&P predates the business destruction precipitated by the Internet. Media companies have a history of predominantly achieving growth through acquisition, but revenue growth has not necessarily translated into better stock performance and a certain kind of market power.40
On the other hand, power in the media business these days is increasingly wielded by technology firms and content-deliverers of one type or another. Castells, for example, adds to the top-tier list Google, Microsoft, Yahoo!, and Apple—all of them technology firms that have made significant moves into media of one kind or another—to form a snapshot of the “global core” of media operations today. Facebook should surely also be on it, especially after its 2012 initial public offering worth more than $100 billion. Indeed, by 2015, Facebook is expected to account for one out of every five digital display ads sold.41 Even in 2011, five technology companies (not including Apple and Amazon) accounted for 68 percent of all online ad revenue. The relations that exist between these giants are not solely cutthroat and competitive, in that they also involve case-by-case collaboration through local joint ventures in various countries and regions, content or platform development, distribution and advertising deals, and sometimes membership on one another’s boards of directors.42
But does this mean power is concentrated—or more concentrated than before—in the media industry? First, the comparison is hard to establish since changing technology keeps shifting the boundaries of the media industry. Second, even if merger activity seems to have bred consolidation in some countries and formed some major international media empires, the choice of media in any given country is more abundant today than it was a few decades ago. Until the 1970s or 1980s, the state controlled most or all television and radio not only in developing countries and the Eastern bloc but also in much of Western Europe. Third, the consumer experience via the Internet has expanded the range of choices. The New York Times, for example, offers local news coverage for Chicago; the Guardian, based in London, has become a popular news site in the United States; the National, published in Abu Dhabi, features highbrow culture coverage that draws its writers—and its audience—from well outside its local market. As the journalist Michael Kinsley observed in 2010, “Every English-language paper published anywhere in the world is now in competition with every other.”43 Finally, any argument that the media is more concentrated now than in the past should not forget that the American Big Three TV networks, the Associated Press news agency, and numerous other players long held dominant positions in their respective segments, and that is no longer the case.
But the nature of the media, with their appeal to our curiosity and belief systems, is such that their power lies as much in authority (of its writers and sources) and influence (on our views and decisions) as it does in business organization and company revenues. The newspaper considered “of record” in its national market—the New York Times, Le Monde, El País—is rarely the one with the largest circulation or revenue. Tabloids usually enjoy the largest readership. A subtle hierarchy places certain media outlets ahead of others with respect to credibility and prestige. Now, not only is that hierarchy under threat but the boundaries of journalism as a profession have fallen, as one after another upstart venture has shown itself able to compete with, if not surpass, established journalistic outlets. The Huffington Post, for example, which used to be derided by mainstream media as a rip-off aggregator, has beefed up its reporting staff and won the Pulitzer Prize for national reporting in 2012. Widespread digital and cellphone cameras and video record
ers have catapulted “citizen journalism” to the forefront, with ordinary people competing with paparazzi for celebrity shots (which online brokers then market to the tabloids) or supplying raw evidence of police brutality or early images of a natural disaster. (It should be noted, however, that David Wood, the Pulitzer Prize–winner at The Huffington Post, has decades of reporting experience.) Meanwhile, the ease of publishing on the Internet has turned blogs on everything from electoral politics to fiscal policy, rock music, and business travel into credible and revenue-earning specialty sources that often outperform beat reporters and magazine analysts.
Consider the case of statistics geek Nate Silver, who applied the skills he honed crunching baseball numbers to the 2008 and 2012 US presidential campaigns on his site fivethirtyeight.com. Using his own model to aggregate polling data, Silver was able to predict the outcome of the Super Tuesday primaries between Barack Obama and Hillary Clinton; he went on to predict Obama’s defeat of John McCain as early as March 2008, and his detailed predictions on Election Night got forty-nine out of fifty states right, and in the 2012 elections also predicted accurately the results. In the past, someone like Silver might have had a hard time being heard, for lack of an outlet. Instead, fivethirtyeight.com rose to cult status during the campaign, compelling TV channels to invite Silver onto some of their panels, and was licensed by the New York Times in 2010.
As different platforms converge, blogger-turned-analyst is just one of many mutations that have unsettled the traditional media work hierarchies. In addition to hiring more reporters, The Huffington Post in 2011 opened its own twenty-four-hour online news channel and announced in June 2012 that it would start a separate online magazine available only through the Apple Store.44 It has expanded internationally, launching operations in Spain, Italy, and France.
Meanwhile, newspapers and magazines have launched blogs and brought on board big-name independent bloggers. In Britain, for example, the major newspapers (Guardian, The Times, Daily Telegraph) have formed stables of dozens of online opinion and argument writers. Few traits or functions are exclusive to one type of media organization. News, opinion, and entertainment are all fair game; print, audio, and video outlets are increasingly working in one another’s medium; and the combination of easy access to both content creation and distribution tools has torn down the barriers surrounding both the profession of journalism and the scope and specialization of any news organization.
So, less power for traditional news outlets even as the media industry grows more commercial and entertainment-driven? Not necessarily. In 2012, for example, the Nieman Journalism Lab profiled three European newspaper companies that are successfully pursuing different strategies to thrive in the digital age: Sanoma, Finland’s largest news company, has pioneered new ways to profitably convert its print subscribers to digital access; Norway’s Schibsted, the world’s eighth-biggest news company, operates in twenty-eight countries and gets more than a third of its revenues from digital offerings, or about three times as much as the average newspaper; Switzerland’s Zeitung Online is experimenting with “hyperlocalism,” winning readers by ignoring stories about President Obama and world affairs in favor of those about the town mayor and canton politics.
The rise of small, outsider, and citizen journalism and social networking in the media may prove complementary to some of the existing players. Among the new forces are also independent investigative groups with nonprofit funding such as ProPublica, an “independent, nonprofit newsroom” (to use its own descriptor) whose partnerships with established newspapers in the United States have already begun to win awards (in ProPublica’s case, a 2011 Pulitzer Prize). And one example of clever harnessing of social media by a major newspaper came in October 2009, when the Guardian got around a court injunction that prevented it from reporting a question raised in the House of Commons with the assistance of a timely tweet by its editor, Alan Rusbridger. The case concerned the oil trading firm Trafigura, which was implicated in a toxic-waste scandal in West Africa and whose lawyers had secured the injunction. “Guardian prevented from reporting parliament for unreportable reasons,” Rusbridger posted, sparking an overnight flurry of online chatter that blew open the topic. In an industry experiencing as thorough a state of flux and technological revolution as the media are, the rise and relevance of all manner of small, decentralized participants are undeniable, but the traditional players may yet have the last word.45 The growing popularity of mobile devices, for example, has led not only to a spike in news consumption but also to a flight to quality, as consumers prefer apps and home pages of established news organizations with a reputation for objectivity.46
This chapter has focused on churches, unions, philanthropies, and the media. But it could just as well have been devoted to the power shifts in the academy, where online learning, for-profit schools, and growing global competition are intensifying the struggle to attract students and research funding and to stay on top of the pecking order for prestige. It could have explored the decay of power in scientific innovation, which has become more a global than a national enterprise, with collaborators across borders and emerging norms for greater sharing of data and knowledge. Or it could have zeroed in on museums, which have had to contend not only with new competitors—the establishment of world-league museums in far-flung places like Tasmania and Qatar, for example—and groundbreaking methods of cultural interaction but also with the increasing assertiveness of empowered developing countries seeking to retrieve their cultural patrimony. Or it could have highlighted sports, old franchises given new life by innovative methods and nouveau riche owners, or new national juggernauts seeking to translate their surging gross domestic products into a greater haul of Olympic gold or thriving entertainment industries.
No realm has been left untouched by the More, Mobility, and Mentality revolutions. And none is immune to the shifts that have made power easier to get, harder to use, and more difficult to hold on to. In religion, philanthropies, and media—the arenas of conflict and competition for our souls, hearts, and brains—we see not only the interplay of new forces but also the fragmentation and polarization that are remaking our societies at all levels. We have more choices open to us in these areas than ever before.
But this raises the question of what happens when the mosaic of faith shatters into a thousand, a million jagged pieces. When the quest for common good devolves into bespoke kindness designed to advance a particular cause for a particular person. Or when citizens forsake all the news that’s fit to print for only the news they want to hear. All of these amount to a challenge to efforts at collective action. And from climate change to rising inequality, the enormous challenges that we face demand collective action and a new shared way of thinking about the accretion and use of power. We will consider both shortly—after we examine, in the next chapter, whether this brave new world is really here to stay after all, and whether the decay of power has more benefits or more costs for society.
CHAPTER TEN
THE DECAY OF POWER
Is the Glass Half-Full or Half-Empty?
I AM AWARE THAT I AM ARGUING THAT POWER IS DECAYING EVEN AS headlines regularly point to the contrary. Some governments are becoming larger. Within countries, wealth and income are indeed becoming more concentrated. The middle class in rich countries is shrinking, and a tiny set of people is accumulating unimaginable riches. Groups and individuals with huge wealth use it to gain inordinate political influence. In the United States, a billionaire casino owner, hedge fund managers, and real estate tycoons blatantly use their money to fund “Super-PACs” that advance narrow agendas or promote candidates who will defend their business interests. In Russia, China, and many other places, oligarchs in cahoots with government officials call the shots—figuratively and literally. Powerful media moguls use their influence to extend their media power to presidential palaces. The “99 percent” feel swindled, impoverished, and exploited by the rich and powerful 1 percent.
How, then, can it be true
that power is decaying, spreading, and becoming more ephemeral? Or that the powerful are under siege? Because, as these pages have shown, the powerful today are more constrained than in the past, their hold on power is far less secure than that of their predecessors, and their tenures are shorter.
Vladimir Putin, for example, surely has enormous power, but he is increasingly embattled and his range of options has narrowed since his first term as Russia’s president and, subsequently, as prime minister. Similarly, it appeared that the few bankers who came out on top after the 2008 financial crisis would rule the global financial system for a long time; yet, less than four years later, several of them had lost their jobs while others were besieged by the discovery of their price rigging (Barclays), hidden trading losses (JPMorganChase), money laundering (HSBC), illicit dealings with Iran (Standard Chartered), insider trading by one of their board members (Goldman Sachs), and so on. These events did not extinguish the economic might of the large banks, and the banking lobby continues to wield enormous political clout. But some top executives have lost power, and the banks are surely more constrained in what they can do. Only the most naïve or blindly arrogant CEOs—and not just bankers—feel that their jobs are safe. Economic inequality—long tolerated and in some countries even celebrated—is becoming the focus of debate in many countries. From the United States and Europe to the streets of the Arab world or even China, the peaceful—or at least silent—coexistence with inequality is ending.