Stratechery, Ben Thompson
LESSONS FROM SPOTIFY
Posted on Monday, March 5, 2018
It’s funny that this article popped up because I’ve been considering Spotify as opposed to paying for streaming from both Pandora and YouTube. This consideration emanated from a discussion in class as how people use Spotify. About half of the subscribers in class said that they signed up merely out of convenience: they wanted to get music before heading out on a flight and just continued subscribing afterwards. There was no mention of Spotify’s ads or superior service. Instead the company was the best option (or most well-known) in comparison to other streaming services like Apple Music and Google Play.
The conflicting problem for Spotify, according to Thompson, is that they need to dedicate more resources to earning more users, but cannot afford to because their marginal cost of revenue, i.e. the royalties that they pay record companies, already has the service operating at a negative earnings before interest and taxes (EBIT).
“Spotify is an impressive product and company, and CEO Daniel Ek and team deserve credit for reaching this point. Being a true aggregator, though, means gaining power over supply; Spotify doesn’t have that — the company doesn’t even have control over its marginal costs — and it’s hard to see where the profits come from,” Thompson says.
Thompson asserts that Spotify could try to cut out the middleman and become an aggregator of songs. The problem is users are now willing to pay streaming services, as opposed to buying songs one by one, in order to get access to an artist’s entire catalog. This repositions music labels in their pre-internet powerful stance: as owners and distributors of music. In other words, Spotify is almost forced to keep paying royalties to gain access to the breadth of music users want.
The end of the article is both surprising and expected. Thompson believes that because Spotify is so large and still growing, that continued investment and profitability are an inevitability. This is an interesting and risky proposition. What happens if record labels collaborate to create their own streaming service? What happens if the low royalty costs that Spotify enjoys suddenly rise?
Thompson is probably correct is his assumption, but Spotify need to remain creative and nimble because the calamitous death of big players is not an unheard of notion in this era of unmitigated access to information.
The Atlantic, Derek Thompson
Why Are Corporations Finally Turning Against the NRA? 2/26/18
This is a fascinating look into one, the current impotency of our federal and two, as a consequence, public interest groups turning to large corporations for action and advocacy.
As an example, Thompson examines our country’s most recent mass shooting and our useless, blind, deaf, negligent, self-serving, sociopathic smiling bastards from Janeseville who do nothing about it. Instead, corporations are getting in line to cut ties with the NRA. This is, of course, the nature of corporate culture; once one group does, the rest have to follow suit for public perception, but at least something gets done.
Thompson hearkens to a oft-repeated trope in this age: corporations are being forced to choose a side because of the pervasive nature of social media. Not saying something in response to public outcry is tantamount to backing the offending party.
This is not to say that I am happy about this situation. Our current climate of self-serving, spineless windbags with no vision in our federal government has left our country bereft of all but any hope or help from Washington D.C. Barack Obama was far from perfect but at least he believed in something and stood by that belief while the rest of the rest of the rats scurried around him, scooping up the carnival scraps left to them by the one percent.
I also appreciate Thompson more each time that I read his work. He makes an eloquent point.
“American democracy is not a free market. It is, at best, a two-party duopoly, in which vilification of the opposition often passes for a party platform. As a result, many liberal activists are asking corporations to express the values that they cannot impress upon a Republican-dominated government. Corporations are no longer bystanders in the culture wars. They are on the front lines.”
But, if we are at the point that activism has to have the backing of corporate interests serving the whims of shareholders, we might as well signal the organist to begin tapping out the memorial for this American experiment.
Public Interest Environmental Law Conference, Panel 1:
Protecting Environmental Laws in the Trump Era
(Attended instead of Jeff Oliver, Senior Director of Eugene Family YMCA Operations)
(Below is my blog article for Eugene Weekly reporting on this presentation. You’re welcome to read it, but it’s not a requirement. I just wanted to show some output from being absent from class.)
The spectre of men hellbent on destruction in the name of profit hangs over the Public Interest Environmental Law Conference (PIELC) like a pall. The death of federal environmental protections is another casualty of responsible governance replaced by blatant catering to corporate interests.
Following the requisite catalogue of the executive branch’s “war on the environment,” though, there was a measure of promise. Despite the administration’s attempts to scale back environmental regulation, protecting our planet remains a legitimate opportunity because of environmental attorneys and local activism.
Scott Pruitt, head of the EPA, has attempted withdrawing from over 70 environmental protections.
This includes limiting formaldehyde burning, protecting drinking water and testing children for chemical exposure. Unfortunately for Pruitt, courts are constraining this zeal for territorial plunder.
“The Obama administration has a very thorough and comprehensive record on pushing environmental protections,” panelist Denise Grab, Western regional director at the Institute for Policy Integrity, says. “(The EPA) must give good reason for undoing these rules and they haven’t been doing that.”
“Even the Legislature, which got off to a blazing start, was only able to pass 15 of 50 repeal proposals through both chambers of Congress,” Jamie Consuegra, legislative director for the Climate and Clean Air Program, says.
There are major legislative battles ahead, though. Both the infrastructure bill and regulatory reform will include a number of riders undermining environmental protections. Various tactics defend against these riders, including activism in traditionally red states.
“Even people in more conservative areas standing up for change,” Consuegra says. “In Kansas City, 125 people showed up to demand keeping open a clean power plant. Only five people showed up to remove it.”
For activists, Freedom of information (FOIA) requests can expose choosing corporate interests over protecting public safety. The World Health Organization, for example, found that this pesticide can cause neurological damage.
“FOIA revealed that the day before trying to change the chlorpyrifos regulation, Pruitt met with Dow Chemical,” Colangelo says.
It’s one thing to expose large scale corruption, but it’s personal narratives that energize change.
“All political movements start at the local level. Our Children’s Trust with climate change here in the Northwest and the students at Stoneman Douglas High School are gaining steam and becoming larger movements,” Grab says. “If you’re not happy, let your local government know. They’re paying attention.”
This executive branch’s assault on environmental reform has motivated people to stand up, but the strange thing is, this administration has only been in office for a year.
“It’s going to be tough, but we need to keep this action up and fight activism fatigue over the next three years,” Consuegra says.
These committed environmental attorneys, along with an invigorated electorate can stifle an executive branch insulating a corporate aristocracy. And local movements can embolden environmental legislation to cultivate a prosperous, sustainable future.