Billy Gurley and Fred Wilson, who backed Uber and Twitter, say Silicon Valley investing in too many losing ventures
Two of the world’s leading tech investors have warned the new wave of tech companies and their backers are taking on risk and burning through cash at rates unseen since 1999 when the “dotcom bubble” burst.
Bill Gurley, partner at Silicon Valley-based investor Benchmark, sounded the horn of doom on Monday warning that “Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now.”
In an interview with the Wall Street Journal Gurley, whose investments include OpenTable, Uber and Zillow, said startups were taking on risks in a way “unprecedented since 99”.
Gurley said that “more humans in Silicon Valley are working for money-losing companies than have been in 15 years”, and they’re burning through huge piles of cash.
“In 01 or 09, you just wouldn’t go take a job at a company that’s burning $4m a month. Today everyone does it without thinking,” he said.
His comments were backed up Tuesday by Fred Wilson, the New York-based co-founder of Union Square Ventures who has backed companies including Twitter, Tumblr and Zynga.
Burn rates – the amount of money a startup is spending – are “sky high all over the US startup sector right now”, he wrote in a blog post.
“We have multiple portfolio companies burning multiple millions of dollars a month. Thankfully its not our entire portfolio. But it is more than I’d like and more than I’m personally comfortable with,” he wrote.
“I’ve been grumpy for months, possibly for longer than that, about this. I’ve pushed back on long term leases that I thought were outrageous, I’ve pushed back on spending plans that I thought were too aggressive and too risky, I’ve made myself a pain in the ass to more than a few CEOs.”’
The comments come after a new generation of tech companies have attracted record levels of investments at levels that give the profitless businesses eye-watering valuations.
In August Snapchat, the social messaging service, was valued at $10bn after a new round of funding. The free service’s fans send 500m self-deleting messages a day, but Snapchat has yet to declare how it intends to make money. Among the other big tech valuations in recent months are Uber, the taxi app service, which was valued at $18bn after its last round of funding in June, and Airbnb, the short term rentals service, which was valued at $10bn in April.
But the valuations are not the immediate issue, according to the sceptical tech investors. “Valuations can be fixed. You can do a down round (investing at a lower valuation), or three or four flat ones, until you get the price right,” writes Wilson. “But burn rates are exactly that. Burning cash. Losing money. Emphasis on the losing.”
Asked if investors, and the people working for the companies, were distracted by the potential for reward, Gurley said: “Yeah, it’s a whole bunch of things. But you just slowly forget, and half of the entrepreneurs today, or maybe more – 60% or 70% – weren’t around in ‘99, so they have no muscle memory whatsoever.”
The continuing revelations by Edward Snowden have convinced many of us that we are living in a modern surveillance state. And the problem isn’t just the activities of the National Security Agency and Great Britain’s GCHQ. “Trickle Down Surveillance” has provided spy technology to small town police officers and developing world dictators. In addition, our activities are monitored for commercial reasons by a wide variety of international corporations (Amazon isn’t the “Everything Store,” it’s the “Find Out Everything About You” store).
Anyone who steps back for a minute and observes our modern digital world might conclude that we have destroyed our privacy in exchange for convenience and false security. That private world within our thoughts has been monitored, tabulated and quantified. Our tastes, our opinions, our needs and our desires have been packaged and sold as commodities. Those in power have pushed their need for control one step too far. They turned unique individuals into data files, and our most intimate actions have become algorithmic probabilities.
The destruction of personal privacy is not an ideological issue. Thoughtful women and men on every point of the political spectrum are beginning to realize that surveillance technology has shifted the balance of power between institutions and individuals. Without private thoughts and actions we can never truly be free.
Ten years ago, I believed that individuals could live off the grid, but because of “trickle-down surveillance,” it’s becoming impossible to escape surveillance in a rural area or in a developing country. Most of the people reading this essay have jobs that involve computers. We have cellphones, and we use the Internet. Like it or not, we’re living in a digital infrastructure.
Although I write dystopian fiction, I don’t believe in dystopian fantasies. Unless some future hacker genius creates a virus that wipes every database clean, it’s clear that destroying one small part of this Virtual Panopticon is not going to bring the walls down.
So what are we supposed to do? How can we avoid becoming just another bar-coded object tracked within a World of Things?
A place of refuge
A good first step is to find or create an occasional place of refuge where you can escape the electronic grid that surrounds us. It’s a place without phones or computers — without monitoring of any kind. Stepping back from the grid is especially important if you have small children. They need to discover the possibilities created by their own imaginations.
I realize that switching off one’s Twitter feed is highly difficult for some people. But walking alone down a forest path, smelling the wet earth, and watching branches sway in the wind is actually the first step in your act of resistance.
You can’t truly hear your own voice until the shouting around you disappears. New ideas and possibilities — our own ideas, our own possibilities — will occur only when we step away from the Virtual Panopticon.
At various times of my life I have turned away from our high-tech society. When I was younger I simply camped or explored the wilderness on my own. During the last few years, I’ve experienced more extreme periods of isolation in Nepal and Tibet (in both of these countries, people are more accepting of these kinds of actions).
The last time I stepped off the grid, I took photographs of myself before and after the experience. On the first day, my face showed the conventional “mask” we all create to protect our private Self. Thirty-one days later, I had grown a beard, but that was an insignificant change. I was smiling. My eyes were wide open and ready to see the beauty of our world.
One consequence of living — even for a short time — in a place of refuge is that when you return to your daily routine, you’ll be more aware of the ways that the Panopticon is watching you and predicting your behavior. This awareness gives you the motivation to gradually create a parallel life.
My Public Self uses a credit card to buy an airline ticket, walks through an airport and boards a plane. This Self pays income taxes, uses a smartphone, and doesn’t hide his face from the CCTV cameras that have appeared throughout New York and London.
Then there is my Private Self that gives a fake phone number to an inquisitive clerk, doesn’t post a photograph on Facebook, and uses a search engine that won’t remember searches. I’ve used a gift card (paid for with cash) to purchase Apple apps and my identity is not on the Apple Corp.’s database.
Finally there is a Secret Self that owns a throwaway cellphone purchased with cash and uses Internet software like Tor that enables online anonymity.
In the beginning, these actions to defend your privacy feel like a game. But deliberately concealing yourself from the Panopticon makes you feel less passive and more aware. There’s nothing flashy going on here, just small daily actions that continually undercut the constant attempt by governments and corporations to know who you are and what you’re doing.
The Shark Cage
The Internet is not a cyber-utopia offering freedom to anyone with a blog. It’s part of the world economy (other than Wikipedia, the vast majority of the top 100 websites are owned by large corporations).
We exist in a marketplace where our personal information is collected and sold. But the marketplace can protect our privacy if we make conscious choices. Companies selling computers and phones design their product first, then add firewalls and security software later. The growing awareness of the attack on privacy has prompted a small group of cryptographers to design communications devices that assume that both the Internet and the cellular network have been compromised.
Recently, a company has introduced the Blackphone — an Android-based smartphone that provides easy-to-use encryption for phone calls and text messaging (the same company is developing “a private and secure” email system called Dark Mail). By the time you read this, there may be better-designed phones and more secure email systems. The real news is that the market is beginning to respond to the public’s growing realization of how the surveillance state destroys freedom. More pro-privacy computers and communications devices will be created, and they will gradually become less expensive and easier to use.
Wealthy people and celebrities routinely hire specialists to create an electronic “shark cage” that protects their phone and online privacy. But privacy is no longer a rich man’s luxury. In the last few years, small companies like the Boston-based Abine Corp. are selling software that can control the personal information that companies and other people can see about consumers online.
In democratic countries with a digital infrastructure, the market will eventually offer us cheap and easy-to-use ways to step away from certain aspects of the Panopticon. All you need is enough cash to buy a prepaid debit card — and the desire to live an unmonitored life.
I own two smartphones (one purchased with cash), an iPad, two regular computers, and a “clean” notebook computer that’s unattached to any identity. There’s nothing wrong with technology itself. A license plate scanner attached to a computer has no ideology. The real issue is control. Who gives instructions to these new machines, and what are they used for? Who makes the rules for our society and our lives?
One positive aspect of the new technology is that it gives us the means to create parallel systems that exist alongside the dominant social and economic system. Examples can be found everywhere: organic farming, home solar power, and the do-it-yourself movement (DIY), which encourages people to “life hack” common problems and use open-source designs to make machines.
Using a parallel system allows us to makes a distinction between the surveillance state and those transactions that are not instantly part of a database. When we buy a locally grown tomato at the farmer’s market, use a peer-to-peer payment system that involves cryptocurrency, or rent a room in someone’s apartment while traveling, we’re engaged in a transaction that will not be tracked or quantified.
Participating in these parallel systems and creating a parallel life are both choices. And most people living in democratic countries still have these choices. But what should we do if the new surveillance states extend their power into every aspect of our lives?
When do you decide that you have had enough?
For several years I worked for an organization that sent its employees out to work in war zones all over the world. On a number of occasions, I walked through villages where everyone had been killed and the bodies were left to swell up and rot in the sun. Time disappeared during these moments, and I was conscious only of the stench and the buzzing sound that came from swarms of flies. Eventually, my Sikh driver would honk the horn of the truck filled with relief supplies. I would get back into the truck cab and continue up the road. But these experiences stayed in my memory. I wanted to know why humans acted with such deliberate cruelty. When should we turn away from evil? And when should we resist?
When I returned to America, I began to read books about the Holocaust that described how ordinary people were transformed into executioners while a smaller group risked their lives trying to save others. There’s a long shelf of books about individual rescuers like Oskar Schindler, but it was difficult to come up with a general theory as to why they stepped forward.
A friend recommended that I read about Stanley Milgram’s famous “obedience studies” in the early 1960s. The Yale University psychologist was trying to understand how authority could push individuals into performing cruel or unethical actions, so he conducted a series of experiments on the Yale campus.
Imagine that you were one of the people who answered a newspaper ad looking for paid participants in a “scientific experiment.” When you arrive at the basement laboratory, a man wearing a white lab coat tells you that you’re going to participate in a study of how memory is influenced by punishment. You fill out a questionnaire, then pick a piece of paper that gives you the role of “teacher” while the other participant is “the learner” (actually an actor hired by Milgram). The learner is taken to another room and an electrode is strapped to his wrist. Then the experimenter asks you to give the learner a set of word pairings to memorize.
If the learner in the next room answers correctly over an intercom, you’re supposed to praise him. But if the learner gives the wrong answer, you’re told to press a switch that gives a shock to the other person. At first, the learner answers correctly, and then he begins to make mistakes. Each time that happens, you’re told to press a switch with a higher voltage indicated on the control panel. You’re ordered to keep going even when the learner begins to scream.
After 19 different experiments with more than a thousand participants, Milgram described the obedience study to a group of 40 psychiatrists and asked them to estimate what percentage of teachers would reach the 450-volt level marked with an ominous XXX on the control panel. The psychiatrists decided that only 1 percent of the test group would go all the way. They were astonished to learn that two out of three “ordinary” men and women gave the maximum shock even when the learner in the other room had stopped responding.
Humans can be manipulated to obey. As information and communications technology creates a surveillance state, I’m worried that fear of terrorism will create a system where police officers and soldiers will obey the computer-generated decisions that appear on their optical head-mounted displays.
So what can stop this from happening? In 2006, a professor at Santa Clara University named Jerry Burger duplicated Milgram’s experiment using an experimental procedure where the “teachers” were pushed only toward a maximum 150-volt level. When he interviewed the participants afterward, Burger discovered that those who had stopped participating felt that they were responsible for giving the shocks, while those participants who obeyed had decided that the experimenter was responsible.
Milgram’s research shows us that anyone who identifies with authority can be manipulated to defend institutional goals. This sort of mindless obedience can be defeated only by one’s sense of identity.
Identity is not taste or fashion; it has nothing to do with what we’ve purchased in the past or want to buy in the future. Identity comes from making real choices that force you to decide what is true, fair and just.
One Man Standing in the Middle of a Street
The key image of our era is not an astronaut on the moon or a smirking billionaire holding a new smartphone. I’m continually inspired by the 1989 video of a man standing in front of a column of tanks one day after the Chinese military massacred the pro-democracy protesters who had gathered in Beijing’s Tiananmen Square.
When the lead tank tries to drive around this protester, he repeatedly steps into its path. The driver of the lead tank shouts at him. The column starts to move, but the lone protester stops them once again. I don’t know this hero’s name and I don’t know what happened to him, but I’m still inspired by his bravery. The Tank Man was acting like a free human being — making a conscious choice to resist authority.
Even if you spent most of your day using some kind of electronic device, you’re not a light-emitting diode or a computer chip. We should never consider ourselves a functional component of any new technological system. We are physical beings that have been given the privilege and the power to say no.
When your own moment arrives, it probably won’t involve a column of tanks, but you’ll know that there is no other alternative. You must confront authority or your true Self would no longer exist.
The new surveillance states have placed us in an invisible prison. If we wish to break free, we need only to step forward and open the door.
John Twelve Hawks’ new book is “Against Authority: Freedom and the Rise of the Surveillance States.” Follow him on Twitter ar @john12hawks.
In late July, Christian Rudder, a co-founder of the online dating site OkCupid, plunged himself into the middle of an Internet maelstrom when he published a post with a classic poke-the-anthill headline: “We Experiment on Human Beings!”
The provocation came in the middle of a storm of commentary sparked by the revelations that Facebook had been purposefully manipulating its users’ emotions by tinkering with its news feed. Rudder contended that such tweaking was commonplace and normal. In OkCupid’s case, the company had temporarily adjusted its matching algorithm so that some people ended up with recommendations that the algorithm would normally have considered bad matches — and vice versa, some people whom the algorithm should have concluded were good matches were told they were a bad fit. There was no ill will involved; from Rudder’s perspective, it was just an experiment designed to serve the larger goal of improving the overall OkCupid user experience.
The Internet reacted harshly. But in an unplanned twist, the post turned out to be good publicity for Rudder’s new book, “Dataclysm: Who We Are When We Think No One’s Looking.” Case in point: I had an advance review copy of the book sitting on my desk, but it was only after the hoopla over Rudder’s blog post that I took a closer look and decided it was a must-read.
And indeed it is. “Dataclysm” is a well-written and funny look at what the numbers reveal about human behavior in the age of social media. It’s both profound and a bit disturbing, because, sad to say, we’re generally not the kind of people we like to think — or say — we are.
Rudder begins his book with a distressing opening salvo: two charts that reveal what age groups men and women generally find attractive. From age 20 to 50, women are consistent — they’re drawn to men who are in roughly the same age cohort. Men are equally consistent: From age 20-50, they are attracted to 20-year-olds. The discussion is over: Men are dogs.
Rudder’s data on race leads to similar implications — prejudice is alive and well on online dating states, and what we say — and don’t say — in our profiles offers impressive support for cultural stereotyping. Rudder does the math on what different groups are most or least likely to say in their profiles: Black men, for example, hardly ever mention Belle and Sebastian, snorkeling or “Dr Horrible’s Sing Along Blog.” White women don’t talk about slow jams, j-pop or Malcolm X. White guys, however, are really into mentioning their “blue eyes,” brewing beer, and Robert Heinlein. Asian men frequently say “tall for an Asian,” “gangnam style” and “noodle soup.”)
Rudder treats these insights into the human condition with bemused — and very useful — intelligence. We’re only just beginning to understand how much we can learn about ourselves and others from the data that is constantly being harvested from us. The more we know, the better armed we are to navigate the future.
Rudder spoke by phone to Salon from OkCupid’s offices in New York.
So men are sexists, and we’re all racist?
The more you look at the data, the more it does confirm the cynics’ intuition about humanity. People online are free to act out their worst impulses with very little incentive to act out their best. I guess it just goes to show how politeness or propriety keeps us decent human beings. Offline, society actually has a very good effect on behavior in a very large sense.
That raises an uncomfortable question: Does our wholesale move online undermine how society traditionally keeps us in line?
I’m not qualified to give a real opinion on where society as a whole is headed, but I think when you look at stuff like rage storms on Twitter, or even the thing that happened yesterday — the celebrity nude photos being leaked — you see that there are definitely some disgusting impulses that the Internet can gratify instantaneously. In the same way Cool Ranch Doritos gratify certain taste receptors that are probably not very good for my digestive tract, things like Twitter or Reddit or even OkCupid gratify our tastes in ways that should probably best be left unsated.
How does that make you feel as a researcher? Have you become more cynical as a result of what you’ve learned by watching how people behave on OkCupid?
I definitely have a certain amount of ambivalence about the Internet generally and what we do at OkCupid. OkCupid does a lot of great things. We do find people love, we do create marriage and children and happiness in a pure sense, in a way that, say, Amazon does not. But there is a downside: In the process of finding that love or sex or whatever they’re looking for, people are able to be more judgmental. It’s a fraught thing. I can see the good and the bad in all this, but where it all comes out in the end, I’m not sure. I think the existence of the Internet is a good thing, but I do wish people exercised more humanity in using these tools.
I’d like to break the format of the typical Q&A a bit, and just read some lines from your book that jumped out at me, and see if I can prompt you to elaborate on them. For example, you wrote that “the Internet will democratize our fundamental narrative.” What does that mean?
What I meant was that the Internet will enable, on a mass scale, something like what Howard Zinn was doing in his “People’s History of the United States.” Zinn’s trying to reach for what the common person thought about World War I or the Civil War, or go back and find out what a housewife in 1970 was thinking about her life. But by and large he had to put it all together from a few diaries and a ton of leg work and obviously there’s a lot of selection bias involved.
But in the future, as people continue to live out their lives through these technologies, all of our lives are almost by definition going to be captured. The computer that is crunching all that stuff pulls us all together. In a very real sense, we are all given the same weight in any of these calculations.
I guess that connects directly to another sentence that caught my eye: “With data, history can become deeper, it can become more.”
That’s exactly what I’m talking about.
How about, “It’s when people don’t understand their own hearts I get interested”?
I like it when you are able to look at a behavior in two ways. One: what people think they are doing or wish they were doing, and two: what they actually do. At OkCupid we have a great mechanism for looking at that: We have all these match questions where we ask people what they believe or what they think, and then we can go in and measure exactly what they are actually doing. I just think that the space between self-image and action is very interesting.
What data points jumped out at you the most?
Well, the most obvious thing is racial messaging patterns. We asked people about race and everybody is like, yeah, interracial marriage is totally great. Something like 96 percent are totally fine with it, or support it. We also asked people questions like “would you ever date someone who told a racist joke” and the answers are very strongly liberal in the way you would expect. Everybody is fine with it, blah blah blah. But then you go out and look at what people do or who they choose for themselves, and you see that this is just not the case. Race is a huge factor and certain types of interracial relationships — I wouldn’t say are taboo, but certainly in the aggregate they are less desirable.
Again this gets back to what we were talking about at the very beginning. If that’s what I want why don’t I just put that into the form? It would work better, if I was just honest with OkCupid and myself about what I wanted.
You mention Naomi Wolf’s “The Beauty Myth” and you wrote, “for the beauty myth, social media signifies judgment day.” Is this just a reflection of the fact that women who are considered highly attractive get by far the most messages from men?
I was having a little bit of fun. There’s just so much judgment that goes on in social media. If most myths are built around some kind of cataclysm or apocalypse, then for the beauty myth, Ragnarok is social media. Men who are free to judge photos without conforming to social norms go crazy clicking girls in bikinis.
Maybe the most discomfiting point you make in your book is your acknowledgment that the kind of people who work for the NSA crunching our data are much smarter than you are and have access to far more information. Eventually, the sophistication of the algorithms will become so great that pretty much everything important about us will be inferred from just a few data points. That’s scarily determinist. Do we even have free will when our data trail tells employers or the government or prospective mates exactly who we are?
That is a great question, and I don’t think I can give an answer that is both hopeful and honest. The tech industry side of me wants to say that this isn’t just a problem of social media — the same thing happens with your credit score, for example. But you are right. It is scary. There will always be highly motivated, powerful entities using this data for their own good, which often implies an adversarial relationship against you. I will say one thing: If we consider Facebook as stand-in for all this stuff, I think people have generally approached these social media networks with a level of naiveté that is changing. We’re beginning to understand the pitfalls of volunteering all this data about ourselves.
That’s why a book like “Dataclysm” is important. The more we know about what you guys are finding out, the easier it will be to set societal guidelines for how this information can be used, and to become masters of our information.
Exactly right. It’s a strange time for me and I’m sure for you too and anybody else working in this milieu. The technologies are pervasive but comprehension of them is not.
Which leads me to my final question. Let’s revisit that experiment in which you tweaked the matching algorithm. I think for a lot of people that smacked of manipulation that crossed over the line. It seemed different than just changing the layout of a page to see what works better. It seemed like you were messing with people’s minds. Why did you do it?
Let me just step back and add a little more context. So, we tweaked an algorithm. Now, some algorithms can be considered as a sort of fact. If you are trying to pull a record out of a database there is a canonical or fastest way or best way to do it and to deviate from that would be silly or would be wrong in a real sense. But when we describe people as good or bad matches — the truth is for any two people on OkCupid, we just don’t know. We’re making a guess; our algorithm is a version of a guess. It’s not a fact.
There are tons of different ways to bring people together. We often use common interests, like how well you and I satisfy each other. But there are other potentially workable heuristics, like, for example, “opposites attract.” The test I wrote about in that blog post was on a continuum of those kinds of tests: We were really genuinely trying to figure out what works best, how to improve the user experience.
What we were doing was different, to me, than “lying.” Lying would be distorting matters of fact, rather than opinion. I have no idea what your sexual orientation is, but just imagine if you were gay, and I go and tell people that you are straight. That’s very clearly false, and possibly harmful. We would never do that because that is altering a fact about people … But with any algorithm that is about how to recommend something — there is no canonical perfect way to do it. So we treat it sort of like an opinion.
But doesn’t that enter a fuzzy area? A selling point of OkCupid is supposed to be that it actually works, which implies that your “opinions” as to who is a good match are actually facts …
For sure. For sure. But part of what makes us sure that we can give people the best match, and that we can make good guesses about what two people are going to get along, is that we are constantly working on refining our methods.
Look, I definitely understand the feelings about what we did. Especially given the way that I first laid it out, and then later, in the way I reacted to the media. Both my presentation and reaction were flawed. But we did not do it to mess with people. Everything we do at OkCupid is done with discretion, and, I hope, some level of emotional intelligence.
Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.
|Spotify Launches Online Video Ads
For Mobile And Desktop Apps
Spotify this week launched two new marketing platforms – one for desktops and one for mobile devices – that will stream video advertising to listeners of its free digital music service. Video Takeover ads appear in the desktop app during regular ad breaks and are only played if the client is in view, while Sponsored Sessions lets marketers play 15- and 30-second spots within 30-minute ad-free mobile sessions. Spotify video-ad launch partners in the U.S. include Kraft Foods, Target, and Wells Fargo, while worldwide launch partners are Universal Pictures, Coca-Cola, Ford, and McDonald’s.
As reported by Variety, Spotify says its users spend an average of 84 minutes per user per day on the service streaming. Among those who use the service across multiple devices, the average is 146 minutes daily. “Our audience is incredibly engaged, so we are delivering an advertising experience that enhances their time spent on Spotify and connects them to the music and brands they love,” Spotify chief business offer Jeff Levick said in a statement. “We think about video as one of the most dynamic forms of content that advertisers have, and that brings great relevance to Spotify. “Brands have clearly stated it’s of interest to them.”
Spotify actually pitched the new video ads to Cannes attendees in June. As a result of those discussions, Spotify added a post-roll element to the Sponsored Sessions that reminds a user of the brand that paid for the ad-free music. “That’s a direct result of the conversations in Cannes,” Levick said, noting there’s a possibility Spotify could use that message to lead someone into a second ad-free session sponsored by that brand.
For years radio broadcasters have lamented the fact that they can’t display a product in their advertising, but digital platforms have broken down that barrier. Any AM/FM station that streams programming should take note.
|Judge Rules ReDigi Founders Could Be
Responsible For Significant Royalty Fees
Remember ReDigi? That was the company that was founded on the theory that what works for selling coins and old cell phones on Craigslist would work for selling “used” digital music online. Not so fast, as Judge Richard Sullivan ruled in 2013, when he declared that – unlike actually handing someone a copy of a CD or book – computers enable a person to copy a digital file and sell one, keeping the other for him/herself. Sullivan ruled this practice violates the Audio Home Recording Act, which states royalties must be paid every time an audio recording is copied, and Capitol Records claimed they weren’t being paid for ReDigi’s sales.
Since that ruling was handed down, ReDigi has kept its site running, as founders John Ossenmacher and Larry Rudolph said they were improving their technology so it only accepted “used” music that can be verified to have been purchased legally. That effort apparently wasn’t enough to satisfy either plaintiff Capitol Records or Judge Sullivan, who last week accepted a motion to hold the two responsible for all unpaid royalties. He explained that the pair “personally conceived of the infringing business model and technology at issue in this case, were the ultimate decision makers concerning the development and implementation of [the] infringing activity, and directed and approved all key aspects of ReDigi’s activities found to infringe Capitol’s copyrights.”
This development means that not only is the company in digital limbo, but Ossenmacher and Rudolph could be held liable for a significant amount in royalties to the record label. The lawsuit almost certainly will drag on for many moons, but things aren’t looking good for the company or its founders. As reported by Forbes, this case is of special importance because it will help shape the direction of the digital marketplace, and it affects much more than the music industry.
|Rdio Launches “Freemium” Service In
Move To Become Spotify-Pandora Hybrid
In what has been called a Spotify-Pandora hybrid, San Francisco-based Rdio has launched a new “freemium” version of its subscription-based platform that allows users to listen to an ad-supported version of the service. The change to a free model is designed to help the company compete against the above-mentioned services, as well as Beats Music and Google’s Play Music All Access. “What we’ve learned collectively over the last few years is that the most successful models are freemium models,” Anthony Bay, Rdio’s chief executive, told the New York Times.
As noted by the Times, Rdio’s move is a result of an arrangement with Cumulus Media. The radio broadcasting company last year was granted an equity stake of at least 15% in Pulser Media, Rdio’s parent company, in exchange for providing content and promotional services that Cumulus says are worth $75 million over five years. “This is the most exciting internet radio product we’ve seen and provides a compelling complement to our nationwide broadcast radio platform,” Cumulus CEO Lew Dickey said.
Users of the new free service will see the web and mobile apps place near-total emphasis on Rdio’s ad-supported radio stations, including more than 60 programmed by human curators, while seeing fewer promos to upgrade to the premium version. All users will have access to the service’s useful new “Home” feed, which offers Facebook-like stories about trending and notable artists, songs, and albums. Users scroll through their feed to find songs their friends are listening to in real time, albums that are trending in the user’s network, and albums from artists that the listener has not yet listened to.
|TuneCore Opens Nashville Office; Hires Music
Veteran Shelby Kennedy As VP To Run It
Independent digital music distribution and publishing company TuneCore announced this week it will open a Nashville office and has hired Shelby Kennedy to serve as VP/ entertainment relations. Kennedy reportedly will work closely with musicians and songwriters to “create career-building opportunities” outside the perceived confines of the major record labels. “Nashville is one of the most creative cities in the world, and Shelby Kennedy has deep relationships and broad expertise in the music industry,” TuneCore CEO Scott Ackerman said in a statement. “As TuneCore expands our support for the increasing number of musicians and songwriters who choose independence to take control of their careers, both are a natural fit.”
According to Billboard, Kennedy is a well-known figure in Nashville, having previously held roles at ASCAP, BMI, Lyric Street Records, and Wide Open Music Group. For the past 18 years he’s operated his own company, Porch-Pickin’ Publishing, and he’s the son of legendary guitarist Jerry Kennedy and brother of songwriter Gordon Kennedy. “I hope to tap my experience spanning the spectrum of roles across the business – from songwriter to performer to business executive – to act as a catalyst in driving opportunities for artists, songwriters, and other key partners,” he said in the same statement
TuneCore is a digital distributor and music publishing administrator for independent artists. It distributes recordings to such digital music services as iTunes, Amazon, Spotify, and Rhapsody. Its music publishing administration division collects publishing royalties from digital services and also handles requests for synchronization licenses.
|AccuRadio Raises $2.5 Million In Funding
Kudos to Kurt Hanson and the rest of the AccuRadio team for securing $2.5 million in a Series A round of funding that comes from NantWorks LLC, a company headed by Dr. Patrick Soon-Shiong. AccuRadio is an online digital music platform similar in delivery to Pandora, but it’s demographically different in that it targets upscale, educated, at-work 35-64 year-olds. The funding reportedly will be used to expand the streaming service to a broader audience via a new PR and marketing campaign.
“We’re delighted to finally be able to bring marketing support to our product,” says CEO Hanson, who also publishes Radio And Internet Newsletter (RAIN). “AccuRadio has industry-leading measures of customer satisfaction, including Average Time Spent Listening in Webcast Metrics and its iOS and Android app.” The platform also is a two-time winner of the Webby Awards’ “People’s Voice” award for Best Radio.
AccuRadio was founded in 2000 and, while weathering tumultuous industry change, has remained profitable for several years. [Full story: Digital Music News]
|Sony Unveils Hi-Res Walkman, Headphones
To “Wrap You In A Sumptuous Experience”
While Apple Inc. was making its usual global tech splash this week, Sony rolled out several new devices designed to bring high-fidelity sound to audiophiles who care about those things. Specifically, the company launched its new Walkman NWZ-A17 hi-res audio digital music player and MDR-1A hi-res headphones, both of which a hype-infused company statement claimed “brings you closer to the spirit and soul of the artist’s original performance – just as you’d hear it on stage or in the recording studio…setting an exciting new benchmark in sound and style…to wrap you in a sumptuous, unparalleled listening experience.”
“As digital audio emerged and allowed consumers to more easily and accessibly enjoy music, audio quality was inadvertently sacrificed,” Sony VP/Sound Division Michael Woulfe explained in the statement. “Sony’s commitment to hi-res audio continues with the new Walkman and MDR-1A headphones. Music lovers no longer have to choose between audio quality and portability – they can finally listen to their music library on-the-go, with the quality that the artist intended.”
The Walkman A17 will be available in November for a suggested retail price of $299.99 at Sony stores and other authorized dealers nationwide. The MDR-1A Hi-Res headphones will be available at the end of September for the same suggested retail price of $299.99. [To read the full statement and product specs, click here]
A publication of Bunzel Media Resources © 2014
Over the past few weeks, the video game community has erupted into a full-blown culture war. On one side are the gaming journalists and developers, circling the wagons around feminist activist Anita Sarkeesian and feminist game developer Zoe Quinn, and on the other side are legions of self-proclaimed “gamers,” outraged that the games they love are being criticized. The “#gamergate” conflict has taken many outside of the video gaming bubble by surprise. But as a longtime gamer, I’ve long expected such a fight to break out. It was pretty much inevitable. And necessary. Here’s why.
The current brouhaha started with Sarkeesian, who has a YouTube series called Feminist Frequency. Feminist Frequency has long tackled what Sarkeesian feels are negative tropes against women in a variety of pop cultural representations – ranging from the LEGO “Boys Club” to the “manic pixie dream girl” in films.
Around a year ago, Sarkeesian released her first series of videos looking at sexist tropes against women in video games. The videos, the result of a Kickstarter fundraising effort, covered territory that should be familiar to just about anyone who has played the most common video games. Anita criticizes, for example, Princess Peach, the perennial Mario Bros. character that in almost every game is kidnapped and then rescued by Mario, Luigi and other male characters. She also offers the same criticism of Princess Zelda in the Zelda series, and many other female characters from Nintendo games. “The Damsel in Distress,” she explains about this trope, “is not just a synonym for weak; instead it works by ripping away the power from female characters, even helpful or seemingly capable ones. No matter what we’re told about their magical abilities, skills or strengths, they’re still ultimately captured or otherwise incapacitated and then must wait for rescue.”
In her most recent set of videos, released at the end of August, Sarkeesian looks at “Women As Background Decoration,” citing, for example, a “Grand Theft Auto IV” section where you can slap a bound woman, a level in “God of War III” where you drag along a half-naked woman, and a portion of the recently released game “Watch Dogs,” in which you visit a sex slave ring.
To much of the world, these sorts of critiques are common – these days we’re taught to be introspective about diversity, inclusion, privilege and power in our workplaces, our homes, our politics. But in video gaming, such discussion is rare. Perhaps that explains why, when faced with Sarkeesian’s critique, a loud and angry subset of gamers chose not to put out well-reasoned responses showing where they agreed or disagreed with her, but react in the same manner you might expect a crowd of Tea Partyers, eager to defend themselves against what they view as an attack on their way of life.
So Sarkeesian has been deluged with sexist hate of all stripes, from virtually every gaming community on the Internet. It reached a peak when she actually had to leave her home following particularly detailed threats made on her by a Twitter user who knew her address and parents’ names.
For years, I’ve been a member of the GameFAQS video gaming community. The website holds web boards for thousands of different video gaming titles, as well as walkthroughs, reviews and other gaming content. The boards are the place where all the discussion about Sarkeesian over the years has taken place. Here’s a small but representative sample of some of the arguments I’ve witnessed about Sarkessian and the feminist critiques of video games or sexist gamers:
- “She honestly kinda brings this **** on herself.”
- “Normally I would be disgusted by something like this, but she was essentially the Westboro church of the internet. You paint a target on your head and dare people to shoot it…someone’s gonna.”
- “These people actually went and taunted the whole goddamn Internet, they got what they deserved.”
- “’Victim’? Please…She’s going to milk this for all it’s worth. She’s gotta keep herself in the spotlight, by any means possible.”
- “Honestly she should have expected this, I’m not saying it’s right but it is 100% expected, there was no way this wouldn’t happen. She’s attacking something that millions of people care about and are passionate about and enjoy just the way they are.
- “The only victims here are the people/hobby she’s riding on (so, everyone) with this, yet another, “victim” claim that people like you are actually enabling by defending her and then she can cozily keep her position despite being entirely 100% incompetent
- “If the entire internet hates you maybe you should rethink your life.”
This isn’t to say that the GameFAQS or the Internet gaming community is pro-death threat. There were only a handful of such comments that I saw. And there were eloquent comments from some gamers denouncing the threats or stating that we should be willing to deal with Sarkeesian’s critique. But the fact is that the sexist gamers are the ones who feel most strongly about the issue, and are so loud about it you’d think Anita Sarkeesian had personally gone around to every male gamer’s home and smashed up their “Call of Duty” discs.
The kind of backlash Sarkeesian has received is also heaped on just about anyone who dares to say that games should have more realistic and diverse representations –for instance, of LGBT, and minorities:
For example, here are some posts from a topic in 2012 about a gay gamer convention:
- “Because obviously gay gamers can’t coexist with straight gamers therefore they need their own convention.”
- “The thing is that no one can tell if you’re gay… so like why don’t they just go to regular conventions?
- “l want a straight white male gaming convention.”
- “You don’t have to acknowledge that racism exists. It’s obvious that it does. Bringing it up all the time isn’t gonna change anything and will just remind people to continue to be racist. Same thing with this gay business.
So it was hardly surprising that a subset of the online gaming community took aim at another target: Zoe Quinn. Quinn is a relatively small-time indie game developer who recently released a free game, “Depression Quest,” which attempts to simulate what living with depression is like. One of her ex-boyfriends posted a long rant alleging, among other things, that she had slept with someone from Kotaku (a popular gaming website) to secure positive coverage of her game. Quinn, and Kotaku, were both deluged with hate mail from gamers convinced that they had uncovered corruption in the gaming industry. Thus, #gamergate was born.
This backlash itself provoked its own backlash — articles and commentary from the gaming press and game developers criticizing the sexist and intolerant “gamer” culture that would drive Anita Sarkeesian out of her home with threats and make thinly sourced insinuations about female game developers like Zoe Quinn. One article that raised particularly wild howls of protest was a Tumblr post by Dan Golding, the director of an indie game festival in Australia. Titled “The End of Gamers,” the post criticizes the sexist smears and threats against Quinn and Sarkeesian, and concludes:
“Today, videogames are for everyone. I mean this in an almost destructive way. Videogames, to read the other side of the same statement, are not for you. You do not get to own videogames. No one gets to own videogames when they are for everyone. They add up to more than any one group.
On some level, the grim individuals who are self-centred and myopic enough to be upset at the prospect of having their medium taken away from them are absolutely right. They have astutely, and correctly identified what is going on here. Their toys are being taken away, and their treehouses are being boarded up. Videogames now live in the world and there is no going back.
I am convinced that this marks the end. We are finished here. From now on, there are no more gamers—only players.”
Change a few words here and there, and you could almost have an essay by an immigration activist instructing Tea Partyers to get over the fact that America will no longer be a white nation, or a gay rights icon proclaiming that the United States will one day soon have full marriage equality and Pat Robertson needs to learn to deal.
But there’s another element at play here that doesn’t exist in the great culture wars over immigration, gay rights or other leading social wedge issues. Video gamers as a group are not a powerful elite the same way other “threatened” groups in the country are. In fact, their hobby is itself often viewed as a refuge of loners.
My feeling is that the bunker mentality that gamers have adopted in response to the critiques from Golding and others is, at least partly, understandable. Gamers have spent their lives being told their lifestyle is marginal, the refuge of nerds who couldn’t get a date to prom. Now, gamers feel that the one space where they could say they were on top – in the online worlds of “Call of Duty,” conventions like DragonCon and ComicCon, and LAN parties the world over – is being flooded with opinions from people who previously wanted little to do with them.
In light of the attacks on Quinn and Sarkeesian, developers and journalists alike have been vociferously critical of “gamers,” not doing too much to distinguish between the majority of gamers and the loud, angry, sexist members of the community. Virtually every established gaming and tech website, from ArsTechnica to Gamasutra (which wrote that “gamers are over”), to the Verge to the Escapist, has published lengthy critiques of gaming. One of the writers of the upcoming “Far Cry 4″ tweeted: “If you are against social justice, you are going to hate some of the things we wrote for Far Cry 4.” One of the creative directors of the Saints Row series admitted that Sarkeesian’s critique of his games was accurate and called for change. This has provoked the #gamergate crowd to create a boycott list, which includes virtually every single well-established gaming news website and the developers speaking up against sexism and intolerance. The Reddit community r/KotakuInAction is one of the organizing points.
The sad thing is that even if you don’t believe that there is serious sexism in the gaming community, gamers do actually have serious reasons to be skeptical of their gaming press and developers. Game companies are nickel-and-diming consumers like never before, cutting out large sections of their games and selling them for full price while selling those add-ons for exorbitant fees. Meanwhile, Zoe Quinn may not be a real scandal, but game publishers and journalists who review games have gotten far too cozy – witness how Ubisoft gave an entire audience of journalists free tablets as they prepared to review its (in my opinion) fairly average game “Watch Dogs.”
As if there wasn’t enough hostility between gamer culture, feminists and the industry, one additional group joined the fracas: traditional right-wing activists. Christina Hoff Sommers, an American Enterprise Institute fellow who has made a name for herself as a professional anti-feminist, writing a book about the “War Against Boys,” and denying the gender pay gap, joined in the debate with tweets such as: “Term ‘rape culture’ is sexist. Implicates average guy in a horrible crime. Call people out who use it. It’s a form of gender profiling” and “Most gamers seem to support equality feminism. What they reject is today’s male-bashing, propaganda-driven, female chauvinism. #GamerGate.” Breitbart London’s Milo Yiannopoulos, fresh from blaming Jennifer Lawrence for her own photographs being stolen, tweeted with #GamerGate that advocates for tolerance are “often the most spiteful, hateful, intolerant people around.”
With the entry of Breitbart and AEI, the pseudo-culture war was complete – with a massive civil war between “gamer” culture and traditional conservatives on one side and virtually the entire industry itself and feminist activists on the other.
But what’s been lost in all this is that there actually has been a movement in video games to tell more dynamic and positive stories featuring women, LGBT characters, racial minorities and other nontraditional demographics. And these games aren’t just the fringe. “The Last of Us,” for example, has numerous prominent realistic female characters, including a lesbian teenage character who as a lead (SPOILERS) at one point has to save her much older male compatriot from ruthless gangsters; it has won more “game of the year” titles than any other game ever released, and sold over 7 million copies.
After the series “Tomb Raider” decided to downsize its heroine’s ridiculous bosom and created a less sexist and more realistic portrayal, in a game where she heroically saves her colleagues from vicious and violent men, the game sold around 6 million copies and has a sequel greenlighted.
Indie games like “Papers, Please,” which include social justice-related themes such as combating authoritarianism and creating a fair immigration system, sold more than half a million copies; following the #GamerGate civil war, developers from across the industry have signed a sort of peace letter calling on all sides to agree that “everyone, no matter what gender, sexual orientation, ethnicity, or religion has the right to play games, criticize games and make games without getting harassed or threatened. It is the diversity of our community that allows games to flourish.”
What all this shows is that gaming is far from the male-dominated sausage-fest that some of its critics and proponents claim it to be. It is diversifying and drawing in a wider pool of both developer talent and player base. However, we still live in a world where stellar developer Naughty Dog has to boast that 14 percent of its staff aren’t men, and where the gaming industry sees fit to use women as props at its largest annual trade show. And it’s a world where gamers are often marginalized and mocked by those who don’t regularly play video games, where the late Roger Ebert once wrote a long essay proclaiming that video games “can never be art,” and that they are instead “pathetic” when compared to the works of great poets, novelists and filmmakers.
As someone who’s spent his life gaming, and who cares deeply about social justice, I believe that the two can coexist – that we can have games that portray women and minorities in inoffensive ways, and those games can still be incredibly fun, and that all gamers won’t be tarred with a broad brush because of the brash actions of a few. But it starts by recognizing that there are problems in parts of gamer culture, that games are improving, that we do deserve a better gaming press. If we can come to terms with all that, then we can all game on, in a way that respects everyone involved.
Zaid Jilani is a Syracuse University graduate student and freelance writer. Follow him @zaidjilani.