Who Benefits from Silicon Valley?


I got into the music business in 1967, at the height of a creative and economic boom. Technology had almost nothing to do with the business, as the LP that had been introduced in 1948 was still in use. The Beatles Sgt. Pepper’s Lonely Hearts Club Band album had been recorded on a 4 track Studer recorder (above) and that was the “state of the art”.But today, the business is dominated by technology companies. Just as much music is consumed as in 1967 (probably more), but most of the value flows to Silicon Valley and not to the musicians. Spotify had gross revenues of over $600 million last year, but an artist would have to have more than 4 million plays per month to make the minimum wage of $1,160 per month.

So if the massive reallocation of value has flowed from musicians to geeks, what exactly have we gained except “convenience”? This thought came to mind as I read Annie Lowery’s story “If A Bubble Bursts in Palo Alto, Does It Make A Sound?” Lowery makes the point that both the gains and the losses in Silicon Valley have relatively little effect on the rest of the economy. Tech firms hire relatively small numbers of people and pay them astronomic sums of money. So even if the bubble burst, not that many people would get hurt.

The truth is that most Americans have little interaction with the big-money, small-jobs technology boom, so they might be sheltered from the worst of the technology bust, at least as it looks today, if not years from now. But that might be cold comfort: It is a sad state of affairs if one of the most vibrant, explosive and creative parts of the economy — and one of the few that is minting millionaires — seems more like a walled garden than a public park.

If you think about the technology boom at the beginning of the 20th Century–electricity, automobiles, airplanes—the benefits were widely dispersed throughout the society. Millions of jobs were created and everyone’s life improved. It seems to me the tech community today has been very good at the “creative destruction” part of the innovation equation, but has been far less creative in imagining how to rebuild the businesses they destroyed. From my own personal experience, neither the music not the journalism business has recovered from tech’s wholesale disruption. When people point out to Google what a huge part they play in this destruction, they hide behind libertarian tropes to excuse the fact that they are constantly linking to pirate sites.

The artists themselves as well as the editors of news sites are pushed into the role of “branded content”, which is a nice way of saying “selling out.” You can make a nice parlor game of counting the amount of product placement in a music video or which piece of news you are reading is “sponsored content”. I assume the guilt of destroying once vital businesses eventually comes home to roost in the guts of the tech billionaires. They buy a newspaper, sponsor a film festival or build a museum to honor Jimi Hendrix. But it’s just guilt money. It’s not helping the average guitar picker or beat reporter trying to make a living.

When you live in a walled garden, everything seems perfect.

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4 Responses to Who Benefits from Silicon Valley?

  1. chubbco says:

    They need a smart snake with a tasty apple to get them out of that garden and into the real world — where all their “world-changing” tech has had no impact on the average income of most Americans (except perhaps to help it decline a little more).

    Solving transportation problems in San Francisco with black cars is hardly the awesomely noble pursuit most of my tech friends think it is.

  2. len says:

    “When you live in a walled garden, everything seems perfect.”

    Is it the wall or the garden? Access is achieved. The nature of the garden is at issue.

    Or: all social media are acts including the means of creating social media. As the cultural means follows the technical evolution into social media as immersive media, the means of creating conversation as intentional act considers the means of creating and sustaining character. Scripted acts are mixed into live conversation now.

    To get paid, orchestrate the conversation, or curate it if you must, but the desolation of this garden has to be met with the willingness of the artists, be they image, sound, animation or real-time acts, to collaborate in greater numbers and more globally dispersed assets. The garden which was yours when you were a master in the garden was also closed, small and built of self-selected self-organizing bands of merries and cherries protected and nurtured by the walls of an industry that cared to this and profited by it. In the garden of today, the industry shepherds cold collections of multi-processors that are but the record player of yours so yes, this is a different garden altogether. The owners of this one are geeks. Geeks can build a wall or an open garden, but they cannot create nor well-manage the produce or at least to this point, as a money collective, they have yet to do that well.

    It almost seems that the days of the Media Moguls may emerge again. Most of Web history has been a history of individuals who disrupted the businesses in which they put their toes and then their whole gazentas. This media awaits creative genius and smart money to create product that makes the best of the media at hand as informed by the memes of the media that have come before. I swear, there is such creative potential awaiting the ones who turn from the past and face that potential with the joy of the song of solomon: arise my love my beautiful one and come away… love is strong as death.

  3. Fentex says:

    most of the value flows to Silicon Valley and not to the musicians. Spotify had gross revenues of over $600 million last year, but an artist would have to have more than 4 million plays per month to make the minimum wage of $1,160 per month.

    Spotify paid out about $500 Million, so most of the benefits of it’s income flowed to artists. It’s a bit foolish to choose one business not being parasitical to suggest all online companies are.

    Techdirt continues to persuasively counter complaints about Spotifys rates.

  4. Fentex says:

    Also articles and research such as quoted here help convince me that people complaining times are changing are not proving it’s for the worse.

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