Tag Archives: platforms

Types of Publishing Platforms

There are three (maybe four) kinds of publishing platforms

Consumer-side economies of scale are currently disrupting the publishing industry. That is why the rise of consumer-side economies-of-scale platforms is currently the biggest news in publishing. The increasing power of platforms such as Twitch (widely used by gamers) is removing the prestige associated with journalism. Likewise, the loss of audience from “traditional media” (employee-produced, with no consumer-side economies of scale) means that traditional media needs to further cut wages, and cut quality.

There are three (and maybe four) important kinds of publishing platforms

  • Consumer-produced, consumer-side no economies of scale
    Most published content is produced by users of the service. Each additional consumer/producer does not increase the utility of the service for other users (in ways not related to producer economies of scale)
    Examples: WordPress
  • Consumer-produced, consumer-side economies-of-scale
    Most published content is produced by users of the service. Each additional consumer/producer increases the utility of the service for other users (in ways not related to producer economies of scale)
    Examples: infiniteChan, Facebook, Reddit, Tumblr, Twitch, YouTube
  • Employee-produced, no consumer-side economies of scale
    Most published content is produced by paid employees or contractors. Each additional consumer/producer does not increase the utility of the service for other users (in ways not related to producer economies of scale)
    Example: The Washington Post
  • Employee-produced, consumer-side economies of scale
    Most published content is produced by paid employees or contractors. Each additional consumer/producer does not increase the utility of the service for other users (in ways not related to producer economies of scale)
    Example: This may not exist in a pure form. But a pretty close example is Amazon Kindle, where the bulk of the material is created by paid authors, while reviews and annotations are shared between consumers.

Interestingly, Amazon.com is involved in three of these platforms. Amazon owns Twitch, Kindle, and Amazon CEO Jeff Bezos owns the Washington Post.

Just as interesting is the predictable way besieged “traditional media” (employee produced, and without economies of scale) attacks “new” media with consumer-side economies-of-scale. For example, the Washington Post employs Caitlin Dewey, whose only responsibility appears to be targetting media that has consumer-side economies-of-scale. Recent targets include

If you didn’t know the kinds of publishing platforms, you might think the Washington Post was just publishing objectively interesting news, or that Amazon was just a book seller.

How Platform Monopolies Fail

Technology platform tend towards monopoly. Whether physical or virtual, platforms provide a level playing field for other actors to use to their advantage. The predictability of monopolies allows other actors to plan for the future, and the technological stabilization they present make the road ahead a lot less frightening for most involved. Monopolies cannot and do not “charge whatever they want” — they price their goods so that they capture a portion of the value they provide that is still low enough to deter other potential competitors from entering the market.

Markets fail through either lack of empathy or lack of understanding. Lack of empathy occurs when the monopoly is blind to the political concerns of other stakeholders, and they therefore use their power to break the monopoly. For instance, in the United States, the left-of-center turned strongly against the physical sciences after the Vietnam War, at the same time at the right-of-center was agitating against government control. The Bell System, by continuing to fund physics research while relying on government control of rates, thus back unempathetic to other actors, and was broken up.

General Motors was a much more empathetic monopoly. They encouraged the growth of the United Auto Workers, allowing both the capital and labor sides of the organization to strongly influence the Republican and Democratic parties, respectively. GM cleverly overcharged for their products, allowing niche competitors such as Ford and Chrysler to survive (and providing a veneer of competiton), while keeping those marginal companies captive through the threat of lower prices. Indeed, GM as an organization was so empathetic that management and labor was bailed out by the Bush and Obama administrations! Unfortunately for GM,the shock of high oil prices lead to a decline nonetheless.

In the US education system, the Teachers Front Organizations opeated as a monpoly for nearly a century, until being replaced by the federal-academic complex.The reason was both lack of empathy and an external shock. The lack of empathy was exhibited primarily from the Teachers Front Organizations’ lack of concern with State power or Employer’s seeking workers that can be hired. The external shock was first the sexual integration of the American workplace, followed by globalization.

I imagine that if either of these things had not been there — if the Teachers Front Organizations had not been lacking in empathy, if the workplace had not been integrated, or if globalization had not occured, the Teachers Front Organizations would stil be the platform monpoly in the US educational system. If the workforce had not been integrated, teaching would not have suffered from the lobotomy of low wages, as the sexism discount would have still brought many high-performing women into teaching. Likewise, if globalization had not occured, large employers would not have faced the stress of tring to hire a proportionate fraction of their labor force in the United States while facing a disproportionate incompetent labor force in the form of public school graduates.

The consequences of this failed monopoly are as hard for teachers as the failure of the Bell System or GM where for their stakeholders. The teacher leadership in the United States has left everyone — including teachers — down.

Monopolies do not last forever. And monopolies are not all bad. But the Teachers Front Organizations died as a monpoly because it was bad at its most basic job: survival

Organizing my Thoughts on Platforms

While reading more about education reform, I came across this post by my friend Mark — “Two Links on Political Economy” — that in term referenced to articles by John Robb, “BOW-TIE CONTROL SYSTEMS,” and “JOURNAL: Global Financial Cancer. While John’s rhetoric is typically melodramatic, he uses the terms “bow-tie” and platform” to refer to what I’ve called a “bank” and a “central actor.” I like the term “platform,”so I went back to understand where else I’ve used the idea on the blog.

Under the Term “Central Actor”

Social Platforms

Transportation

Warfare

Referencing Other Writers

Review of “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger,” by Marc Levinson

Some time ago I read The Box, Marc Levinson’s excellent history of the shipping container. The Box reads like a third appendix to Nature’s Metropolis, a debt that the book acknowledges. It is a fascinating description of the importance of platforms in business. And it describes the different responses of labor bosses to ‘the box’ (containerization), and how those responses shape lives today. If you want to see how a technology you take for granted shapes the world, definitely read The Box!

Nature’s Metropolis is a brilliant history of Chicago and the Great West. The book focuses on economic determinism, and how once men create a ‘second nature’ from capital, actions are compelled in the same way that would have been if that build world had been the ‘first nature’ of the place. For instance, rivers make certain transportation methods logical and are part of the first nature of an environment. Railroads make other transportation methods logical, and are part of second nature. Nature’s Metropolis ends with the establishment of the national railroad system. The Box picks up the story generations later, when the railroad system appears to be just natural, and a new second nature is about to be born.

A few months ago I gave a standing-room lecture at my alma mater. I described the business of my employer as focused on platforms, the building (and selling) the infrastructure to allow other people to sell products. Platforms are the components that allow new things to be possible. For instance, wireless internet (WiFi), laptop computers, and HDTVs (TVs which double as computer monitors) allow you to repurpose any media from anywhere in the world as a ‘show’ for an extended family. This could not be done without any piece of the infrastructure — the mobile entertainment platform requires all these scaffolds. Likewise, containerization requires container-ready trucks, container-ready-ships, container-ready trains, and container-ready labor. Without any one of these, containerization is not profitable.

I remember from a young-age hearing about the six-figure salaries of longshoremen on the West Coast. Little did I realiez that this happy payscale was because of wise leadership. While the backwards International Longshoremen’s Association opposed containerization as a threat to jobs on the East Coast, the wiser International Longshore and Warehouse Union (led by a former transportation-industry manager) took a wiser coast: an agreed upon fraction of savings from containerization would go to higher salaries. If only labor agitators in the education sector could be as clever as the ILWU!

My recommendation? Read The Box. It is great introduction to economic history. It is the story of a technology platform that you may not even realize exists. And it a description of how smart unionism can lead to good lives for workers by understanding technologal chnage.

The Military-Industrial-Sysadmin-Complex is a 5GW Platform

Robb, J. (2007). A private sector war in Iraq? Global Guerrillas. July 4, 2007. Available online: http://globalguerrillas.typepad.com/globalguerrillas/2007/07/iraq-is-now-a-p.html.

John’s right:

This trend towards privatization will not be reversed despite the desire by many to return to 20th century legacy force structures. Instead, the trend will continue to accelerate as the threat of disorder (accelerated by global guerrillas) begins to dwarf state vs. state conflict — the last refuge of the uniformed military…. experience with platforms (usually with a layer of information technology as a fundamental building block) across a wide variety of complex situations (most successful global firms are transitioning to them, as evidenced by a Harvard Business School study I conducted a couple of years ago) shows that they could work in this area too since they grow efficient business ecosystems, establish coherence, supercharge innovation, and provide substantial improvements in flexibility/adaptability.

Platforms are a vital part of our future success. The Military-Industrial-Sysadmin-Complex that I outlined for our 5GW to Shrink the Gap is such a platform.

While Robb presumably sees platforms are more useful in distributing small-scale violence, this is less of a threat to the United States than to other nations. Unlike the regimes spawned by the French revolution, America was built with “bazaars of violence” in her DNA: The 2nd Amendment to the Constitution protect the rights of the States to form their own militias and the right of the people to arm themselves in self-defense organizations as well.

For more on platforms, see the related articles at Kent’s Imperative, Thomas P.M. Barnett, and Zenpundit, and the related discussion at Dreaming 5GW