economics

Rock, get up, get down, miuzi weighs a ton

34.jpg

Enter Spotify, a platform that is definitely not the answer. In fact, it only exacerbates such conundrums. Yet for now it has manipulated the vast majority of music industry “players” into regarding it as a saving grace. As the world’s largest streaming music company, its network of paying subscribers has risen sharply in recent years, from five million paid subscribers in 2012 to more than sixty million in 2017. Indeed, the platform has now convinced a critical mass that paying $9.99 per month for access to thirty million songs is a solid, even virtuous idea. Every song in the world for less than your shitty airport meal. What could go wrong? […]

Indeed, Spotify’s obsession with mood and activity-based playlists has contributed to all music becoming more like Muzak, a brand that created, programmed, and licensed songs for retail stores throughout the twentieth century. In the 1930s, the company prioritized workplace soundtracks that were meant to heighten productivity, using research to evaluate what listeners responded to most. […]

Spotify playlists work to attract brands and advertisers of all types to the platform. […] We should call this what it is: the automation of selling out. Only it subtracts the part where artists get paid.

{ The Baffler (2017) | Continue reading | Thanks Tim }

I want to grow my own food but I can’t find bacon seeds

24.jpg

ExxonMobil, Shell, and Saudi Aramco are ramping up output of plastic—which is made from oil and gas, and their byproducts—to hedge against the possibility that a serious global response to climate change might reduce demand for their fuels, analysts say. Petrochemicals, the category that includes plastic, now account for 14 percent of oil use and are expected to drive half of oil demand growth between now and 2050, the International Energy Agency (IEA) says. The World Economic Forum predicts plastic production will double in the next 20 years.

{ Wired | Continue reading | Thanks Tim }

previously { The missing 99%: why can’t we find the vast majority of ocean plastic? }

photo { Kate Ballis }

Is there ever a day that mattresses are not on sale?

31.jpg

The prospect of data-driven ads, linked to expressed preferences by identifiable people, proved in this past decade to be irresistible. From 2010 through 2019, revenue for Facebook has gone from just under $2 billion to $66.5 billion per year, almost all from advertising. Google’s revenue rose from just under $25 billion in 2010 to just over $155 billion in 2019. Neither company’s growth seems in danger of abating.

The damage to a healthy public sphere has been devastating. All that ad money now going to Facebook and Google once found its way to, say, Conde Nast, News Corporation, the Sydney Morning Herald, NBC, the Washington Post, El País, or the Buffalo Evening News. In 2019, more ad revenue flowed to targeted digital ads in the U.S. than radio, television, cable, magazine, and newspaper ads combined for the first time. It won’t be the last time. Not coincidentally, journalists are losing their jobs at a rate not seen since the Great Recession.

Meanwhile, there is growing concern that this sort of precise ad targeting might not work as well as advertisers have assumed. Right now my Facebook page has ads for some products I would not possibly ever desire.

{ Slate | Continue reading | Thanks Tim }

related { Amazon CEO Jeff Bezos says his company is developing a set of laws to regulate facial recognition technology that it plans to share with federal lawmakers. }

Three metamorphoses of the spirit do I designate to you: how the spirit becometh a camel, the camel a lion, and the lion at last a child.

44.jpg

Some examples of people quickly accomplishing ambitious things together.

Dee Hock was given 90 days to launch the BankAmericard card (which became the Visa card), starting from scratch. He did. In that period, he signed up more than 100,000 customers.

[…]

On August 9 1968, NASA decided that Apollo 8 should go to the moon. It launched on December 21 1968, 134 days later.

[…]

The Empire State Building. Construction was started and finished in 410 days.

{ Patrick Collison | Continue reading }

Three quarks for Muster Mark!

41.jpg

In 2016, London-based DeepMind Technologies, a subsidiary of Alphabet (which is also the parent company of Google), startled industry watchers when it reported that the application of artificial intelligence had reduced the cooling bill at a Google data center by a whopping 40 percent. What’s more, we learned that year, DeepMind was starting to work with the National Grid in the United Kingdom to save energy throughout the country using deep learning to optimize the flow of electricity.

Could AI really slash energy usage so profoundly? In the three years that have passed, I’ve searched for articles on the application of AI to other data centers but find no evidence of important gains. What’s more, DeepMind’s talks with the National Grid about energy have broken down. And the financial results for DeepMind certainly don’t suggest that customers are lining up for its services: For 2018, the company reported losses of US $571 million on revenues of $125 million, up from losses of $366 million in 2017. Last April, The Economist characterized DeepMind’s 2016 announcement as a publicity stunt, quoting one inside source as saying, “[DeepMind just wants] to have some PR so they can claim some value added within Alphabet.” […]

Many of McKinsey’s estimates were made by extrapolating from claims made by various startups. For instance, its prediction of a 10 percent improvement in energy efficiency in the U.K. and elsewhere was based on the purported success of DeepMind and also of Nest Labs, which became part of Google’s hardware division in 2018. In 2017, Nest, which makes a smart thermostat and other intelligent products for the home, lost $621 million on revenues of $726 million. That fact doesn’t mesh with the notion that Nest and similar companies are contributing, or are poised to contribute, hugely to the world economy.

{ IEEE Spectrum | Continue reading }

‘But as the power of Hellas grew, and the acquisition of wealth became more an objective, the revenues of the states increasing, tyrannies were established almost everywhere.’ –Thucydides

4.jpg

“Financial machine learning creates a number of challenges for the 6.14 million people employed in the finance and insurance industry, many of whom will lose their jobs — not necessarily because they are replaced by machines, but because they are not trained to work alongside algorithms,” said Marcos Lopez de Prado, a Cornell University professor. […]

Nasdaq runs more than 40 different algorithms, using about 35,000 parameters, to look for market abuse and manipulation in real time.

{ Bloomberg | Continue reading }

related { 90% of high-tech job growth concentrated in just 5 cities: Boston, San Francisco, San Jose, Seattle and San Diego }

photo { Matthew Reamer }

We are advised the waxy is at the present in the Sweeps hospital and that he may never come out!

62.jpg

Ethos Capital, a new commercial investment firm founded in the past few months in Boston, has 2 staff and only one major investment: a deal to acquire the 501c3 non-profit [Public Interest Registry] that currently runs the .org domain (valued at a few $B), for an undisclosed sum.

This was initiated immediately after ICANN decided in May, over almost universal opposition, to remove the price cap on .org registrations with no meaningful price protections for existing or future registrants.

{ The Longest Now | Continue reading }

Internet Society (ISOC) has sold the .org registry Public Interest Registry (PIR) to private equity company Ethos Capital. […] PIR generated $101 million in revenue in 2018 and contributed nearly $50 million to Internet Society. […]

Ethos Capital is a new private equity firm lead by Erik Brooks. Brooks was at Abry Partners until earlier this year. Abry Partners acquired Donuts and installed former ICANN President of Global Domains Akram Atallah in the top spot there. […] The other person at Ethos is former ICANN Senior Vice President Abusitta-Ouri.

{ Domain Name Wire | Continue reading }

I wish I was little bit taller I wish I was a baller

7.jpg

A Japanese hotel offers a room that costs only $1 per night, but there’s a catch — the guest’s entire stay is livestreamed on YouTube.

{ UPI | Continue reading }

Are we someone else when we lie?

[Google CEO] Eric Schmidt continued: “Our business is highly measurable. We know that if you spend X dollars on ads, you’ll get Y dollars in revenues.” At Google, Schmidt maintained, you pay only for what works.

Karmazin was horrified. He was an old fashioned advertising man, and where he came from, a Super Bowl ad cost three million dollars. Why? Because that’s how much it cost. What does it yield? Who knows. […]

In 2018, more than $273bn dollars was spent on digital ads globally, according to research firm eMarketer. Most of those ads were purchased from two companies: Google ($116bn in 2018) and Facebook ($54.5bn in 2018). […]

Picture this. Luigi’s Pizzeria hires three teenagers to hand out coupons to passersby. After a few weeks of flyering, one of the three turns out to be a marketing genius. Customers keep showing up with coupons distributed by this particular kid. The other two can’t make any sense of it: how does he do it? When they ask him, he explains: “I stand in the waiting area of the pizzeria.” […] Economists refer to this as a “selection effect.” It is crucial for advertisers to distinguish such a selection effect (people see your ad, but were already going to click, buy, register, or download) from the advertising effect (people see your ad, and that’s why they start clicking, buying, registering, downloading). […]

The online marketing world has the same strategy as Luigi’s Pizzeria and the flyer-handling teens. The benchmarks that advertising companies use – intended to measure the number of clicks, sales and downloads that occur after an ad is viewed – are fundamentally misleading. None of these benchmarks distinguish between the selection effect (clicks, purchases and downloads that are happening anyway) and the advertising effect (clicks, purchases and downloads that would not have happened without ads).

It gets worse: the brightest minds of this generation are creating algorithms which only increase the effects of selection. Consider the following: if Amazon buys clicks from Facebook and Google, the advertising platforms’ algorithms will seek out Amazon clickers. And who is most likely to click on Amazon? Presumably Amazon’s regular customers. In that case the algorithms are generating clicks, but not necessarily extra clicks.

{ The Correspondent | Continue reading }

Nature does not work with an end in view

2.jpg

[A]verage quality-adjusted single-family house prices, corrected for overall inflation, have risen a paltry 1.1% at a compound annual rate since 1972. […] Since 1972, 30-year fixed-rate mortgage rates in real terms have averaged 4.1%, meaning it has cost the homeowner 3% per year to own a house before taxes, maintenance, utilities and insurance. That’s a real negative return.

{ Bloomberg | Continue reading }

photo { Frank Lloyd Wright at the Guggenheim Museum during construction, photographed by Sam Falk, 1957 | NY Times }

How do we make use of this life that we still have?

21.jpg

Several weeks ago, I met up with a friend in New York who suggested we grab a bite at a Scottish bar in the West Village. He had booked the table through something called Seated, a restaurant app that pays users who make reservations on the platform. We ordered two cocktails each, along with some food. And in exchange for the hard labor of drinking whiskey, the app awarded us $30 in credits redeemable at a variety of retailers. […]

To throw cash at people every time they walk into a restaurant does not sound like a business. It sounds like a plot to lose money as fast as possible. […]

If you wake up on a Casper mattress, work out with a Peloton before breakfast, Uber to your desk at a WeWork, order DoorDash for lunch, take a Lyft home, and get dinner through Postmates, you’ve interacted with seven companies that will collectively lose nearly $14 billion this year. […]

The meal-kit company Blue Apron revealed before its public offering that the company was spending about $460 to recruit each new member, despite making less than $400 per customer. […] since Blue Apron went public, the firm’s valuation has crashed by more than 95 percent. […]

{ The Atlantic | Continue reading }

photo { Detroit Science Center, 1979 }

unrelated { Apple announces $2.5 billion plan to ease California housing crisis }

Why, why, tell ‘em that it’s human nature

Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend.

{ Matt Levine / Bloomberg | Continue reading }