Monopoly: Play and Win





In “The Master Switch: The Rise and Fall of Information Empires”, Tim Wu claims that “the shift from an open industrial phase to a closed market usually begins when capital interests spy the potential for vastly increased profit through monopoly” (52). This is not a surprising statement as nowadays everything revolves around money. However, every new media of the past century – radio, telephony, television, and film – was initially considered a revolution of the forms of expression, a long awaited chance to improve the standard of life. Time proved that all these seemingly ideal innovations fell victims to what Wu has identified as the “the Cycle”, a pattern that describes the evolution from “a freely accessible channel to one strictly controlled by a single corporation or cartel” (6).

Once upon a time, an invention is born that revolutionizes the information industry and gives people the opportunity to express themselves in unthinkable ways. Soon, though, “sinister forces” (Wu 77) emerge as a few people notice something else: how by dominating the new environment, one can build an empire.

This is the recurring theme throughout Wu’s book. Wu also debates that the would-be moguls have a complex personality and nurture dreams of becoming gods. Nonetheless, the most obvious force that drives the closure of an open system remains the power of money. A key figure in Wu’s profiles of “defining moguls” (29) is Adolph Zukor – the “boss-of-bosses” (Wu 91) of the movie industry. Zukor’s approach was vertical integration in his quest to control all the parts that formed the entertainment industry: production, distribution, and exhibition. A centralized film industry implied “streamlined production and virtually guaranteed audiences” (Wu 89) and, thus, larger profits.

The film industry is probably the best embodiment of the power of money. Who does not associate Hollywood with making the big bucks? For me, it is also impressive how the “gang of octopuses” (Wu 235) have seized control of the international marketplace. A relevant example is when a movie bombs at the American box-office, but this does not affect the studio because it performs well overseas. Could it be the idea of the American dream, the glamorous stars, or, more recently the lure of 3D, that make the American movies so popular all around the globe? It is difficult to say but it is surely true. I always knew that the national film industry in Romania, as well as in other European countries, has been seriously disturbed by Hollywood, but I did not think of the magnitude of this monopoly. It is remarkable how money appears to be travelling around the world, regardless of borders.

Going back to America, the most enduring monopoly can be found in the phone industry. Some might argue that the second Bell Monopoly contributed to the public good as stated by its slogan: “One System, One Policy, Universal Service”. Sounds perfect, right? But as Wu points out AT&T sabotaged many of its competitors. It seems normal that the market of a reliable telephone company can provide a stable source of revenue. Nevertheless, this was not the goal. AT&T wanted larger profits and that led to monopoly.

The Cycle also turned on the radio, once considered the greatest open medium. It was something ideally about the power of broadcasting to bring people together, and, at the same time, to allow new voices to be heard. Soon though, “general” broadcasting was imposed which benefitted giants as NBC, and later CBS. This situation also sheds light on another practice in monopolistic industries which is to suppress the forms of expression. Once again money was the force that set in motion another cycle when it was acknowledged that “profit is not tied to the proliferation of many voices but to the propaganda of a few – to the mass production of speech, as it were” (Wu 130). The conclusion seems to resemble a mathematical equation, but the audience factor is sadly not even taken into account. This becomes very relevant at present, especially when we realize that Internet is based on the same principle of openness.

A very similar path took the development of cable television. Its capabilities were initially limitless: “revive local communities, and offer every American direct access to the world’s knowledge and wisdom” (Wu 176). But it was Ted Turner who saw the entire potential of the cable industry, and, particularly of a consolidated one. He created the first cable network and was soon joined by numerous other networks which targeted a particular audience. This was not the typical monopoly but each of the networks held its own control over targeted groups.

The cable industry’s formula was “a constant appetite for cash and for content that could deliver a sufficient audience to yield a return on capital” (Wu 215). This is yet another instance of an information industry that benefitted from a restricted access but only on a financial level. In terms of content it is rather questionable whether mass media was an improvement. It is when politics rule what we see and hear on TV that it really becomes dangerous. In the worst scenario, we are exposed to just one side of the story and we end up believing it because we do not have enough resources to make our own decisions.

The progression from an open information industry to a closed one is inevitably linked to the dreams of maximizing profit. Greed is not the ultimate goal of the corporate titans but it is what triggers the first phase of the Cycle, because every would-be information mogul starts by wanting to make money from his or her products.

Geek&Poke

Particularly, Wu’s contention is of vital importance for the future of the Internet – the information industry that we all rely upon (the current situation in Egypt speaks for itself).

So, can we still have a happy ending? As I want to end in an optimistic note I will say yes, though we have to care more about what happens around us. After all, the virtual world exists as long as the real one allows it.

Work Cited:

Wu, Tim. The Master Switch: The Rise and Fall of Information Empires. New York: Knopf, 2010.