Here Come the Trust Busters, Part 2

Alert readers will recall that in my previous blog I questioned whether Big Tech/Big Data had monopolistic motives. And lo and behold, last week the DOJ went full antitrust nuclear. First I inspire Superman to build a computer, and now the U.S. Government and eleven state Attorneys General filed suit against Google. Never, ever, underestimate the power of Sound & Vision magazine.

Big Tech/Big Data companies have a profound effect on global societies. They offer tremendous resources, tools, and conveniences for us; it would be difficult to imagine modern society without them. But many of the services that Big Tech/Big Data provide us come with various strings attached such as potentially reducing competition, creating monopolies, and invading privacy. Those strings might be a problem for you, or you might not care at all.

I'd love to have a beer with you and discuss all this, but let's focus on one particular issue: Big Tech/Big Data's role in audio/video innovation. My observations might surprise you.

Last time I questioned whether Big Tech/Big Data could innovate in the traditional sense. Based on my personal observations, I can attest that most of my most talented students gladly took highly-paid positions with Big Tech/Big Data companies, rather than take the risk of starting their own companies, which they certainly had the skills to do. Clearly, big companies can hire the best people, have immense resources and, without question, have developed tremendously cool things.

But here's where it starts getting tricky. The size of those companies, and the number of pies they have fingers in, can lead to problems. When Big Tech/Big Data develops a new audio/video product is it to deliver the best possible sound and picture quality at its price point, or is it to distribute as many data-harvesting machines as possible? The crucial point is that the latter is certainly more profitable to them than the former. In other words, their motives may not be as pure as audio/video purists would like.

And in its pursuit of its possibly impure goals, does Big Tech/Big Data stifle true audio/video innovation? Here is my shocking answer: We've reached a plateau of sound and picture quality. It's digital, the pipes are pretty fat, and there's no sense in adding bits for the sake of adding bits. The sound and picture quality is pretty darn good, and arguably good enough for most people. Don't get me wrong – traditional audio/video companies will continue to make excellent TVs, receivers, and loudspeakers and we welcome that. But that kind of traditional innovation mainly incrementally improves sound and picture quality. That 100-year business model isn't what will create the Next Big Thing. For that we'll need another kind of innovation – big innovation – that only big companies can undertake.

Why do I say that? Because the only kinds of innovation that will truly raise the bar will entail technology that is so sophisticated that only the biggest companies will have pockets deep enough to fund the venture and assume the risk of failure, whether for technical or marketing reasons. And the only companies big enough to undertake the next generations of innovation are the Big Tech/Big Data companies.

Look at it this way: by accepting a degree of noncompetitiveness, by agreeing to work with monopolies, by forfeiting our privacy, we are funding the next generation of audio and video excellence. My crystal ball isn't clear enough to see what the next generation will bring, but I am sure that it won't come from a guy in his garage. Rather, it will come from big office buildings filled with bright engineers – probably working for Google.

I can already hear your response: Jiminy Christmas! This nutcase wants us to accept Satan as our Lord. My response is: If we want cool new products, do we have a choice?

CG's picture

History is on your side on this one, to a large degree.

How many of the innovations that we enjoy the descendants of today were created by researchers at Bell Labs? The BBC? Both of those were essentially monopolies. They had the money and motivation to invest resources on fundamental research that occasionally yielded technology that we all use today.

One difference now is that all the behemoths you allude to are publicly traded companies. Wall Street usually does not reward a company spending money on something that doesn't yield large short term possibilities. Basic research doesn't fit into that category. A company like Alphabet may be publicly traded, but much of the voting power for the stockholders sits in the hands of a couple. So, they can call the shots. That's kind of unusual.

Along those same lines, most people are not interested in the long haul and aren't willing to do what the likes of Hewlett and Packard did. Besides, have you looked at rent for a garage these days?

Really interesting topic and thoughts - thanks very much!

jeffhenning's picture

AT&T, Bell Labs parent company, was not considered a monopoly then to now. They were treated as a utility as were all phone companies. Did they do underhanded things to keep it like that for as long a possible? Absolutely. As time & tech changed, AT&T, which was one of dozens of phone carriers, but the largest by a stretch, got broken up.

AT&T was making so much money that the patents for the laser, Unix OS and transistor were made free and for public use by anyone. Imagine what they could have made from licensing those inventions. And, then, the guys who found the dying energy from the Big Bang also worked at Bell Labs. And won Nobel Prizes.

The BBC, can't be considered a monopoly either since it's a government agency (or was). Broadcasting in the UK started opening up to private companies in the late 60's/early 70's.

I wouldn't trust any of the tech companies mentioned further than I can spit them.

Also, I think that their short attention spans only allow them to consider products they can make a killing on. That most likely disqualifies any products that would get reviews here or any serious A/V magazine.

A cheap hunk of plastic that costs $20 to manufacture that can be marketed for $200? That's their style. Also, a free brain implant is, I'm sure, something they want to get into so you never need a screen or speakers. Then, your dreams will have advertisements.

I think you may be underestimating how big some of the traditional A/V companies still are and overestimating how "innovative" big tech is in the consumer products space.

John_Werner's picture

I read your informed take with interest. What I get is the next shift in home entertainment/Hi-Fi/A-V won't be from a dude like Henry Kloss for instance. It will come from a melding of minds subjected to a huge corporation's deep pockets. Check me here, but I fear something vital has been lost.