HOLT UNCENSORED #119
by Pat Holt
Tuesday, January 11, 2000 :
THAT AOL/TIME WARNER DEAL LETTERS
THE OLD WAY AND THE NEW WAY
THE NEW WAY APPLIED: 'NATURAL CAPITALISM'
THAT AOL/TIME WARNER DEAL
Criminey, did a shiver run up your spine when you saw the headlines about America Online buying Time Warner last night?
"Analysts love it," said the San Francisco Examiner, "but experts see too much concentration of media power." No shinola.
Every time this happens, I always wonder how people behind the scenes think up such scenarios. After all, one power play after another, all of it leading to world domination, isn't the point to life, is it? Doesn't AOL founder Steve Case want to improve existing systems for his millions of customers before "adding on," so to speak? Wouldn't Time Warner like to . . . well, publish better books, for instance? Or maybe read one or two?
Or are these guys so much like Bertelsmann and Barnes & Noble and Amazon.com and Microsoft and Donald Trump/Rupert Murdoch that the power of the deal - "the biggest ever merger" - compelled them to hurry up and make headlines before, say, the proposed MCI-Sprint deal ($122 billion) or the German Mannesmann -Vodafone ($150 billion) steal their thunder?
"By joining forces with Time Warner, we will fundamentally change the way people get information, communicate with others, buy products and are entertained," Case said.
Oh, my stars, forget shivers; this is across-the-board terrifying. The press is already distrusted for its obeisance to the giant conglomerate forces that own it. The book industry is in a complete mess because corporate ownership cares little about its "product lines" of books in its efforts to make shareholders happy.
Meanwhile, the things that EVERYBODY AGREES really count in American life - the importance of competition, the protections of the First Amendment, the quality of literature - not only take a back seat to this unbelievably FATCAT deal, they're going to get buried in the erosion of even worse mergers to come.
"I think the rally among Internets and entertainment firms [on the stock market] is an indication that those industries are going to see more mergers in the future," an analyst told Reuters. A person could gag at the prospect. Once again, more and more decisions about books and ideas that are "allowed" free exchange are being made by fewer and fewer people. That is not good news for any democracy.
The big question now, I think, is whether the huge revolution in communication among millions and soon billions of people on the World Wide Web (see below) is silently being displaced at every moment by the continuing megamergers of corporations like AOL and Time Warner.
If so, for all we'd like to think the new freedoms of the Internet provide, we're all a bunch of Patsys (hey!) buying in to such manipulations as zBubbles, a service from Amazon.com that helps customers compare prices, while at the same time sucking information about customer behavior on the Web that could be used for . . . other purposes.
But first, let's take a look at the bright side:
THE OLD WAY AND THE NEW WAY
I know I tend to make perhaps too many analogies to the Internet, but watching the way every country on Earth responded to 1999's passage into the 21st century - not with bombs or hackers or looters running wild but a sense of calm and actual peace on Earth spreading across the landscape - seemed to mirror the idea that from now on, there will be an Old Way and New Way to approach life in general (and the book biz in specific). In the Old Way, when we talked about marketing to people in large numbers, we were accustomed to thinking in terms of the lowest common denominator - in other words, the larger the crowd, the lower the standard of quality or intelligence.
In the New Way, the Internet offers one of the rare benefits of the population explosion: The numbers of people are huge, yet because every single special-interest group can find (or create) its own community on the Web, everyone engaged with that community experiences a new kind of trust with everyone else.
We want to contribute to the ongoing discussion that will benefit all and to raise the standards because we can see, right there on our screen, how the collective wisdom of many different people works toward a like goal.
So it was thrilling on New Year's Eve to watch the Global Village revealed country by country and midnight by midnight right there on the (TV) screen, as if a collective wisdom of the world is taking shape through the electronic connection of many minuscule parts.
The once impossible goal of the 21st century (to make the planet inhabitable for all species forever) no longer feels lost because now we have become accountable to each other right down to the smallest message that pops up on your email.
The great irony to me is that the New Way is really an ancient way of community made possible by new technology. The bridge between old and new has been the local library and independent bookstores that have historically provided access to a free exchange of ideas through literature and art.
Now if only we can use this new advance in communication to clean up the planet in some revolutionary way.
THE NEW WAY APPLIED
'NATURAL CAPITALISM: Creating the Next Industrial Revolution' by Paul Hawken, Amory Lovins and L. Hunter Lovins (Little, Brown; 396 pages; $26.95)
If you think all we have to "look forward" to in the new milennium is global warming, acid rain, pollutants, ozone depletion, oil dependency, overcrowding, food shortages, loss of natural resources and multinational conglomerates ripping off consumers and their own workers alike, step into the nearest independent bookstore (chains and online retailers are missing this book in a big way!) and take a gander at the hugely important and accessible "Natural Capitalism."
It's hard to describe the flood of relief (and, granted, instant suspicion) that surges through the body when one sees what the authors envision as utterly possible - even probable - in the new century.
From Page One on they invite us to imagine cities that are "peaceful and serene because cars and buses are whisper quiet, vehicles exhaust only water vapor, and parks and greenways have replaced unneeded urban freeways. OPEC has ceased to function . . . Involuntary unemployment no longer exists, and income taxes have largely been eliminated."
In this not-so-futuristic world, the authors say, even smaller houses "can pay part of their mortgage costs by the energy they produce; there are few if any active landfills; worldwide forest cover is increasing; dams are being dismantled; atmospheric CO2 levels are decreasing for the first time in 200 years; and effluent water leaving factories is cleaner than the water coming into them."
All of this happens because we have simply changed our minds, these authors say. We see that waste of natural and human resources has overtaken the old indices of economic abundance. We have learned our lesson well about ecology and realize that the Earth's 3.8-billion-year store of natural capital (water, minerals, oil, trees, fish, soil, air) will nearly be gone by the end of the 21st century.
So this is the story of how a world population that has already exploded (and will double again in next century) will use "radically less material and energy" while building an economy that "can free up resources, reduce taxes on personal income, increase per-capita spending on social ills (while simultaneously reducing those ills) and begin to restore the damaged environment of the Earth."
We can do this NOT by by pretending technology will save us (hydroponics will NOT replace farms, for example) but by seeking ways to make natural resources (energy, metals, water, forests) "work five, ten, even one hundred times harder than they do today," for starters.
At work already are systems that eliminate "the very idea of waste" through a "fundamental change in the relationship between producer and consumer, a shift from an economy of goods and purchases to one of service and flow."
For example, the question of addressing the enormous waste created by a disposable economy can be considered anew (and this is just a sliver of one idea) by an "industrial model that is now gradually taking shape" in Europe after a decade of experimentation in which "consumers obtain services by leasing or renting goods rather than buying them outright."
Just as an office may lease a copying machine that is repaired or replaced by the company owning the maching, so, too, do consumers lease a washing machine, VCR, refrigerator or car from companies that are responsible to customers AND to the environment "for the waste with all its attendant problems of toxicity, resource overuse, worker safety" and the like.
When the company succeeds not from the sale of goods but from "the continuous [provision] of quality, utility and performance," it finds new ways for "constant reuse of materials" and seeks new products that "can be deconstructed and completely reincorporated into 'technical nutrient' cycles of industry."
If that sounds like a lot of pie in the sky, read on: In thousands of examples the authors show that "revolutionary leaps in design and technology" are already changing the way we live and think. Wonder why electric cars never caught on? Well, they were too big, too heavy and too wasteful, the authors explain. Emerging this century for popular use are lighter, stronger and hugely more efficient "hypercars" that run on a hybrid of fuel and electricity.
Watch also for appliances with Energy Star labels, so efficient they'll "save the typical U.S. household about 30 percent of its energy bills with a 30 percent internal rate of returrn. Over the next 15 years, full adoption of Energy Star appliances could save American households as much as $100 billion."
Small changes in urban design can also make a huge difference, the authors contend. Simply by using lighter-colored paving and building surfaces, the city of Los Angeles could cool itself "by about 6 degrees Fahrenheit, a temperature drop that would cut the city's cooling loads by about 20 percent and smog by about 12 percent, saving more than a half billion dollars per year."
The idea of "re-creating community" has already become a proven value. In the 1970s, "Portland, Oregon, estimated it could cut gasoline consumption 5 percent merely by resuscitating the concept of the neighborhood grocery store." Deliberate "clustering" of housing, jobs and shopping will again provide "sensible land use" that correct the "costly distortions [of] unchecked urban sprawl."
Of course, I say at the beginning of this review that "instant suspicion" hits the nerve as well, because isn't this the kind of "utopia" that demands people live like robots so everything remains a bit TOO sanitized and ordered?
That's the question critical readers will want to keep in mind throughout "Natural Capitalism." Remember when the use of cigarettes and seat belts and motorcycle helmets were a matter of choice for each individual? Eventually, the costs to the larger population in terms of health and safety proved too much when people thought about the big picture (not all people, certainly). Today we can look back and see that habits built up over many generations could change within the space of a few years).
"Our goal" for the environment now - and for crime, health, the economy, food and safety issues - "should be to solve or avoid each problem in a way that also addresses many more simultaneously - without creating new ones." Such a simple idea. The answers, while sometimes too simplified here, are fascinating to discover in "Natural Capitalism."
Dear Holt Uncensored:
Up here in the snowy wasteland of Canada, we have an interesting parallel with the Time's chosing Amazon.com founder Jeff Bezos its "Person of the Year."
One of our two national newspapers, The Globe and Mail, recently named Larry Stevenson (think of a Canadian cross between Len Riggio and Jeff Bezos) Man of the Year, though it was unclear what the criteria were. Stevenson is Riggio-esque in that his Chapters stores are very B&N, but his online style owes more to Bezos (he's just started selling gardening equipment).
What went unsaid in the article was that The Globe and Mail is in bed with Stevenson's bookstore chain in a similar arrangement to that of The New York Times and B&N. Indeed, the Man of the Year piece was reprinted on the ChaptersGlobe.com Web site. I emailed The Globe a letter pointing out this oversight on their part, but a week later have not heard from them. Perhaps they're busy.
University of Toronto Bookstore
Dear Holt Uncensored:
About the proper use of gift certificates, from chains or otherwise: Civil code section 1749.5 of the laws of California states "...any gift certificate shall be redeemed for cash." Not partially used and redeemed. Just redeemed! Also, according to the same law, no GC may contain an expiration date. If there is an expiration date on the GC, it may still be used past the date in California. Any GC can be exchanged for cash equal to the value of the certificate. There are three exceptions: GC issued for food; GC given as an award or promotion without money or anything else of value being exchanged by the consumer; or gift certificates sold below face value or volume discount to employers or to nonprofit or charitable organizations for fundraising purposes, if the expiration date on those GC's is not more than 30 days after the date of sale.
I'm lifting this fascinating information from an article in this week's Mendocino (Calif.) Beacon, quoting the local District Attorney and his Chief Deputy.
So go to Barnes and Ignoble and cash 'em in!
Dear Holt Uncensored:
If you rip up an already paid for gift certificate, you're just giving borders, etc. the cash straight out, without making them provide anything in return. This is supposed to hurt them? Buy the books and donate them to a library or a prison reading program or an independent bookstore.
Dear Holt Uncensored:
FYI, Borders now offers electronic return gift cards for returns purchased by gift certificate, electronic gift cards, or returns without a receipt. In other words, purchasing a book with a gift card in hopes of returning it to receive a store credit, which may then be tendered for cash if one yelled loud enough is no longer a viable option. Instead you get another plastic card, also not redeemable for cash, that expires 6 months from the date issued. The only way to override this is at the corporate level. It has always been Borders policy on the paper certificates to issue another certificate, unless the cash remainder was less than $5.
If I may make another suggestion, if it pains your reader so much to use the certificate for himself, why not purchase some books and donate them to a local charitable organization? Most public hospitals, halfway houses, even public schools would greatly appreciate a donation of new books, even though they were purchased at discount prices at a chain bookstore.
Dear Holt Uncensored:
Re: Amazon prices, I was surprised to find a really offbeat book written about the late Lubavitcher rebbe on the Amazon site. The price was $25 on the offchance that they could find a copy. I phoned Bob and Bob, the Jewish gift and book store in Palo Alto, who had the same book for $20 available immediately. The strange thing is Bob and Bob notoriously marks up the unpriced, maverick books. So, this was truly a find--and a revelation to me about Amazon and their weird pricing.
Dear Holt Uncensored:
[Re: Amazon's use of 1-Click patent for possible monopoly purposes]:
1) The patent craze is more virulent than most people realize to the point that everything from genes to surgical procedures to Dutch sales on the Internet have ALREADY been granted patents. The government is overwhelmed with patents it can't effectively evaluate. When you keep in mind that a patent is basically a government-sanctioned monopoly, the absurdity of patenting processes becomes obvious. How will you feel if your doctor has to pay a royalty to another hospital to make an appendectomy incision? Or if he or she has to make calls to find out first if a royalty is due? Think this is an exaggeration? Think again. I am working with attorneys who are grappling with precisely these kinds of issues. The winners in the patent game, which virtually everyone believes cannot continue, are attorneys. This is not just an Internet issue.
2) Re: Microsoft and Barnes & Noble: Microsoft is obviously strategizing to become the VHS version while hoping Adobe becomes the Beta version for access to printed material on computers (How many people out there in videoland know that Beta lost not for any technical reason but because they wouldn't show pornography?). The main thing to keep in mind here is that winners often aren't those with the best product. That's how we ended up with QWERTY keyboards and Windows. Diversity and competition in every area generally benefit consumers in the end.
3) Notice that in all the recent roundups in Publisher's Weekly and every other publication, there are numerous articles about how the publishing pie will be cut up by ebook manufacturers, Software manufacturers, Distributors, Booksellers (mostly the online ones), Publishers, etc. Who is left out? The coal miners of the industry who are producing this great bonanza for everyone else in the first place-- the writers.
Lots of talk about how everyone is going to make millions producing the modern equivalent of coal fired trains, ships and furnaces to run the country. But no one talking about how the actual producers of the information that runs this great new information age will earn a living wage or what their piece of the pie will look like. There will be tremendous pressure from publishers toward electronic publishing to cut production costs. Has anyone read anything about how this great savings is going to be passed on to writers?
I was recently sent a contract from a New York publisher that stated the author would receive .04% of the cover cost for every electronic book sold. Am I wrong or does that mean more than 75,000 copies of a trade-paper-priced book must be sold for the author to make $30,000 (less 15% to the agent) a year providing said author can research and write an original book every year (and the publisher is willing to publish it)? WOW! What abundance! Take a guess at what percent of writers sell that many copies of a hardcover or trade paperback book each year. Actual writing, like hand-selling, is a labor intensive job that isn't at the top of the pay scale. And apparently neither is at the top of anyone's list of participants in the new Internet millenium.
Dear Holt Uncensored:
With regard to B&N going into partnership with iUniverse and used book sellers, you should check out the B&N used book site. They grossly overprice used books and do not identify the bookseller/partner which, in many cases, is available on other sites such as ABE books.com. It really is a rip-off. The customer does not really know what is being bought from whom.
David L. Meth