[FoRK] Why has the Internet changed so little?

Eugen Leitl eugen at leitl.org
Tue Mar 6 08:56:31 PST 2012


(I don't know what the internet is -- he probably means the Internet)

http://www.opendemocracy.net/james-curran/why-has-internet-changed-so-little

Why has the Internet changed so little?

James Curran, 4 March 2012

The Internet Age was meant to change everything - internationalism, commerce,
journalism, government - all would be transformed, made equal and boundless
by the click. It's time to admit this has simply failed to happen, and what
is more interesting than the bad forecasting is the reason that they seemed
so tempting in the first place. (This is the text of a lecture delivered in
Sydney in December 2011)

About the author

James Curran is professor of communications at Goldsmiths College, University
of London, and External Editor of the Media and the Net themes at
openDemocracy.

In the 1990s, leading experts, politicians, public officials, business
leaders and journalists predicted that the internet would transform the
world.  The internet would revolutionise the organisation of business, and
lead to a surge of prosperity. It would inaugurate a new era of cultural
democracy in which sovereign users – later dubbed 'prosumers' – would call
the shots, and the old media leviathans would decay and die. It would
rejuvenate democracy - in some versions by enabling direct e-government
through popular referendums. All over the world, the weak and marginal would
be empowered, leading to the fall of autocrats and the reordering of power
relations. More generally, the global medium of the internet would shrink the
universe, promote dialogue between nations, and foster global understanding.
In brief, the internet would be an unstoppable force: like the invention of
print and gunpowder, it would change society permanently and irrevocably.

These arguments were mostly inferences derived from the internet’s
technology. It was assumed that the distinctive technological attributes of
the internet – its interactivity, global reach, cheapness, speed, networking
facility, storage capacity, and alleged uncontrollability – would change the
world beyond all recognition. Underlying these predictions was the assumption
that the internet’s technology would reconfigure all environments.
Internet-centrism, a belief that the internet is the alpha and omega of
technologies, an agency that overrides all obstacles, and has the power to
determine outcomes, lies at the heart of most of these prophecies.

But as pronouncements about the internet’s positive impact became more
concrete and assured, there developed a backlash.  A straw in the wind was
the apostasy of MIT guru Sherry Turkle. In 1995, she celebrated anonymous
online encounters between people assuming false identities on the grounds
that they could extend imaginative insight into the ‘other’, and forge more
emancipated sensibilities (Turkle 1995). Sixteen years later, she changed
tack. Online communication, she lamented in 2011, could be shallow and
addictive, and get in the way of developing richer, more fulfilling
interpersonal relationships (Turkle 2011). Another apostate was the Belarus
activist, Evgeny Morozov, who disavowed his former belief that the internet
would undermine authoritarian regimes.  

There were also others whose initial, more guarded hope in the emancipatory
power of the internet turned to outright scepticism. Typical of this latter
group is John Foster and Robert McChesney who wrote in 2011 that ‘the
enormous potential of the Internet …  has vaporized in a couple of decades’.
We are thus faced with a baffling contradiction of testimony. Most informed
commentators view the internet as a transforming technology. Their
predictions are now seemingly being confirmed by events, as in the Middle
East. However, there is an unsettling minority who confidently decry the
majority view as a delusion.

Who - and what - is right?

Global Understanding.

During the 1990s, there was a broad consensus that the internet would promote
greater global understanding. ‘The internet’, declared the Republican
politician Vern Ehlers (1995), ‘will create a community of informed,
interacting, and tolerant world citizens’. The internet, concurred Bulashova
and Cole (1995), offers ‘a tremendous “peace dividend” resulting from
improved communications with and improved knowledge of other people,
countries and cultures’.  One key reason for this, argues the writer Harley
Hahn (1993), is not just that the internet is a global medium but also that
it offers greater opportunity for ordinary people to communicate with each
other than do traditional media. ‘I see the Net’, he concludes, ‘as being our
best hope…. for the world finally starting to become a global community and
everybody just getting along with everyone else’. Another reason for
optimism, according to numerous commentators such as Frances Cairncross, is
that the internet is less subject to national state censorship than
traditional media, and is thus better able to host a free, unconstrained
global discourse between citizens. These themes – the internet’s
international scale, user participation, and freedom – continued to be
invoked in the 2000s as grounds for thinking that the internet is bonding the
world in growing amity.

The central weakness of all this theorising is that it extrapolates
consequences from the technology of the internet. What this overlooks is the
multiple ways in which the wider context of society limits – and even negates
- the contribution that the internet makes to global harmony and
understanding.

First, the world is very unequal, and this limits participation in an
internet-mediated global dialogue. The richest 2 per cent of adults in the
world own more than half of global household wealth, with the richest 1 per
cent of adults alone possessing 40 per cent of global assets in 2000 (Davies
et al 2006). Adults making up the bottom half of the world population own
barely 1 per cent of global wealth. Davies et al. note that wealth is
concentrated in North America, Europe and high income Asia-Pacific countries;
people in these countries hold almost 90 per cent of total world wealth.
These rich countries have very high internet access: 77 per cent of North
Americans have internet access, 61 per cent in Oceania / Australia and 58 per
cent of Europeans (Internet World Stats, 2010a). There are many developing
countries that have internet penetration rates that are less than 1/100 of
those in wealthy countries (Wunnava and Leiter, 2009: 413). This skews the
composition of the internet community. The total proportion of population in
2011 who are internet users is 30 per cent (Internet World Stats 2011a). So
if the internet is bringing the world together, it is primarily the affluent
who are being brought into communion with each other. Most of the world’s
poor are not part of this magic circle of ‘mutual understanding’.

Second, the world is divided by language. Most people can only speak one
language, and so cannot comprehend literally what foreigners say. The nearest
thing to a shared online language is English which, according to the ITU,
only 15% of the world’s population understands. The role of the internet in
bringing people together is thus hampered by mutual incomprehension.

Third, language is a medium of power. Those writing or speaking in English
can reach, in relative terms, a large global public. By contrast, those
conversing in Arabic are only able to communicate potentially to 3 per cent
of internet users (Internet World Stats, 2010b); and those communicating in
Marathi potentially reach a percentage of internet users so small as to be
measurable only in decimal points. Who gets to be heard online in the global
community often depends on their mother tongue.

Fourth, the world is divided by conflicts of interest and values. These can
find expression in websites that foment – rather than assuage – animosity.
Thus, there has been a proliferation of race hate websites. The Raymond
Franklin list of such sites runs to 170 pages. Some of these sites have a
large base: Stormfront, one of the earliest white-only US websites, had
52,566 active users in 2005 (Daniels 2008: 134).

Detailed studies of hate sites conclude that they maintain and extend racial
hatred in a variety of ways (Back 2011; Perry and Olsson 2009; Gerstenfeld et
al. 2003). They can foster a sense of collective identity, reassuring
militant racists that they are not alone. Some foster a sense of community
not only through features like an ‘Aryan Dating Page’ but also through more
conventional content such as forums discussing health, fitness and
homemaking. The more sophisticated are adept at targeting children and young
people by offering, for example, online games and practical help. Race hate
groups increasingly use the internet to develop international networks of
support in which ideas and information are shared. And of course their staple
content is designed to promote fear and hatred, typified by warnings of the
‘demographic time bomb’ of alien procreation in their midst. These ‘white
fortresses’ of cyberspace promote not just disharmony. There is a
relationship between racist discourse and racist violence (Akdeniz 2009).

This illustrates one central point: the internet can spew out hatred, foster
misunderstanding and perpetuate animosity. Because the internet is both
international and interactive, this does not mean necessarily that it
encourages only ‘sweetness and light’.

Fifth, national and localist cultures are still strongly embedded in much of
society (in contrast to the cosmopolitan temper of academic life). These
cultures are supported by the organization and values of traditional news
media throughout the world. Thus, news media tend to concentrate on domestic
news. For example, in 2007 American network TV news devoted only 20% of its
time to foreign news, while even its counterparts in two internationalist
Nordic countries allocated just 30% (Curran et al 2009). Insular news values
also shape the content of the press in these and other countries (Curran et
al 2010: Aalberg and Curran 2011). Above all, nation-centered cultures shape
the content of internet-mediated news. A study of the leading news website in
nine nations, across four continents, in 2010 found that these publish mainly
national news, and are only marginally more internationalist than leading
television news programmes.

Sixth, national governments seek everywhere to manage or control their media
systems. In particular, authoritarian regimes have developed new ways of
censoring online communication, principally through licensing internet
service providers and websites, through filtering out URLs on an official
blacklist, through software that monitors internet content and use, and
through creating a general climate intimidation and fear. As a consequence,
global internet discourse is distorted by state intimidation and censorship.

Seventh, people who actively participate in politics can be untypical of the
general population, and this can influence the nature of online discourse.
Smith et al 2009 discovered that, in the US, the advantaged tend to be the
most active in politics, and this is reproduced in online activism.
Similarly, Di Gennaro and Dutton(2006) found that in Britain the politically
active tend to be drawn from the higher socio-economic groups, the more
highly educated and older people. Those engaged in political online
participation were even more skewed towards the affluent and highly educated,
though they were more often younger. Di Gennaro and Dutton’s conclusion is
that the internet seems to be promoting political exclusion rather than
inclusion.

In short, the idea that cyberspace is a free, open space where people from
different backgrounds and nations can commune with each other, and build a
more deliberative, tolerant and empowered world overlooks a number of things.
The world is unequal and mutually uncomprehending (in a literal sense); it is
torn asunder by conflicting values and interests; it is subdivided by deeply
embedded national and local cultures (and other nodes of identity such as
religion and ethnicity); and some countries are ruled by authoritarian
regimes. These different aspects of the real world penetrate cyberspace
producing a ruined tower of Babel with multiple languages, hate websites,
nationalist discourses, censored speech and over-representation of the
advantaged.

Yet there are forces of a different kind influencing the development of
society. Increasing migration, cheap travel, mass tourism, global market
integration and the globalization of entertainment have encouraged an
increased sense of transnational connection. Some of these developments find
support in the internet. YouTube showcases shared experience, music and
humour from around the world that promotes a ‘we-feeling’. Here is u an
excerpt from YouTube that is funny in any language, overcoming the deadening
effect of subtitles.

The internet also facilitates the rapid global distribution of arresting
images that strengthen a sense of solidarity with beleaguered groups, whether
these are earthquake victims or protesters facing repression in distant
lands. The internet has the potential to assist the building of a more
cohesive, understanding and fairer world. But the mainspring of change will
come from society, not the microchip.

The uprisings in the Middle East are in part a testimony to the power of the
internet, mobile phone and satellite TV to mobilize dissent, and to win
support from outside the Middle East. That said, these uprisings also have
deep underlying causes: disappointed expectations following rapid educational
advance, high youth unemployment, rising food prices, unpopular neo-liberal
policies, resentment against crony capitalism and authoritarian rule, and in
some cases tribal and religious enmity. These uprisings were prefigured by
strikes and protests in Egypt, Tunisia and elsewhere extending back to the
1980s.

Indeed, what is striking is that out of the six actively ‘insurgent’
countries (Tunisia, Egypt, Libya, Bahraain, Syria and Yemen) only Bahrain
features in the top five rankings of Arab countries for Facebook penetration
and internet use. This underlines the point that it was not communications
technology that caused these uprisings, but deep-seated societal factors,
since other Arab countries with much higher internet penetrations rates like
Saudi Arabia and the UAE did not turn on their dictators.

Journalism Renaissance

Let us turn now to predictions about how the internet would affect
journalism. The internet, according to Rupert Murdoch, is democratising
journalism.  ‘Power is moving away’, he declares, ‘from the old elite in our
industry – the editors, the chief executives and, let’s face it, the
proprietors’, and is being transferred to bloggers, social networks and
consumers downloading from the web (Murdoch 2006). This view is echoed by the
leading British conservative blogger, Guido Fawkes, who proclaimed that ‘the
days of media conglomerates determining the news in a top-down Fordist
fashion are over... ‘  The radical academic lawyer, Yochai Benkler (2006),
concurs, arguing that a monopolistic industrial model of journalism is giving
way to a pluralistic networked model based on profit and non-profit,
individual and organised journalistic practices.  The radical press
historian, John Nerone , goes further, pronouncing the ancient regime to be a
thing of the past. ‘The biggest thing to lament about the death of the old
order [of journalism]’, he chortles, ‘is that it is not there for us to piss
on any more’ (Nerone 2009: 355). Numerous commentators, drawn from the left
as well as the right, and including news industry leaders, citizen
journalists and academic experts, have reached the same conclusion: the
internet is bringing to an end the era of media moguls and conglomerate
control of journalism.

The second related theme of this euphoric commentary is that the internet
will lead to the reinvention of journalism in a better form. The internet
will be ‘journalism’s ultimate liberation’, according to Philip Elmer-Dewitt
(1994) because ‘anyone with a computer and a modem can be his own reporter,
editor and publisher – spreading news and views to millions of readers around
the world’. One version of this vision sees traditional media being largely
displaced by citizen journalists. An alternative version sees professional
journalists working in tandem with enthusiastic volunteers to produce a
reinvigorated form of journalism (e.g. Beckett 2008; Deuze 2009).

In brief, we are told that the internet will bury the old order of
journalism, and give rise to its reinvention in a better form. The first
reason for questioning this is that television is still the dominant news
source. Thus in all six countries - Britain, France, Germany, Italy, United
States and Japan – surveyed in 2010, more respondents said that they relied
on television rather than the internet as the main source of news about their
country (Ofcom 2010b).

More importantly, leading news organisations have colonised cyberspace. To
pre-empt competition, they set up satellite news websites. These quickly
became dominant because they were heavily cross-subsidised; and exploited the
newsgathering resources and established reputations of their powerful parent
companies. Thus, Pew (2011) found that in 2010 80% of the internet traffic to
news and information sites is concentrated on the top 7% of sites. The
majority of these top sites (67%) are controlled by dominant news
organisations from the pre-internet era. Another 13% are accounted for by
content aggregators.  Only 14% of these top sites are online-only operations
that produce mostly original reportorial content. 

In other words, the rise of the internet has not undermined leading news
organisations. On the contrary, it has enabled them to extend their hegemony
across technologies. In concrete terms, this means that the ten most visited
newspaper websites in the world in 2010/1 included only one online
independent (Huffington Post): the remaining nine were leading news
organisations, like the New York Times and Guardian,  from the pre-internet
era (Guardian 2011). The top ten news websites in the US in March 2011
included only one online independent (again the Huffington Post): the
remainder were four leading TV organisations, three leading newspapers and
two content aggregators (Moos 2011). In Britain, there was no online
independent among the top ten news sites in 2011: all the top spots were
filled by leading television and newspaper organisations and content
aggregators (Nielsen 2011).

Content aggregators do not usually give prominence to alternative news
sources.  Thus Joanna Redden and Tamara Witschge (2010) examined Google’s and
Yahoo’s listing of content, over time, in relation to five major public
affairs issues, only to find that ‘no alternative news sites were returned in
the first page of search results’. 

Nor has the internet connected the legion of bloggers to a mass audience. In
Britain, for instance, 79 per cent of internet users in 2008 had not read a
single blog during the previous three months (ONS 2008). Most bloggers lack
the time to investigate stories. They are amateurs, who need their regular
day job to pay their way (Couldry 2010). This reduces their ability to build
a large audience.

But if the old order is still often in control, has journalism got better?
One consequence of the rise of the internet has been to draw advertising away
from old media and, to a lesser extent, from news production in general. The
total number of journalists employed in the US declined by 26% between 2000
and 2009 (Pew 2010), while those employed in the UK’s ‘mainstream journalism
corps’ shrunk by between 27% and 33% between 2001 and 2010 (Nel 2010). News
budgets have also been cut, with the result that even the large metropolitan
dailies and television network news in the US have been forced to economise
on time-consuming investigative journalism and high-cost foreign journalism. 

A major study of British journalism also concludes that a more profound and
pervasive process of deterioration is taking place in marked contrast to
hyped predictions of regeneration (Fenton 2010; Lee-Wright et al. 2011). It
found that fewer journalists are being expected to produce more content, as a
consequence of newsroom redundancies, the integration of online and offline
news production, and the need to update stories in a 24-hour news cycle. This
is encouraging journalists to rely more on tried-and-tested news sources as a
way of boosting output.   It is also fostering the lifting of stories from
rivals’ websites as a way of increasing productivity, even to the extent of
using the same news frames, quotes and pictures.  Depleted resources are
contributing in general to increased reliance on scissors-and-paste,
deskbound journalism. To judge from an Argentinean study, a very similar
trend towards imitative, office-centred journalism is also taking place
elsewhere (Boczkowski 2009).

While some journalistic green shoots have appeared, they have been mostly
sickly. Independent online news ventures have found it difficult to build a
subscription base because the public has become accustomed to having free web
content. And because these online independents have generally attracted small
audiences, they have low advertising returns.   A 2009 Pew Research Center
study in the US concluded that ‘...despite enthusiasm and good work, few if
any of these are profitable or even self-financing”. Similarly, a 2009
Columbia Journalism Review study concluded that “it is unlikely that any but
the smallest of these [web-based] news organisations can be supported
primarily by existing online revenue” (Downie and Schudson 2010).  Often with
skeletal resources, their most pressing priority has usually been to stay
alive. 

In brief, the dominant news organisations have entrenched their ascendancy
because they have gained a commanding position in both the offline and online
production and consumption of news. In addition, the rise of the internet as
an advertising medium has led to budget cuts, increased time pressure on
journalists and, sometimes, falling quality in mainstream journalism. This
has not been offset by new independent news start-ups because they have been
mostly too small and with too little firepower to ride to the rescue. 

This needs to be qualified by recognising that there are geographical
variations. Thus, in South Korea the citizen newspaper website, OhmyNews with
a core staff supported by a large number of volunteer reporters, built a mass
audience in the early 2000s.  However, the website’s take-off was sustained
by a generational protest against cultural conformism, and a political
protest against government-corporate cronyism.  When the wind behind the
website subsided later in the decade, OhmyNews ran into difficulties. And its
attempt to establish a similar venture in the less fertile soil of Japan was
a flop.

Economic Transformation

Between 1995 and 2000, it was widely claimed that the internet would generate
wealth and prosperity for all. Typifying this prediction was a long article
in Wired, the bible of the American internet community, written by the
magazine’s editor, Kevin Kelly in 1999. Its title and lead-in set the
article’s tone: ‘The Roaring Zeros: The good news is, you’ll be a millionaire
soon. The bad news is, so will everybody else’. This good news was widely
reported across both sides of the Atlantic, though in not quite such ecstatic
terms. It was underpinned by seemingly authoritative reports that in the
words of Business Week: ‘We have entered the Age of the Internet’…….. The
result: an explosion of economic and productivity growth first in the US,
with the rest of the world soon to follow’ (emphasis added).

Central to these predictions is the idea that the internet and digital
communication is giving rise to the ‘New Economy’. While this concept is
amorphous and mutable, it usually invokes certain themes. The internet
provides, we are told, a new, more efficient means of connecting suppliers,
producers and consumers that is increasing productivity and growth. The
internet is a disruptive technology that is generating a Schumpeterian wave
of innovation. And it is leading to the growth of a new information economy
that will replace heavy industry as the main source of wealth in
de-industrialising, western societies.

At the heart of this theorising is a mystical core. This proclaims that the
internet is changing the terms of competition by establishing a level playing
field between corporate giants and new start-ups. The internet is
consequently renewing the dynamism of the market, and unleashing a whirlwind
force of business creativity. By bypassing established retail intermediaries,
the internet is carving out new market opportunities. It is lowering costs,
and enabling low-volume producers to satisfy neglected niche demand in a
global market. The internet also favours, we are informed, horizontal,
flexible network enterprise able to respond rapidly to changes in market
demand unlike heavy-footed, top-down, Fordist, giant corporations.

The concept of the New Economy is often cloaked in specialist language. To
understand its insights, it is essential to learn a new vocabulary: to
distinguish between portal and vortal, to differentiate between internet,
intranet and extranet, to assimilate buzz concepts like ‘click-and-mortar’
and ‘data-warehousing’, and to be familiar with endless acronyms like CRM
(customer relationship management), VAN (value-added network), ERP
(enterprise resource planning), OLTP (online transaction processing), and ETL
(extract, transform and load). To be part of the novitiate who understands
the future, it is first necessary to master a new catechism.

But if this insider language is pushed to one side, it is possible to
formulate certain cautious conclusions. The first is that the internet has
indeed modified the nerve system of the economy, affecting the collection of
data, the interactions between suppliers, producers and consumers, the
configuration of markets, the volume and velocity of global financial
transactions, and the nature of communication within business organisations,
as well as giving rise to major corporations such as Google and Amazon, and
the launch of new products and services. This said, the internet does not
represent a complete rupture with the past since it was preceded by the
widespread corporate use of computers, and by earlier electronic data
interchange systems (like the telex and fax) (Bar and Simard 2002).

The second conclusion is that the internet has not proved to be a geyser of
wealth cascading down on investors and the general public. There was an
enormous increase in the stock market value of internet companies between
1995 and 2000. But in the event, the internet gold mine proved to be made of
fool’s gold. Most dot com start-ups that attracted heavy investment folded
without ever making a profit, in some cases after burning through large
quantities of money in less than two years (Cellan-Jones 2001).  These losses
were so severe that it tipped the US economy into recession in 2001.

In the subsequent period, the internet did not prove to be a fount of wealth.
Thus, a Harvard Business school study, using an employment income approach,
concluded that the advertising-supported internet in America contributed
approximately 2 per cent to GDP, or perhaps 3% if the internet’s indirect
contribution to domestic economic activity is taken into account in
2008(Deighton and Quelch 2009). Similarly, it is estimated by a leading
research team that business to consumer e-commerce in Europe accounted for
1.35% of GDP in 2007 (Eskelsen et al 2009).

The third conclusion is that the internet has not, so far, revolutionised
shopping. Even in countries where online shopping is widespread, it tends to
be concentrated on a limited range of products and services. In 2007, online
sales accounted for 7% of total sales turnover in the UK, and 4% in Europe
(European Commission 2009). But this will almost certainly increase.

The fourth, and much the most important, conclusion is that the internet has
not created a level playing field between small and large enterprise. The
belief that it would was the principal evangelical component of the ‘New
Economy’ thesis, and lay at the heart of its conviction that the internet
would generate a surge of innovation and growth.(6)  This article of faith
did not anticipate the difficulty that small and medium firms would continue
to have in penetrating foreign markets. As it turned out, the usefulness of
the internet as a tool for securing foreign market access was constrained by
language, cultural knowledge, the quality of telecommunications
infrastructures, and foreign computer skills (Chrysostome and Rosson 2004).
More importantly, the New Economy thesis failed to take adequate account of
the continuing economic advantage of corporate size.(7) Large corporations
have bigger budgets, and greater access to capital, than small companies.
They have economies of scale enabling lower unit costs of production;
economies of scope based on the sharing of services and cross-promotion; and
concentrations of expertise and resources that assist them to launch
successful new products and services.  They can seek to undermine
under-resourced competition by temporarily lowering prices, and by exploiting
their marketing and promotional advantage. In addition, they can try and ‘buy
success’ by acquiring promising young companies – the standard strategy of
conglomerates.

This is why, in the internet age, large corporations continue to dominate
leading market sectors, from car manufacture to grocery supermarkets. Indeed,
in the leading economy (US), the number of manufacturing industries, in which
the largest four companies accounted for at least 50% of shipment value,
steadily increased between 1997 and 2007 (Foster et al 2011: chart 1). There
was also a truly remarkable increase between 1997 and 2007, in the market
share of the four largest firms in leading sectors of the US retail
industries (Foster et al. 2001: table 1). To take just two examples,  the big
4 computer and software stores’ share soared from 35% to 73%, while the share
of the big 4 merchandising stores rose from 56% to 73%, during this period.
More generally, the gross profits of the top 200 US corporations as a
percentage of total gross profits in the US economy very sharply increased
between 1995 and 2008 (Foster et al. 2011 chart 3).

In brief, the triumph of the small business in the internet era never
happened because competition remained unequal.  Corporate Goliaths continued
to squash commercial Davids, armed only with a virtual sling and pebble.

Wrap Up

There are other prophecies that I have not had time here to evaluate. But in
conclusion let me make one last point. The reason why so many wide-eyed
predictions about the internet proved to be wrong was because society
influenced the internet more than the other way round

This is not a novel insight. It is one that liberals after 1880 made when
they discovered that the popular press did not become an autonomous
instrument of rational and moral instruction, as they had hoped, but instead
reflected the people who controlled and bought popular newspapers. This
process of disenchantment is brilliantly illuminated by Mark Hampton. It led
more sceptical but better informed commentators to de-capitalise the
‘Newspaper Press’. Perhaps we should do the same in relation to the Internet.

Misunderstanding the Internet, by James Curran, Natalie Fenton and Des
Freedman, published by Routledge will be coming out in March 2012.


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