The Future for Television or Google Wants to Burn Your Remote: More Google Union-Busting

Google Backed Net Coalition’s Anti-Union Dirty Tricks Campaign

Google’s Attack on Unions Means the United Message is Working

This flyer was circulated by the Net Coalition lobby shop in Washington recently.  As you will see it clearly refers to a “host of union thugs” who had the temerity to oppose Net Coalition backer Google and other giant consumer electronics companies.  Who is in the “host of union thugs”?  The American Federation of Musicians, the American Federation of Television and Radio Artists, the Directors Guild of America, the International Alliance of Theatrical and Stage Employees and the Screen Actors Guild.  (Net Coalition is the astroturf lobby group managed by well-known Washington lobbyist  Markham Erickson. Net Coalition includes Google and Wikipedia, and a big sponsor of Politico, home to many Google apologists.  To be complete, when they were caught with this flyer, Net Coalition blamed someone who worked for them instead of manning up.)

Union bashing is the plat du jour in the prix fixe anti-artist crowd these days–the EFF has launched a campaign appealing to union members to abandon their unions.  Or something like that–now where is that National Labor Relations Act, I know it’s around here somewhere.

It is particularly galling that Google is using its EFF surrogate to try to appeal to entertainment industry union members to abandon their unions, while at the same time using its Net Coalition surrogate to bash “union thugs”.  This will come as news to Google, I’m sure, but union officials are largely elected.  Nobody at Google has been elected dogcatcher, all though there are those around the world licking their chops at the thought of any Google executive or surrogate giving politics a try.

We can easily determine why Google wants to create a misinformation campaign around rogue sites legislation–even Google cannot afford to take too many more hits for $500,000,000–the price they paid for advertising illegal drugs to the public including kids–without triggering a stockholder revolt however muted the effect given that Google has stacked the deck against everyone outside of the control group.  Even–or maybe especially–a union pension fund wasn’t able to bring democracy to the board room at Google (See “Bricklayers Union Pension Fund Stock Voting Rights Plan Hits Brick Wall at Google“).  This is what monopoly looks like.

But all indications are that in order for Google to accomplish its plans for Google TV, they are inexorably led to the need to destroy the production unions:  AFTRA/SAG, AFM, DGA, IA and Teamsters.

Even Google’s tech press apologists are already asking why Google got to pay a fine for doing something bad like promoting the importation of controlled substances, when Megavideo’s founder is in prison and may not get out for decades.  Many of these same writers asked a similar question when the Pirate Bay was criminally prosecuted–the Pirate Bay’s statement, “we’re just like Google” was widely reported.  The same counterargument is being used by the operator of the rogue site TVShack who so far has lost his appeal to avoid being extradited from the UK to stand trial in the US for similar charges to Megavideo.

Of course, they ask the question the wrong way, as usual.  The point isn’t that these sites are “just like Google” so they are not guilty, the point is that Google is just like these sites so they all should be treated equally.  And so Google evidently thought it was or it would not have paid its way out of a criminal indictment for aiding and abetting the sale of controlled substances to avoid an indictment that would have found Larry Page standing trial, if not Eric Schmidt.

And you never know where that kind of thing will lead.  But of course, the main reason why these sites are not just like Google is that they are not able to conduct the kind of crony capitalism that Google is so good at.

Why Does Google Hate the Unions?

So speaking of thugs, why would Google have its henchmen start a union busting campaign in the entertainment industry, particularly the television business?

There might be some illumination from this sidebar in the Telegraph’s coverage of Eric Schmidt’s “I am not a crook” speech from Davos 2012 where he laughably denied that Google profited from piracy:

“Nikesh Arora, chief business officer at Google, said that the launch of   internet-enabled TV would have the same effect on broadcasting as the launch of sites such as iTunes had on music.

‘Disaggregation in TV is coming up,’ he said. Mr Arora said that people would use internet television services such as Google TV to decide when and what   to watch. Broadcasters would therefore lose a lot of control on decision making.”

Of course, the comparison to iTunes is completely inapt, and also inept–iTunes gets licenses voluntarily.  Google only does when it is dragged kicking and litigating to the table.

Google TV will further Google’s usual shakedown business model–we will steal from you until you get tired of litigating then you will give us a deal on our terms (YouTube, Google Books, etc.).  As long as Google can characterize these exchanges as “buggy whips” and “disruptive” or “disintermediation”, as opposed to crimes (Ford did not steal the buggy whip, he replaced the horse drawn carriage), then they wrap themselves in the false flag of “innovation” and can foist a narrative of Hollywood vs. Innovation on eager journalists.  (See “What’s Innovation and What’s Piracy?”)

It is this aspect of Google TV–it’s ability to connect the user to any operating illegal video site leading to the shakedown–that is reported to have prompted Rupert Murdoch sharp condemnation of Google as a “piracy leader”.  (We had anecdotal confirmation from a person in a position to know that Rupert Murdoch is the only media CEO that the Google founders have any respect for.)

According to Forbes, Mr. Murdoch was invited to a Google TV demonstration at the 2012 CES.

“Murdoch asked what would happen if he were to search for a particular blockbuster film, and the [Google TV] presenter explained that the results would be the same ones you’d find in any Google search. Including links to content-pirating sites? Murdoch pressed. Yes, unless those sites have already been removed from search results in response to takedown requests, the presenter confirmed.

Murdoch took exception to that answer.”

Well, better late than never, Mr. Murdoch.  This is what some of us have warned of for several years now.

But how does this connect back to the EFF and Net Coalition union busting?  As we learned from  the anti-copyright organizer’s manual Winning the Web, the corporatist anti-copyright movement has no good answer for ripping off the artists and prefers to stick to the “evil crony capitalists of Hollywood” narrative.  Having faced union solidarity in the net neutrality debate and now again in the anti-piracy debate, this is the artist issue writ large and they don’t like it.  It’s writ especially large in the case of the 400,000 members represented by the alliance of unions supporting rogue sites legislation which also got the backing of the AFL-CIO.

So Google probably instructed its goons to go after the unions–which also neatly fits into its long-range corporate plans for Google TV.  Why would we expect anything else from YouTube, which is simply another version of the union-busting reality TV business.

Say Goodbye to Your Union Benefits

In his prescient piece in Huffington Post, “How the Googlization of Television Will Destroy High Wage, Union Hollywood“, Nathan Newman puts his finger right on the likely reason that the proudly non-union Google is becoming a union buster:

“Google is currently handing out $100 million in upfront production money to partners to create professional long-form content that will air throughout the week on 100 new specialized television channels broadcasting on YouTube.   These partners include Madonna producing a dance channel, Amy Pohler making a comedy channel, The Wall Street Journal and Reuters producing news channels, and Jay-Z, Shaquille O’Neal, The Onion, Slate and a range of other entertainment and media players delivering content for particular taste and demographic niches.

Google will supply the advertising, of course, for these shows and split the revenue with the partner channels (recouping its upfront costs from the partner share of advertising revenue). With online delivery of content, Google will be able to tell advertisers exactly who is watching their shows, their demographic and taste preferences and pretty much anything else those advertisers want to know to more effectively push their products.

With the ability to track consumer preferences and with Google TV direct a chunk to its specialized channels, Google will be able to sell television ads in real-time for any niche audience an advertiser wants at any time.”

Google is also using its monopoly rents to a similar end in the UK–according to MusicWeek, “YouTube is set to invest a potential £10 million in UK content as it is set to looks to expand its range of channels, reports suggest….Any investment is of even more interest when you consider YouTube will soon be accessible in every living room through connected TVs.”

Considering Google’s continued advertising support of Grooveshark (despite dropping the app from the Android Market), Google will probably use the original programing channels it is buying as cover for the pirate sites it will deliver to the home, unpaid channels of network programming side by side with Google’s own–likely nonunion–programming.

As Newman points out:

Producing for niche audiences inevitably means fewer resources — and production companies will likely make up the difference in lower wages for many production workers.

This threatens the current production system, where entertainment unions in Hollywood have built an amazing machine to share the profits of the entertainment companies with the line workers in the industry, not just with the name actors but also with the people who work the cameras, build the sets and deliver the food to the set….[T]he broader workforce in the industry receive residuals essentially from all shows — hits or stinkers — to a shared health care and pension fund, the Motion Picture Industry Pension and Health Plans.   And those residuals are a majority of the funding for the health and pensions of those “below the line” workers.   That integrated system means that the health care and pension of those workers doesn’t depend on winning the lottery of being on a hit show; as long as they work, whether consistently on one hit show or on a bunch of shorter-lived ones, they and their families are taken care of.   For those “below the line” workers, the union benefit plans paid out over $500 million in health benefits alone last year.

Mike check…This is what democracy looks like.

Mike Check…This is What Monopoly Looks Like

Google, of course, is a non-union shop and has little empathy for collective bargaining.  In Silicon Valley, “collective bargaining” is such a foreign concept that it is often mistaken for VCs setting a valuation.  The 1% of the 1% at Google just want to find a way to get to the premium content they now understand that they must have in order for Google to get the real golden goose–non-display uses that can be sold and resold without the content owner or unions participating in the profits from data mining and search.  Unlike Google, the entertainment industry has a long history of cutting in the workers in various ways like residuals, benefits and pension contributions.  The residual system actually does redistribute some of the wealth, and is a long way from free food at the Googleplex being considered part of your compensation–please, sir, may I have some more?

Newman’s observation is spot on:

Likely Union Busting in Cut-Rate Google Productions: As with other industries “transformed” in recent decades, a fragmenting of the industry will likely mean a disintegration of an integrated delivery of health benefits for those in the industry and the destruction of long-term pension benefits.

If all Google YouTube production outfits signed up with the existing unions and their benefit plans, that might mediate the damage.  But every indication is that these productions are likely to try to evade unionization; Anthony Zuiker, who created the crime show C.S.I., is developing a channel called BlackBoxTV for Google and is enthusiastic about the chance to avoid traditional rules — including presumably union rules — in production:

[On traditional television] there is a lot of interference and a lot of rules. With YouTube I will have a very small crew, and we are trying to keep focused on a single voice. There aren’t any rules. There’s just the artist, the content, and the audience.

Note the absence of the interest of workers in the industry in the equation in that last line.   This is a model for empowering and enriching a few top-level “artists” in Hollywood, while leaving the forgotten line workers out of the profit equation.

Monopoly Power Comes to the Upfronts

You could say that Google’s back door payments will only affect a few programs–but this is unlikely to be true in a Google TV world dedicated to “disaggregation”.   Newman has a very important insight into the economics of Google’s advertising model:

Even if a few of Google’s allied production companies unionized, the overall thrust of Google’s advertising model is likely to undermine stability of the Hollywood labor market and thus the room for unionized approaches.   Its model is one of placing ads in real-time, encouraging much more short-term horizons for determining the success of failure of any television venture.

And with its Google TV Ads program, that short-term, real-time ad placement model is increasingly penetrating regular television decisions, not just the emerging online television models as with Google’s YouTube channels.

Currently, advertisers commit roughly $9 billion to the following season’s television shows during what’s known as the “upfront” process each Spring.   Many shows sell out their complete run of ads for the fall.  While the exact price paid for each show’s ads will rise or fall with the televisions ratings received by the show, this does represent a large commitment of resources to each studio that allows planning and, for workers in the industry, a commitment to pay and benefits.

For the big five studio broadcast networks, the total upfront money has been stagnant, with 2004 being the high-water market of total upfront dollars, even as television viewing has leaked out to cable channels and, increasingly, online viewing.  In fact, the only reason revenue has not cratered is that studios have managed to impose rapidly escalating price increases per viewer even as the total broadcast audience has dropped.

But the longer-term planning allowed by the “upfront” system of paying for large chunks of coming seasons is likely to increasingly give way to short-term, real-time pricing if Google is successful.  And even if a production company, existing or emerging, is willing to sign a union contract, even the best-intentioned employers may find it hard to commit to health care and pensions for their employees if a swing in the ratings immediately drains all revenue–and they face union-busting competitors promoting a low road, cut-rate production model.

Good for Google, bad for an entire industry.  This is not “disruptive”, it is a consciously destructive move to undermine the collective rights of workers and bust the unions.

The entertainment industry has led U.S. exports precisely because of the high production values of the U.S. entertainment product, which local overseas producers could not match.  There is a tight-knit community of craftspeople in the Hollywood system involved in everything from set design to editing that continue to outcompete low-wage entertainment sectors around the world.

But the real-time advertising models promoted by Google for the television industry will require incredibly short-term horizons for all entertainment productions and encourage the same kind of low-wage, low-skill models of production we’ve seen in so many other deunionized industries.  Once deskilled, many of those production jobs will likely go overseas as so many other jobs have before.

And the punchline to all this is that Google is a monopoly and will use its monopoly power to try to bust the unions–the Net Coalition flyer is not only evidence of their bad motives, but a harbinger of things to come as Google tricks their unwitting customers into hurting their neighbors.  All this must be taken into account in any antitrust review of Google’s unsavory business practices.  Newman sums it up:

Policymakers can help by adding antitrust scrutiny of Google’s actions in the television market with an eye on protecting labor rights in the sector as well.

The discussion on inequality coming out of the Occupy Wall Street protests is how we got to the point where so many workers are not sharing in the economic bounty of our nation’s economy.  Part of the answer is that as industry after industry faced strains from emerging technologies and globalization, counsels of “do nothing” prevailed as unions were destroyed and jobs shipped overseas.

With Hollywood, we actually have a sector that is currently economically vibrant where the bottom 99% of workers in the industry share in the wealth enjoyed by the top 1% in the industry.   It faces strains on its model — and the threat of Googlization is a top one — but we have time for citizens and policymakers to step up and figure out what new models can sustain both new innovation AND a robust standard of living for all workers in the industry.

So the future of Google TV?  More union busting by a non-union company.  The real question is why would any union pension fund invest in venture capital funds that invest in companies that are out to destroy unions?

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