Apple Posts

Scott Galloway “The Four: The Hidden DNA of Amazon, Apple, Facebook and Google” and Yanis Varoufakis “Talking to My Daughter About the Economy”

Imagine: a retailer that refuses to pay sales tax, treats its employees poorly, destroys hundred of thousands of jobs, and yet is celebrated as a paragon of business innovation. 

A computer company that withholds information about a domestic act of terrorism from federal investigators, with the support of a fan following that views the firm similar to a religion. 

A social media firm that analyzes thosands of images of your children, activates your phone as a listening device, and sells this information to Fortune 500 companies. 

An ad platform that commands in some markets, a 90 percent share of the most lucrative sector in media, yet avoids anticompetitive regularion through aggressive litigation and lobbyists. 

This narrative is also heard around the world, but in hushed tones. We know these companies aren’t benevolent beings, yet we invite them into the most intimate areas of our living. We willingly divulge personal updates, knowing they’ll be used for profit. 

Scott Galloway’s debut The Four: The Hidden DNA of Amazon, Apple, Facebook and Google is a brisk analysis of these four technology driven companies. This is the man who week before the deal actually happened predicted that Amazon would buy Whole Foods. He argues in his book that these companies will be the first to break ( if they have not already done so) the trillion dollar barrier. The secret of their success is dependant not necessarily on their providing services such as being an effective online search engine (every one in six questions asked of Google has never been posed before), a massive marketplace ( Amazon’s online retail store purports to be the biggest shopping complex making it convenient for shoppers to buy from the comfort of their homes), connecting people across the world by preying on their psychological need to be loved and cared for as exemplified by the “like” button on Facebook or that the of the iconic design of Apple products creating a desire amongst people “permitting” the firm to price its commodities exorbitantly, earning irrational profits and yet, always have ready customers. According to the author, Apple controls 14.5 % of the smartphone market but captures 79% of global smartphone profits. In his TED Talk he says “the combined market capitalization of Amazon, Apple, Facebook and Google is now equivalent to the GDP of India. ”

The Four is narrated at a brisk pace, almost as if Galloway is lecturing to his students in the classroom. It is a sharp understanding of these four modern day business empires which together are worth $2.3 trillion. He focusses on the speed at which technological advancements permit people to buy, mine the Internet for information or even be connected to people across the globe in miliseconds whether using social media platforms or their smartphones.  He recognises how these companies synonymous with the information age are focussed on delivering a product or a service for the prime objective of earning a profit — a fact often concealed niftily from the end consumer, i.e. you and I, but making these four no different to any other manufacturing firm. Oddly enough these companies such as Google “ages in reverse,becoming more valuable with use” which harnesses the power of 2 billion people every 24 hours. Facebook connects 1.2 b of the 7.5 people in the world.  Apple’s cash on hand is nearly the GDP of Denmark. Amazon is growing at the rate of 20% plus each year. He acknowledges in the book that these companies have benefitted in a manner of speaking by governments which grant them special treatment regarding antitrust regulation, taxes, even labour laws.  The financial worth of these companies is heavily dependant upon the sensitive personal and credit information shared willingly by millions and millions of humans around the globe.

The Four  is very readable in its arguments except that by focussing primarily on the branding and market identity of these companies. Galloway prefers to focus on the consumerism of these services without ever really discussing the impact it has on humans, particularly in terms of the debt incurred by consuming these services offered. This is where Yanis Varoufakis preferance for calling this consumerism as a “a commodification of everything” and how the rise of profit as a major incentive for people to do things come hand in hand with a new role for debt. According to Varoufakis this commodification is the “unstoppable vicotry of exchange value over experiential value” — a characterstic trait of the market society which most modern economies have transformed into.  Individuals now have to rely upon multinational companies that have technological capability to  fulfil their every need. The companies in order to guarantee their profits, use patents to assert legal onwership of their produce. Usually this shift in produce and consumption patterns is done with the help of the state. “To put it simply, private wealth was built and then maintained on the back of state-sponsored violence.” This lucid historical analysis of  modern economy or global capitalism is available in the former Greek Finance Minister’s brilliant Talking to My Daughter About the Economy. Or watch this fantastic lecture on the concept of money he gave at the Google HQ on 29 April 2016 called “And the Weak Suffer What They Must?

These two illuminating books are significant publications of 2017 and very worth reading!

*****

Scott Galloway is the founder of L2 Inc, teaches brand strategy and digital marketing and the NYU Stern School of Business.  He was named “one of the world’s 50 best business school professors” by Poets & Quants in 2012. He is also the founder of Red Envelope and Prophet Brand Strategy. He was elected to the World Economic Forum’s Global Leaders of Tomorrow and has served on the boards of directors of Urban Outfitters, Eddie Bauer, The New York Times Company and UC Berkeley’s Haas School of Business.

Yanis Varoufakis is a former finance minister of Greece and a cofounder of an international grassroots movement, DiEM25, that is campaigning for the revival of democracy in Europe. He is the author of the international bestseller Adults in the Room, And the Weak Suffer What They Must?, and The Global Minotaur. After teaching for many years in the United States, Great Britain, and Australia, he is currently a professor of economics at the University of Athens.

6 December 2017 

PubSpeak: Total Recall

PubSpeak: Total Recall

My column, “PubSpeak”, in BusinessWorld online focuses on the Wendy Doniger book controversy. Here is the url to it:   http://businessworld.in/news/economy/total-recall/1266222/page-1.html   . ) 

Jaya Bhattacharji Rose On 11 February, Penguin Books India reached a compromise drawn up in a Delhi Court that insisted it cease the publication and sale of American Indologist, Wendy Doniger’s book The Hindus: An Alternative History in India within six months. Dina Nath Batra of Shiksha Bachao Andolan Samitri had filed a civil suit against the publishers to withdraw from circulation all copies. Given that Batra had filed the case four years ago and it was still subjudice, the news of this compromise spread like wildfire. Later that day, Doniger issued a press statement “I was, of course, angry and disappointed to see this happen, and I am deeply troubled by what it foretells for free speech in India in the present, and steadily worsening, political climate. And as a publisher’s daughter, I particularly wince at the knowledge that the existing books (unless they are bought out quickly by people intrigued by all the brouhaha) will be pulped. But I do not blame Penguin Books, India. Other publishers have just quietly withdrawn other books without making the effort that Penguin made to save this book. Penguin, India, took this book on knowing that it would stir anger in the Hindutva ranks, and they defended it in the courts for four years, both as a civil and as a criminal suit. They were finally defeated by the true villain of this piece — the Indian law that makes it a criminal rather than civil offense to publish a book that offends any Hindu, a law that jeopardises the physical safety of any publisher, no matter how ludicrous the accusation brought against a book.”Wendy Doniger

PBI logoPenguin Books India released a statement on 14 February stating “a publishing company has the same obligation as any other organisation to respect the laws of the land in which it operates, however intolerant and restrictive those laws may be. We also have a moral responsibility to protect our employees against threats and harassment where we can…. The settlement reached this week brings to a close a four year legal process in which Penguin has defended the publication of the Indian edition of The Hindus by Wendy Doniger. We have published, in succession, hardcover, paperback and e-book editions of the title. International editions of the book remain available physically and digitally to Indian readers who still wish to purchase it.”

What followed the announcement perhaps was only a natural outcome given the speed at which social media helps communicate information. There was public outrage at this development— newspapers, print, digital, and, of course, social media forums. A number of commentators, journalists, and even Penguin authors wrote passionately against Penguin Book India’s decision to destroy the book. Arundhati Roy in an open letter spoke of her distress and said “You owe us, your writers an explanation at the very least”. Nilanjana Roy, author and member of PEN Delhi wrote on censorship and how to remain free; Jakob de Roover in an outstanding essay “Untangling the Knot” discussed the complexities of governance, judiciary and free speech; journalist Salil Tripathi commented perceptively on the issue on many platforms ; Stephen Alter wrote, “Both as a writer and as a reader, I am deeply offended that anyone should dictate what I may read or write”; Penguin author and essayist, Amit Chaudhuri reiterated that “It’s important that the law protect all texts”; and Antara Dev Sen, Editor, The Little Magazine, wrote that the Indian Penal Code “Section 295A targets ‘deliberate and malicious acts (which include speech, writings or signs) intended to outrage religious feelings of any class by insulting its religion or religious beliefs’. In an age of identity politics and hurt sentiments, this has been used frequently by politically motivated people to stifle free speech. But back in 1957, the Supreme Court had ruled that only when there is a ‘deliberate and malicious intention of outraging religious feelings’ is it an offence under this law. Higher courts in India have consistently ruled in favour of freedom of speech and have protected books and people hauled to court under this law.”

In fact, two Penguin authors, Siddharth Varadarajan and Jyotirmaya Sharma, asked for their contracts to be terminated. Another Penguin author, Arshia Sattar (who has translated Valmiki’s Ramayana and the Kathasaritsagara from Sanskrit to English) expressed her dismay at the “complete capitulation” of the firm and how her “pride and that faith has been shaken…of being with a publishing house that protected its people and the books they wrote”.

A counter legal initiative perhaps was expected. According to the website, Legally India, advocate Lawrence Liang, part of the Bangalore-based Alternative Law Forum, has issued a 30-paragraph legal notice to Penguin India, claiming that the publisher has violated freedom of speech laws and readers’ rights by agreeing to destroy all copies of Wendy Doniger’s book ‘The Hindus’. The notice sent on behalf of Liang’s clients, Shuddhabrata Sengupta and Aarthi Sethi, argues that because Penguin has agreed to withdraw the book from India and destroy all copies, after a legal dispute with a religious group, it has “effectively acknowledged that it is no longer interested in exercising” its ownership in the work and should surrender its copyright to the Indian public. Sengupta is a Delhi-based artist and writer, while Sethi is an anthropologist with a “deep interest in Hindu philosophy”, according to the legal notice. Both are “avid bibliophiles” and were apparently “delighted” when Penguin published Doniger’s book, “and as people who have closely followed the scholarly contributions of the said author they regard this book to be a significant contribution to the study of Hinduism. They consider Ms Doniger’s translations of Indian classical texts and her work on various facets of Hinduism from morality in the Mahabharata to the erotic history of Hinduism as an inspiration for their own intellectual pursuits.”

At the recent Globalocal event (German Book Office, New Delhi’s annual B2B conference on publishing), a regional language publisher wondered if it was possible for any other publisher to option this book and publish it, after all it has not been legally banned in this territory. Echoing this sentiment, Shamnad Basheer, IPR lawyer, writing in Spicy IP, reflected upon the pros and cons of compulsory licensing, and whether it was possible if a publisher decides to stop publication, one could apply for a compulsory license.

Globally Penguin has been in the news related to their peripheral businesses and their merger with Random House. In 2012, Pearson PLC (of which Penguin Books India is a part of) acquired the self-publishing firm, Author Solutions, for $116 million. But in 2013, this deal soured as a number of disgruntled authors filed lawsuits against Author Solutions for its poor service. In the landmark case pertaining to ebooks and agency pricing, in April 2012, the US Department of Justice sued Apple and five publishers, including Penguin, for conspiring to raise prices and restrain competition. This was done after Amazon filed a complaint with the Federal Trade Commission. In 2013, Penguin was obliged to pay $75 million. George Packer observes in the New Yorker, “an enormous sum in a business that has always struggled to maintain respectable profit margins”. On 1 July 2013, the global merger between Penguin Books and Random House was announced. It was a strategic alliance, forged as a response to the growing presence of Amazon in the publishing industry. The formation of Penguin Random House (PRH) has created a group that has 25 per cent of the market share. A merger comes at a cost of resources that have to be taken into account for the new firm to begin work on a strong footing.

In Oct 2013, Penguin Random House announced the completion of its purchase of Ananda Publishers Private Limited’s minority stake in Penguin Books India. It plans to invest Rs 55 crore or $8.6 million for this stake buy. As banker-turned-author Ravi Subramanian, with whom in June 2013 Penguin Books India signed a two-book deal worth an estimated Rs 1.25 crore (approx $210,700) wrote on his blog with respect to Doniger’s case, “publishing is a business”. For any firm, particularly in publishing, this is a lot of money being moved around its balance sheets.  Naturally the ripple effect of these financial adjustments will be felt even in the local markets—it is like conducting business in a global village where in the context of a globally contacted world, the minimum consumption that people desire is also influenced by what is going on elsewhere.

Similarly, with the Doniger case, Penguin Books India has probably taken an informed business decision, based upon a global strategy when it signed this deal on 11 February, in order to preserve a healthy English-language publishing market in India.

Chiki Sarkar, Publisher, Penguin Books India, in a guest blog post in 2012 during the Banned Books week, had this to say: “Injunctions make things costly, time consuming, and take our energies away from the work we are really meant to do. And so we try and avoid them as much as possible. Apart from the fact that we don’t fight hard enough for them, I wonder whether it means we impose a kind of self-censorship on ourselves.”

Ironically this latest controversy broke exactly twenty-five years after the fatwa was issued against Salman Rushdie for his ‘Satanic Verses’ published by Penguin. At the time, his publishers stood by him and did not pulp the book. The fact is publishing is a business that is built upon the creative energies and emotions of people. India is also a functioning democracy. Freedom of speech is the right of every citizen. With the General Elections less than a hundred days away, the need for openness, frank conversations without any inhibitions, and certainly not a capitulation to any ideological position is imperative.

Scholar-journalist and historian Mukul Kesavan points out that that selling books is not like selling any other commodity. Publishers have moral responsibility and a publisher voluntarily agreeing to withdraw a book has previously been challenged with the case of James Laine’s book on Shivaji in 2007. Oxford University Press voluntarily agreed to withdraw the book. An FIR was issued against the publisher and printer of the book in Pune (one charge, under Section 153 A, was ‘inciting class hatred’) and the printer was actually arrested. When the case (‘Manzar Sayeed Khan vs State Of Maharashtra, 2007’) came up before the Supreme Court, however, the government of Maharashtra’s case against the author and the publisher of the book was found to be wanting. So, there is a precedent by the Supreme Court to rule in favour of free speech.

Nevertheless, the Wendy Doniger book controversy raises a bunch of issues pertaining to the publishing industry. Questions about legislation and the freedom of speech, what are the ethics involved in publishing, do readers and authors have a right that they can exercise, what does it mean for licensing, do possibilities exist in a mixed environment of digital and print publishing such as do readers have a choice?

Finally does this self-censorship by a publishing firm mean an inadvertent promotion for self-publishing, encouraging authors to be responsible for their books completely? Interestingly in a space of less than six weeks I have heard John Makinson, CEO, Penguin Random House and Jon Fine, Director, Author & Publishing Relations, Amazon talk about their publishing businesses and both have stressed upon the importance of discoverability of an author. This controversy could not have come at a better time for Doniger and even Penguin. They have achieved the Streisand effect whereby in an attempt to censor a piece of information, it has had the unintended consequence of publicising the information more widely. It has achieved what no PR could have—a boost in sales.

21 Feb 2014 

PubSpeak, “Rules Of Publishing: Be On The Move”There has to be serendipity in publishing. It is the smarter way of keeping the ecosystem alive,

PubSpeak, “Rules Of Publishing: Be On The Move”There has to be serendipity in publishing. It is the smarter way of keeping the ecosystem alive,

Jaya Bhattacharji Rose ( The latest edition of my column, PubSpeak, has been uploaded on BusinessWorld online today. The link is http://www.businessworld.in/news/economy/rules-of-publishing-be-on-the-move/1246485/page-1.html. I am also c&p the text below. )

Bloomberg journalist Brad Stone’s ‘The Everything Store’ is about Jeff Bezos and his baby, Amazon. After the book was published, Bezos distanced himself from the book. Significantly his wife, MacKenzie Bezos, gave the book a one-star rating on Amazon saying it contains “numerous factual inaccuracies” and is “full of techniques which stretch the boundaries of non-fiction”. The book is based on a number of interviews that Stone conducted with Bezos, his staff and ex-colleagues to get a sense of the firm. What is very clear after reading the book is that Amazon is significant because it has the advantage of being a first mover, it is a game-changer, certainly for publishing.

There are three points worth considering:

1. Bezos was the first to exploit the potential of the internet and collaborate with start ups with new ideas. For instance, his acquisition of a firm that specialised in digital books, with the .mobi format, resulted in his insistence on making the files uploaded on Kindle to be DRM protected.

2. He knew that sales ranks would be like a drug to authors, so he insisted that it change whenever a new order came in: thus influencing the gradual shift in publishing houses laying more emphasis on marketing and promotional activities than on editing and commissioning. (Whereas it cannot be an either/or situation, it has to be a combination.)

3. Finally Bezos’s famous analogy of comparison that publishing firms are like gazelles and Amazon is a cheetah. This belief was integral to his strategy in agency pricing. He had to persuade publishers to give him the digital files to the books they published. (It required time since many publishers discovered that they did not have the rights to the digital formats from the authors.) He was convinced marking the books at such a low price was rational since there were no printing and warehousing costs involved — a misconception that has come to be associated with the entire system of publishing. But Amazon is able to achieve much of this due to the ‘technological moat’ it has dug for itself, that is, of low margins. It ensures that with the creative vision Bezos and his team have they are able to expand their business into uncharted domains, effectively keeping competition out.

At BookMark, the B2B space for publishing professionals at the Jaipur Literature Festival there were a number of fascinating conversations about the business. Most significantly the resistance in original publishing to digital and the disruption it would cause in the publishing ecosystem was no longer making news. The presence of technology to facilitate, produce and disseminate books is now an accepted norm. It is here to stay. It was interesting to see how the industry was responding to the rapid changes taking place in the environment, necessitating a rapid pace of evolution by adapting and adopting new methods.

Take Penguin Random House CEO John Makinson’s comment at the event, for instance. The coming together of Penguin and Random House was a “strategically delivered merger” since it was the only combination that changed the game, said Makinson. He was confident that the industry would consolidate itself in a bit of time. At a time when the global industry is reeling from the massive presence of Amazon, the formation of Penguin Random House catapults it to the first position with 25 per cent share of the global market. In October 2013, Jüergen Boos, Director, Frankfurt Book Fair, at the opening of the fair, warned that companies like Amazon, Apple and Google were “logistics magicians but are not publishers”. It stands to reason since online recommendations are purchase based and not behavioural. It does not tell you what people want to read since much of the online purchases are for gifts.

There has to be serendipity in publishing. It is the smarter way of keeping the ecosystem alive, creating newer readers and shifting away slightly from being only a writer’s space.

The overwhelming presence of Amazon, Google, and the iBook store of Apple and closer to home, Flipkart, has resulted in the “disturbing dominance of content” as John Makinson put it. It is inevitable that online retail platforms will require large volumes to remain sustainable. They are not discerning and curate content as booksellers are known to do with their stocks. So, it is fairly common to find on these websites second hand, and out-of-print books, or those titles that belong to backlists but are not readily available. In fact, Paul Yamazaki of City Light Booksellers and this year jury member, DSC South Asian Literature prize  is clear that he will retain titles on his shelves that are worth recommending, not necessary that it is the latest title creating waves in the media. City Light Books, is a landmark independent bookstore and publisher that specialises in world literature, the arts, and progressive politics. It was established by Lawrence Ferlinghetti and Peter D. Martin and synonymous with the ‘beatniks’.

Of late, publishers have been a worried lot since their traditional forms of publishing are not giving them the benefits they have been used to; in addition the sales of ebooks have plateaued, falling far short of the forecasts. The reliance on frontlists is making publishers an anxious lot since author brands only work for a limited time and within a given framework. For instance, commercial fiction authors are a brand unto themselves, a specific market who only read the specific author, but do not guarantee sales with every title. Ever since publishing houses were established they relied on a formula of 80:20 where 20 per cent was reserved for experimentation or the mid-lists, to discover and nurture new writers, which sometimes became the bedrock of the future for the firm. This is now happening less and less. Instead it is easier to offer authors a contract once they have proven themselves in the market. Many new voices are being discovered via the self-publishing route and traditional firms recognising the business potential of this are offering self-publishing services. This is in trade publishing. But even in academic publishing, technological advances and the presence of agents such as Apple, Google and Amazon have had an impact. For instance, material in a digital form for classroom and assisted teaching, teacher resource material and even the rent-a-textbook model, like Coursemart, have proved to be successful.

Among some of the other responses to the changing environment were that established businesses know the only way forward is to recognise that their expertise is limited; collaborations with new ideas or new startups is the only way to keep the business afloat; exploring a subscription service to deliver books/content to users/customers as indicated by the tie-up between Scribd and HarperCollins; looking to create a market beyond English-language readers (since it is a limited market), moving beyond viewing English as a functional, operational and legal language, translating content and creating a base of readers in the mother tongues to increase readership. The fact is that when markets are volatile and competing forces are at play and with 40 per cent of the population online it is not easy to forecast what will happen in the near future, save that a certain amount of realignments will happen through mergers and acquisitions, new systems will evolve and it will be survival of the fittest — big or small, who knows for now!

6 Feb 2014