1. "Winner takes all", multilateral platforms will have "creative destruction" consequences

The Internet is a great achievement in the 20th century. It has greatly promoted the progress of the world, injected vitality into society, economy, and life, promoted the development of cloud computing, big data, and artificial intelligence, and also spawned new economic models. "Shockwave: Cultural Reflections on American Internet Giants" focuses on the business model of Internet platform companies, that is, the multilateral platform economy, which is the most representative business model in the Internet age.

The author's work experience is mainly from the film, television and music fields, and the first 30 years of his career have been many pleasant experiences. From the perspective of art workers, he explained the impact of the Internet on works of art, related industry workers, and even American culture through case studies.

The author's first case is an analysis of the disastrous impact of Napster's music sharing software on the music industry. Based on his own experience in the music industry, he believes that the distribution of product revenue generally conforms to the Pareto curve, also known as the 80/20 rule, that is, 80% of a movie or record company's revenue comes from 20% of its products. However, by 2015, in the music industry, 80% of the revenue came from 1% of the production.

A few became very rich, and most musicians made little or no money. This is because of the nature of search engines, which pushes the most popular items to the top of the search results, reinforcing this "winner takes all" situation.

The essence of "winner takes all" is that Metcalfe's Law of the Internet is at work. Metcalfe's Law states that the value of a network is proportional to the square of the number of users. Experts in the fields of economics and management have also conducted research on network effects, laying the foundation for research on multilateral platforms. In 1876, Bell invented the telephone. The more people use the phone, the more valuable it becomes. This phenomenon is called a direct network effect.

Economists further divide the benefits of networks into direct network effects and indirect network effects. In economics, in order to explain indirect network effects, users are divided into different groups according to attributes. If the value of a platform to a group depends on how many members of other groups participate, then this network effect is called indirect network effect. . If everyone participating in the platform looks the same, the indirect network effects are not obvious.

For example, the PC era was a one-sided market, and software developers had to develop software and sell software on their own. In the mobile Internet era, Steve Jobs created the Apple ecosystem and opened a new model of software stores, which is a typical multi-sided market model.

In the end, users choose apps through the Apple App Store, and App developers work hard to enter the Apple App Store. A positive indirect network effect is formed between the two types of users, which brings great benefits to Apple. The App model has gradually become a popular software development and deployment model.

Similarly, in the catering industry, Dianping, Yelp, etc. have provided good services for restaurants and customers; in the transportation service industry, Lyft, Uber, etc. in the United States have become important multilateral platforms.

But multilateral platforms can have so-called "creative destruction" consequences, creating new jobs while sometimes eliminating other traditional jobs. For example, the advent of Internet news and the like has reduced the market value of traditional newspaper companies.

The multilateral platform market is the product of the Internet, and the characteristics of the Internet are vividly displayed on this platform. The characteristic of the Internet is that the scale of leading companies can be developed to a large extent, even if there is only a slight advantage, but through the fermentation of time, it will form a huge or even monopolistic advantage.

At this time, it is necessary to study the regulatory methods and rules to guide the healthy development of the multilateral platform market. While developing unicorn enterprises, formulate a reasonable multilateral platform competition strategy, solve the problem of consumer data security, prevent the disorderly expansion of capital, and ensure interests of SMEs and individual consumers.

2. Why it is not true that the Internet promotes employment

While the aspiration of the multilateral platform is to "eliminate all gatekeepers", what really happens is that the new gatekeeper (the multilateral platform) replaces the old one. The book mentions that although YouTube is the world's largest streaming music site with a 52% market share, it only contributes 13% of the music industry's revenue. Time Warner's market value is less than one-tenth of Google's, and the balance of power in the entertainment world has shifted toward multilateral platforms.

The survey of the labor force of emerging industries in the United States shows that it is not true that the Internet promotes employment. Because tech companies make up about 21% of the S&P 500, a stock index of 500 publicly traded U.S. companies, but they employ only 3% of the U.S. workforce. This leads to stagnant living standards, rising inequality, declining education levels and an ageing population in the future.

The “Uberization” of the workforce, breaking down work into outsourced tasks and dividing wages into micropayments. There are no guarantees and no benefits for the staff on the platform. Sarah Kingsley, a researcher at the University of Massachusetts, found that the real problem with the crowdsourced work model is global labor arbitrage, where capital is always looking for the lowest-priced labor in a globalized economy.

The author analyzes the profound impact of the Internet on several industries and American society through a large number of cases. From the perspective of film and television music creation, although data can show people the current fashion trends well, it does not help guide the direction of art development, because great breakthroughs come from things that have never been done before. The reliance on data has made Hollywood and film and television companies caught in the cultural quagmire of remakes and sequels, because in the Internet age, only works approved by big data can succeed.

The authors want companies like Facebook and Google to change their business models to help thousands of artists create a sustainable cultural environment while protecting user privacy — not just a few software designers billionaires, better play the role of creative artists in society.

The author argues that in order to create a new era of artistic renaissance, a really good public media system is needed, but the performance of the American public television field has not been satisfactory. The only way out of the crisis brought about by technology is some form of guaranteed universal basic income, free healthcare and shorter working hours. Already, some employers in Sweden have reduced employees' working hours to six hours, and Finland is experimenting with income security.

3. Technology is a double-edged sword, an angel and a devil

From the perspective of social operation, in the United States, platform giants can influence national legislation and even directly intervene in social operation. The authors argue that Google, Facebook and Amazon rely on political lobbying and PR to cement their unique market positions. Since regulation is at the mercy of the US government, monopoly will spread freely as long as the voice in Washington that “regulation inhibits growth” prevails.

In 2012, the U.S. film and music industry supported the Prohibition of Online Piracy Act (SOPA), a proposed legislative proposal to combat copyright infringement by restricting access to sites that host or support the trade in pirated content. The proposal specifically targets search engines such as Google that are associated with pirated sites.

However, the day after the proposal was introduced, Google put the image at the top of its search homepage, with the words "review" and "tell Congress," which users clicked to email directly to Congress. Congressional email servers were overwhelmed, eventually forcing House Judiciary Chairman Lamar Smith to withdraw the proposal.

Technology is a double-edged sword, some people think it's an angel, some people think it's a devil. The author argues that Internet elites need to break free from liberal influences. Internet technology pioneer and inventor of the World Wide Web, Tim Berners-Lee, said at the Distributed Web Summit:

The Internet used to be great, but online espionage, blocking websites, stealing other people's content, linking to wrong URLs, etc., are completely contrary to the spirit of the Internet to help people stay upright and innovative.

4. The "five-dimensional world" will bring greater changes and impacts

Technology is developing, and society must continue to progress. Problems will continue to be encountered during development, but we must move forward and solve problems during development.

Recently, the metaverse has become a new hot spot. From a rational point of view, the metaverse is another extension and expansion of cyberspace. The introduction of augmented reality (AR)/virtual reality (VR) not only adds a class of terminals on the basis of PCs and smartphones. More importantly, a new bridge and a new interface connecting the virtual world and the real world have been added. Not only the virtual world replaces the real world, but also the real environment and the virtual environment are mixed with each other, and the virtual world is superimposed on the real world.

When the virtual world and the real world are integrated with each other, various problems will still arise. We must remain rational, analyze and solve problems in a timely manner, and propose solutions from various aspects such as policies and industry rules. While the industry and technology are developing steadily, let technology better serve human beings.

Imagine the future, the "five-dimensional world" is coming to us. The real world we live in is a four-dimensional world, the first three dimensions are the longitude, latitude, and altitude of geographic space, and the fourth dimension is time. From ancient times to the future, history is a process of continuous change. We can go back to a certain period of history in the past to a certain extent, but we cannot fully present the history of a certain period of time.

We call the continuous change from the real world to the world where the virtual and the real are the fifth dimension. Complete reality is the zero point of this dimension. The complete fusion of reality and virtuality is infinite distance. This axis is a continuous or discrete process of change.

In the early days of the Internet, e-mail addresses, telephone numbers, etc., were the seeds of the virtual world. Nowadays, there are more and more contents describing the virtual characteristics of individuals, not only social accounts, communication records, online shopping records, flight records, travel records, but also carried sensors, auxiliary external force devices, and so on. Digital twins, metaverses, etc. will advance the technology of the virtual part, and finally achieve a complete fusion of reality and virtuality.

The Internet has brought us huge changes and a huge impact. The five-dimensional world may bring greater changes and impacts to social rules and world civilization. It is worth our in-depth thinking and planning ahead.