Smart Shift

“Time flies like an arrow… fruit flies like a banana.”
Anthony Oettinger¹

In the late 1940’s, geneticist Angus John Bateman was working at the John Innes Horticultural Institute in Merton Park, London when he set out to disprove one of Darwin’s own theses, on sexual selection. Darwin believed that male mammals generally pursued females, but as he put, “the female, on the other hand, with the rarest exceptions…is coy, and may often be seen endeavouring for a long time to escape from the male.”

Bateman was not convinced about the universality of such a model. Writes Donald A. Dewsbury at the University of Florida, “He contended that the evidence in favor of sexual selection was circumstantial and that alternative explanations were possible.” It was these latter explanations that he sought to prove. In one of the first studies of its kind, Bateman used a selection of flies of genus Drosophila Melanogaster — that is, fruit flies, favoured because² they reproduced easily in the lab and had relatively short lifespans. Because DNA markets were not available, he selected flies with a variety of easily visible mutations: curly wings or narrow eyes, for example.

Bateman’s conclusions were less to do with behaviour and more about the amount of energy expended — simply put, the harder you try, the more babies you can have, as measured right down to the cellular level. His main conclusions³, that relative fertility was a critical factor and that males were more likely to be fertile than females, set the scene for much of the evolutionary genetics field, right up to the present day when additional factors (such as disease resistance⁴) have been thrown into the mix.

A couple of decades after Bateman’s study was first released another geneticist, Robert Trivers, picked up the findings and ran with them, focusing on what he called “parental investment” — that is, the amount of time, effort and indeed risk parents expended on the creation and upbringing of their young. He believed that energy levels continued to be a factor after reproduction, continuing through birth into childhood. “What governs the operation of sexual selection is the relative parental investment of the sexes in their offspring,” explained Robert’s paper⁵. Enabling this to happen requires agreement to be struck between parents, in terms of how the parenting load is to be shared.

Amazing it may be but the ability we now have to decide who cooks the food or changes the nappies has been crucial to the survival of the human race. We, like most other forms of life, have needed to negotiate in order to survive as a species. Indeed, our propensity to survive has been predicated on this ability to negotiate. By extension, the same principle holds true in business, in society, in war and in peace. And it doesn’t take a geneticist to understand that a similar principle will continue to apply in this, data-oriented world. What has changed, however, is less what we are negotiating for, or about, and more what we are negotiating with.

Right now, we are pitched into the middle of a vast experiment. We have all been given a new tool — digital technology — and we have not been given any rules as to how to behave. We have become lords of the data flies, given access to a vast, virtual playground. And, completely unsurprisingly, some of us have chosen to benefit from the opportunities this gives, by positioning themselves as the new intermediaries. Smarter in the business sense, such individuals and their resulting corporations have created contractual frameworks that stack the benefits in their favour: their terms and conditions accept minimal liability and maximum gain. Consider the case⁶ of Apple Music, for example, which deleted all the music from one person’s hard drive, including songs she had written herself. Fortunately she had a backup. Or the many, many examples we have seen about social sites claiming ownership of both data and content. As a result such organisations are becoming very, and unfairly rich.

Think about it. If the digital economy is worth a trillion dollars, that’s a staggering amount of benefit in the hands of a tiny proportion of the world’s population. Yes, they have profited from the potential differences that have opened up; but in the absence of a clear understanding of who owns what in data terms, they have acted on the assumption that it belongs to them — unless they are told otherwise. The actions are not so much corrupt; more that the ignorant are exploiting the ignorant, through the simple act of saying, “Well, if nobody knows who it belongs to , I will take it and see what happens.” Thus far, the main consequence has been to make a small number of people very rich, even while the rest of the world tries to make sense of it all.

Vast quantities of data already exist on each one of us, as we have seen with Acxiom. Corporations know they are acting in a way that extends beyond their remit, as a room of marketers from a variety of companies wondered why consumers did not consider their own data to be of value. Or did they? Deep in our unconscious, we are all making value judgments about the nature of our online existence: those choosing not to live in a cave are deciding to compromise on absolute privacy, for the benefits gained from corporate-controlled, advertising-sponsored information sharing. This notion of value is fundamental to understanding how to progress, as it relates to an ancient understanding. We see it today with savvy street artists who ask people to fold the money before they drop it in the hat and, as we do so, we witness a most ancient form of transaction taking place. “What you did was of value, and I will therefore return some of that value to you,” says the consumer to the entertainer, who then looks to negotiate terms.

So much of our data is bought, sold and raided with impunity. Examples are rife: Yahoo’s web beacons, Facebook’s repeated changes to user settings and wide open⁷ privacy terms, “do-no-evil” Google and its drive-by Wi-Fi snooping. But it doesn’t have to be this way, and perhaps it won’t be. Looking about, we can see a number of new contract models that have become possible. We are already creating new forms of value exchange, with understanding or without. For example, consider my personal use of a Tesco Clubcard store card. By using it, I accept that Tesco will keep tabs on exactly what I am buying. In return I get vouchers and Airmiles, which I can then convert into holidays.

The same could be held true for social sites, which already profess their value exchange mantra: “If you are not paying, then you are the product.” In other words, the benefit you get out of the system is being paid for with your data. In all probability, we just need to recognise we are making a trade — but are we getting a fair deal? If the information is so valuable, why are its creators not rewarded? If you want to know everything about me so that you can sell me stuff, then you can pay for the privilege. Why not come to my house, see the books on my walls, the food in my fridge and watch my children dancing around in the garden — that way you can work out exactly what it is I want and offer me a highly customised set of products, goods and services. I'll make you pay… hmm. Five hundred quid for full access? A thousand?

The sharing economy world also seems to have the cards stacked towards the platform providers. At the end of 2014 the UK sharing economy received a report⁸ by Debbie Wosskow, CEO of Love Home Swap. A key recommendation was that the gov.uk Verify identity management platform should be extended to support the UK’s nascent sharing economy infrastructure. In addition the presence of insurance mechanisms to protect against unforeseen circumstances. The importance (and current lack) of regulation around the sharing economy was stressed.

Some areas are even more obscure in terms of where the value lies — not least, in the crowd. Sentiment analysis is an area being mined by organisations such as Adobe with its Omniture product, as well as a vast number of tagging companies that are together responsible for the the rapid increase in the size of an Internet page. In music, a number of companies are tackling the challenge of mining online sentiment from accessible social sites and generating useful results. Last.fm, now part of a larger organisation. And We Are Hunted and The Sound Index, both of which generate “charts” based on what people say they are actually listening to.

Interestingly, we can see a great deal of innovation coming from that reputedly struggling area of the market, the creative arts. The impetus comes from the fundamental desire to get stuff out there, notes jazz musician Barry Dallmann, “The internet gives us an unprecedented opportunity to go straight to those potential fans and put the music in front of them.” As we have already seen, the possibility of crowd-based band support owes its existence to technology: the direct relationship with fans, enabled by social tools from Soundcloud to Bandcamp, facilitates and simplifies the ability to build a fan base and generate revenue, for bands that lack the marketing muscle of a major label. Even simpler models, such as the patronage model employed by artists such as My Life Story’s Jake Shillingford, depend on online channels to get the message, and the music out there. The music industry is innovative, and rightly so says Karl Nielson, a music manager“Music should be challenging, it should be entrepreneurial, it should be pioneering. Musicians are already going out on a limb, we should be as brave as the artists we are representing.”

Even as Spotify and Apple Music, Google Play and Amazon Prime look to intermediate the market from a top-down perspective, a number of new innovations are being attempted, such as per-user⁹ content streaming which directly links artists to fans. But the most interesting area is that of smart contracts, which is seen as a great white hope by business-savvy musicians. Not only this but, as blockchain starts to be applied more broadly in the financial, healthcare and other industries, it looks inevitable that smart contracts will follow into areas such as¹⁰ property transactions, trust relationships between IoT objects, smart bonds and a range of other financial instruments. Indeed, they have been touted to replace lawyers (though they are not¹¹ legally enforceable at this point). Adoption is relatively slow due to the computational overhead of smart contracts, believes¹² Dr Gideon Greenspan, founder of Coin Sciences and MultiChain. “I certainly wouldn't rule out computational blockchains in general in the finance sector,” he said. “I just think that if it's possible to implement a certain application on a more simple blockchain which has better performance characteristics, then people will probably do that.”

Smart contracts are not ‘the answer’, but as physical and virtual collide, it becomes ever more difficult to determine where the value lies and to allocate this value appropriately. Consider music in the live arena. “There’s a huge opportunity for a much more holistic, data-driven approach based on real evidence,” says Songkick’s Dan Crow. Not only could this benefit performers and fans, but also owners of clubs and concert halls. With the right data at their fingertips, they would be better able to pitch to performers to come and play at their venues. But this means getting money in from, and out to the right people in the appropriate way. Consider also the sonic ‘augmented reality’ applications such as Soundhound and Shazam (which, in the simplest terms, can “listen” to music and tell you what the title is) are also examples of apps that combine captured information with that available from an online database. Such technologies enable new things to happen, which enable value to be fed back. Examples from The Great Global Treasure Hunt to the multimedia stage adaptation of Howl’s Moving Castle by Davy and Kristin McGuire are indicative of both the shape of things to come and the kinds of revenue models that become possible if physical and virtual are integrated.

But if everyone is participating in a greater whole, everyone needs to be rewarded for their contribution. All of which make it even more important to bottom out the notion of value exchange in the virtual world, not just for effort but also artistic contribution: legal concepts of IP and copyright need to move beyond current models, for the simple reason that even the smallest pieces of information can have value. For example, if a person walks to the north pole and takes a temperature reading, should he or she not be recompensed? We see it in the arts world, for a sample of music so why not for a stream of data? Equally, who owns the information about how a house heats, or where a person is? If this information has value, then the person should be able to monetise that value. As a consequence the need for algorithmic representation of agreement, which can be enforced electronically, becomes clear.

Of course, it will still be possible to tie someone, or something, into an unfair contract. At the same time the frameworks need to look to the greater good, and not short-term gains or exploiting weaknesses in the model “Like every band, we would have signed for nothing, given the opportunity,” says Pink Floyd’s Nick Mason. Which means that much of the future boils down to the intermediaries we choose, and the trust we place in them. Despite instinct suggesting the contrary — “The natural inclination is to sell direct,” says Ed Averdieck co-founder of CueSongs, a rights buying portal he started up with musical pioneer Peter Gabriel — intermediaries provide a vital link between supply and demand, both enabling the transactions and curating the information they hold. Says Ed, “All these rights are sitting in the basement in contractual straightjackets. We thought, if we could only give them a canvas…”

In the future we can hope to see a new generation of intermediaries that enable the creation and enforcement of genuinely fair contractual frameworks that reward both effort and intellectual contribution. For sure, there is an overhead in doing so, but the owners of transaction engines (that is, banks) and other platforms should be recognised for what they are, and treated as servants to, not controllers of each transaction. We will inevitably have to put up with tryers and hangers-on, money grabbers and incompetent buffoons – these are all parts of the rich tapestry we call humanity. But at the same time, technology itself should drive a highly necessary race to the bottom for the cost overhead incurred in any exchange of value.

Despite the possibilities that technology now affords, we have not come far from the principle of lobbing a shilling in a bucket in gratitude for being entertained, or being supported in our daily doings. For music, this offers a great deal of hope. “If you can please the artists and the fans, the rest will follow,” remarks Songkick’s Crow. And all that “the rest” implies – managers, labels, broadcasters, marketers and everyone else involved in the production, delivery and performance process. A similar principle applies across just about every other industry. To enable it however requires us to re-think how we see our place in relation to each other in ourselves, in our communities and in society as a whole, even as industrialists look to grab what they can. Like fruit flies, our future depends on it.