Streaming’s ESG Fail, and Why Artists Should Care About Data Centers and the Data Center Lobbying Connection

The music industry has a sudden interest in being very ESG. The public messaging on the “Music Climate Pact” seems to focus on all aspects of the music business EXCEPT streaming. Now why might that be? It may be because streaming is about the least ESG music and movie distribution method out there. Remember, ESG is a popular acronym that labels a company suitable for investing by people like BlackRock’s Larry Fink (who has been called out for investing heavily in the People’s Republic of China by none other than George Soros, which kind of says it all).

I thought this might be a good time to revisit the “data center lobbying” connection that we first posted about three years ago.

While they like the ESG label, they actually don’t look too hard at what they are applying the label to. A quick refresher–“E” stands for “Environment” which streaming fails for reasons we will discuss on the podcast and are discussed in the Minute Earth video above–especially true for YouTube and TikTok. “S” is for “Social” which company’s like Spotify fail miserably due to their exploitative royalty systems, multibillion dollar stock buybacks that only benefit insiders and income inequality. “G” is for “Governance”, and again companies like Spotify don’t get out of the gate on G because of their supervoting shares of stock that give Daniel Ek and his insider pal Martin Lorentzon 100% control over all Spotify governance decisions regardless of what Spotify’s replaceable board has to say or votes. And we haven’t even mentioned Tencent, the PRC surveillance company or Ek’s own investment in digital munitions.

So there’s that.

Senator 230

But–there’s also a connection in the US (and probably other countries) between the physical location of Big Tech data centers and political power. That’s called Senator Ron Wyden, who just happens to be on the wrong side of every copyright issue (including the unrealized capital gains tax that would crush songwriters and publishers who are selling their song catalogs).

It’s not just Ron Wyden–Senator Klobuchar has a data center connection, too, as does Senator Ben Sasse.

Be advised, then–when they start whinging about ESG, etc., for the music business, we should really be starting with streaming itself, and indeed, the entire Internet. And the political clout that goes with running that network of physical plant.

Greenpeace “Dirty Data” research. www.greenpeace.org/archive-interna…-greenpeace.pdf

Nature magazine sums it up (www.nature.com/articles/d41586-018-06610-y):

“Upload your latest holiday photos to Facebook, and there’s a chance they’ll end up stored in Prineville, Oregon, a small town where the firm has built three giant data centres and is planning two more. [Hello, Senator Wyden.] Inside these vast factories, bigger than aircraft carriers, tens of thousands of circuit boards are racked row upon row, stretching down windowless halls so long that staff ride through the corridors on scooters.

These huge buildings are the treasuries of the new industrial kings: the information traders. The five biggest global companies by market capitalization this year are currently Apple, Amazon, Alphabet, Microsoft and Facebook, replacing titans such as Shell and ExxonMobil. Although information factories might not spew out black smoke or grind greasy cogs, they are not bereft of environmental impact. As demand for Internet and mobile-phone traffic skyrockets, the information industry could lead to an explosion in energy use.”

According to the National Resources Defense Council www.nrdc.org/resources/americas…ing-amounts-energy:

“Data centers are the backbone of the modern economy — from the server rooms that power small- to medium-sized organizations to the enterprise data centers that support American corporations and the server farms that run cloud computing services hosted by Amazon, Facebook, Google, and others. However, the explosion of digital content, big data, e-commerce, and Internet traffic is also making data centers one of the fastest-growing consumers of electricity in developed countries, and one of the key drivers in the construction of new power plants.

Google emits less than 8 grams of carbon dioxide equivalent per day to serve an active Google user—defined as someone who performs 25 searches and watches 60 minutes of YouTube a day, has a Gmail account, and uses our other key services.”

In Google-speak “less than 8” usually means 7.9999999999. So let’s call it 8. As of 2016 there were 1 billion active gmail users. So rough justice, Google acknowledges that it emits about 8 billion grams of carbon dioxide daily, or 9,000 tons. And based on the characteristically tricky way Google framed the measurement, that doesn’t count the users who don’t have a gmail account, don’t use “our other key services” and may watch more than an hour a day of YouTube.

Do we know much about what share of average salary that consumer spends on streaming?

I ran across an interesting 2019 study by researchers at the University of Glasgow (sorry Celtics fans) and the University of Oslo that takes a deep dive into streaming (summarized in this handy infographic).

The research…shows that when plotted against the changing average salary of a US citizen over history, consumers were willing to pay roughly 4.83% of an average weekly salary in vinyl’s peak year of production in 1977, a price which slips down to roughly 1.22% of an average weekly salary in 2013, the peak of digital album sales.

The advent of streaming over the last decade, now means for just $9.99, or just over 1% of the current average weekly salary in the USA, consumers now have unlimited access to almost all of the recorded music ever released via platforms like Spotify, Apple Music, YouTube, Pandora, and Amazon.

And then there’s the environmental impact of streaming. MTP readers will recall that I’ve been on the “dirty data” tip for years and tried to discourage readers from accepting–and in my mind being deceived by–Big Tech’s misdirection play about being green. They dearly want you to believe that the what powers everything from Google searches, to YouTube videos, to Spotify streaming is magic elves running on golden flywheels transmitted over gossamer wings.

This study confirms what we’ve seen in other reporting on the pollution of data centers sucking down hydro power in states like Oregon (represented by anti-artist mainliner Senator Ron Wyden–coincidence?). The study tells us:

“These figures seem to confirm the widespread notion that music digitalised is music dematerialised. The figures may even suggest that the rises of downloading and streaming are making music more environmentally friendly. But a very different picture emerges when we think about the energy used to power online music listening. Storing and processing music online uses a tremendous amount of resources and energy – which a high impact on the environment.”

It is possible to demonstrate this by translating the production of plastics and the generation of electricity (for storing and transmitting digital audio files) into greenhouse gas equivalents (GHGs).

The research shows GHGs of 140 million kilograms in 1977, 136 million kilograms in 1988, and 157 million in 2000. But by 2016 the generation of GHGs by storing and transmitting digital files for those listening to music online is estimated to be between 200 million kilograms and over 350 million kilograms in the US alone.

So it already fails on the S (due to horrendous treatment of creators) and it’s refusal to exercise pricing power even though consumers pay so little; and the G (given Spotify’s extreme control by Daniel Ek’s supervoting stock to the exclusion of shareholders). It also looks like Spotify also falls down on the E, too, with its polluting business model. No ESG ETF for Spotify?

Not likely. The greedy Stockholm syndrome exploits everyone.

@naomielegant: The Internet Cloud [and @RonWyden] Has a Dirty Secret

[Editor Charlie sez:  Guess where some of Google’s data centers are located?  Senator Ron Wyden’s Oregon.  How’s that Green New Deal looking?]

The music video for “Despacito” set an Internet record in April 2018 when it became the first video to hit five billion views on YouTube. In the process, “Despacito” reached a less celebrated milestone: it burned as much energy as 40,000 U.S. homes use in a year.

Computer servers, which store website data and share it with other computers and mobile devices, create the magic of the virtual world. But every search, click, or streamed video sets several servers to work — a Google search for “Despacito” activates servers in six to eight data centers around the world — consuming very real energy resources.

Read the post on Fortune.

@ashleyrcarman: Spotify will use everything it knows about you to target podcast ads

[Editor Charlie sez:  We often talk about how Big Tech uses our music as a data honeypot that allows platforms to learn all kinds of psychographic data about us.  In fact, Spotify playlists are in buckets based on psychographic segmentation for this very purpose.  Now we see what they do with all this data scraping. Spotify is tying your data it tracked scraped from its music streaming dominance to gain an advantage selling a tied product. Spotify uses the artist’s music as a honeypot to track and scrape your data to boost tracking and scraping your data from the podcast honeypot.]

Spotify is going to start using its copious amounts of user data to run targeted ads inside its exclusive podcasts. Targeted advertising remains new ground for podcasts, and the announcement sets Spotify up to potentially branch out beyond its own shows and begin placing ads in other networks’ content. If it catches on, Spotify could become a full-blown podcast ad network.

With technology it’s calling Streaming Ad Insertion, Spotify says it’ll begin inserting ads into its shows in real-time, based on what it knows about its users, like where they’re located, what type of device they use, and their age, similarly to how the broader web operates. Spotify already automates dynamic ad insertion on the music side of its business, it’s now expanding and improving that tech for podcasts.

Read the post on The Verge