Some Things Are Bad and They Don't Have To Be

Humanity is bad at some things because they're hard. Space travel, for instance. We can barely get off our planet at all. We got up to the rock orbiting us a few times and it was a big deal. Our current major project is to get to the planet right next door. It's really hard and we're not good at it because we simply haven't yet developed the technology to do it well.

Then there are other things, like trying to watch a video produced by a major US media company when you don't live in the US. Having lived in the US most of my life, I never realized what a complicated task this would be. It often involves testing multiple VPN connections to find one that the streaming service hasn't blocked, restarting the video several times while watching it, praying to various gods, ritual sacrifice, etc.

My latest encounter with this was trying to watch the Saturday Night Live episode with Elon Musk. NBC makes the video available on their website, but viewers outside the US (who don't have a sufficiently crafty VPN¹) are greeted with this:

And why? It's not because we lack the technology to stream bits across borders. The bits don't get held up in customs. They don't have trouble fording rivers or crossing mountains. Technically, there is no difference in sending bits from NYC to LA and sending them from NYC to Hong Kong.

Balaji Srinivasan wrote an interesting piece recently on 1729 about Founding vs Inheriting. NBC would be a prime example of one of these East Coast, old media companies that runs on inheritance. Balaji's contention is that people who inherit things are less competent than people who found things. They lack the ability to do what the founders of their institutions did, so they do it poorly. I think this is true in as far as it goes, but it is incomplete. By the time inheritors take over, the initial task is no longer that difficult. Like I said above, all NBC needs to do in order to enable to people to watch their programming is to stream some bits over the Internet. In 2021, this is not a huge technical challenge. ²

Founders start institutions to solve problems. When the National Broadcast Corporation (NBC) was founded, radio and then television were new and exciting technologies. NBC and its contemporaries set about solving the problem of how to use this new technology to more effectively deliver entertainment and information. The solution they came up with was brilliant, simple, and effective. They put up big antennas and blasted the signal out as far as they could. Anyone within range who had a suitable receiver could pick up the signal and watch or listen to whatever NBC wanted to tell them. NBC sold some ads around the content, made a ton of money, people watched great shows, and everyone was happy.

Over time, the technology for broadcasting signals to people - cable, satellite, the Internet - has only gotten better. Yet the experience of receiving those signals has gotten worse. The explanation is not merely that the inheritors are less competent than the founders, but that they are not even attempting to do the same task.

It's not just that the people running NBC couldn't start a broadcast television network from scratch if they had to, it's that "start a broadcast televsion network" is no longer even the correct solution to the original problem of "distribute video content to people" and that original problem is not what the people running NBC are trying to solve. They're trying to solve the problem of "maintain (if possible, increase) the profitability of this specific broadcast television network". As such, when they encounter obstacles to solving this problem - like if we stream our content without onerous restrictions, people might copy it and reuse it in ways that don't make us money ³ - they take a narrow view to solving them that is constricted by a business model developed almost a hundred years ago.

Meanwhile, someone like YouTube comes along and notices that the original problem (remember? deliver entertainment to people?) is no longer solved as well as it could be given the current technology, so they do it better. Ironically, their approach is closer to NBC's original one: user the best technology available to blast out content to as many people as possible, slap some ads around it and call it a day. Despite the fact that there is a freely available script that lets people download any video they want, YouTube makes money hand over fist. In contrast to NBC's approach of tightly restricting who is able to view content to ensure they've extracted the maximum amount of revenue per viewer, YouTube largely doesn't care about silly things like which country the viewer happens to be in, except in cases were inherited rightsholders like NBC force them to. By accepting probably a lower amount of revenue per viewer and vastly increasing the number of viewers, they can make a lot more in total.

So, it's not just that people who inherit things mostly don't know how to build them. Sometimes it's that the things they inherit are obsolete, or in the process of becoming so. Like a drowning person dragging under would-be rescuers, the institutions focus on the preservation of their status quo to the exclusion of new strategies that would save them.

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