Here Comes the Hammer: The Tech Industry's Three Crises

The next few years are going to be extremely uncomfortable, and maybe disastrous, for the tech industry. Political opposition to the big tech companies is coming to a head, and the industry lacks allies who could protect it. On the contrary, one of the few areas where many politicians on the left and right agree is that they want to see the tech industry punished (even if they're not completely sure what it should be punished for).

I think many people in tech are in denial about the situation. They think any punishment will apply only to a few firms, or they believe companies that have good intentions and haven't broken laws will be protected. Even big publications like the Wall Street Journal have indulged in this hope (link). That article is behind a paywall, so here's the key section:

"A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were...But antitrust regulators have a narrow test: Does their size leave consumers worse off? By that standard, there isn’t a clear case for going after big tech—at least for now. They are driving down prices and rolling out new and often improved products and services every week."

The reality is that the usual standards don't matter. Antitrust and regulatory law are incredibly vague, and their enforcement is driven by political attitudes more than by the rule of law. If enough politicians and pressure groups want to hurt tech companies, they can find many ways to do it.

Although the focus of public discussion is on the big American tech companies, that's not the real danger. The big companies will face some new regulations, but they have enough money and momentum to weather almost any storm, at least in the short term. I think the much larger danger is the collateral damage that may be inflicted on the leaders of the future, the next generation of tech companies that are just getting started now and can't survive adversity. Reckless regulation could disrupt their ability to create new markets, and changes in antitrust enforcement could dry up the flow of funding to new companies.

Ironically, careless regulations could easily strengthen the current tech dominators rather than weaken them, by stopping the growth of the new companies that would displace today's leaders. It could also shift tech leadership out of the democratic world by enabling firms in other parts of the world, where the government doesn't put the same restrictions on their business practices, to dominate the next wave of technology (link).

The challenge to tech is especially daunting because the industry doesn't actually have just one problem, it has three: a PR problem, a legal problem, and a political problem. They're all coming to a head at once, and they all interact to reinforce each other. I'm going to write a few posts exploring the problems, what caused them, and what we can do about them.

Let's start with the PR problem: the tech industry's mishandling of its own image.

How we hurt ourselves

I won't say the tech industry deserves what's happening, but part of it is our own fault. As a group, we don't communicate well with the rest of the world. We've created a distinct culture, language, and set of business practices that don't make intuitive sense to people outside the industry.

Because we're living in our own little bubble, we are profoundly tone deaf about the way we come across to the rest of the world. We assume people will understand our good intentions, but they don't. What we think is playful they see as arrogant. We celebrate a cool new technology and they see a threat to yet another segment of the economy. Our idea of good aggressive business tactics comes across like careless brutality.

There are so many examples of this that they could fill a book. But here are three recent incidents:

1. Elon Musk's decision to sell flamethrowers. What in the name of God is he thinking? Democracy is in trouble, nukes are proliferating, there's Ebola in Africa -- and Elon and his buddies play with fire guns. If you want to convince people that you're an unstable man-child unworthy to plan the future, I can think of no better way to do it. Elon's poor judgment and lack of self-control is especially troubling because he's running businesses that rely on public trust: trust me not to kill you with my car, trust me not to blow up your astronauts, trust that my tunnels under Los Angeles won't collapse in an earthquake, etc.

I care deeply about what Elon's doing with SpaceX. It's the sort of bold game-changing initiative that the tech industry ought to be driving. Why distract from it with self-indulgent trivia?

(Speaking of SpaceX, I loved the photos of the Tesla in space, but how much better would it have been to send into orbit something that was a symbol of peace and hopefulness rather than a commercial for your cars? Such a wasted opportunity.)

2. Google bamboozles an innocent hair-dresser. Technologically, one of the most interesting demos at Google's recent I/O conference was Duplex, the AI-driven appointment scheduler (link). It made a voice call to a hairdresser and set up a haircut appointment. To folks in the tech industry, it was a cool (if very limited) effort to pass a Turing test. But to everyone in the normal world, it came across as Google using its technology to trick a poor woman in a hair salon into thinking she was talking to a human being – while tech insiders laughed at her.

Sure enough, there were immediate calls for regulation of the technology. Way to go, Google – in one demo you made yourself feel good and simultaneously creeped out everyone else on the planet.

3. Amazon's headquarters competition. Jeff Bezos is an incredibly good businessman, probably the equal of Steve Jobs in his own way. But sometimes he lets his competitive instincts get in the way of good judgment. From Amazon's perspective, it makes perfect sense to have a big public competition for the location of its next headquarters: Amazon can play off all the cities against one-another, and it gets tons of free publicity in the process.

But politically the competition is awful. It positions Amazon as a colossus to which cities and states must genuflect, and it's generating dozens of communities that will be disappointed when Amazon turns them down. The politicians there will have to face voters asking why they lost the opportunity. Do you think those politicians will say "well, candidly, our business climate and incentives just weren't competitive"? No, they'll say Amazon was greedy and they'll blame it for jerking them around. Amazon is creating grass roots enemies for itself across the country.

Tech in the age of cynicism

The tech industry has always had these communication problems, dating back at least thirty years. But the problem was survivable in the past because we were kind of cute and dorky, and we weren't all that big a chunk of the economy. Huey Lewis told people it was hip to be square, and they gave us a pass.

But the dorky act doesn't come off well any more, for two reasons. First, the public mood has changed. The 1980s and 1990s were a time of optimism; many people were willing to trust that the benefits of our products would outweigh any disruption we caused.

But a series of shocks, starting with the terrorist attacks on 9/11, have systematically eroded public trust. Our institutions have repeatedly failed to keep us safe, and some huge companies have been revealed as corrupt at the highest levels. We've entered an age of cynicism and fear in which institutions are assumed to be dishonest and self-serving, and almost no one gets the benefit of the doubt.

For an industry that generates change and uncertainty, losing the benefit of the doubt is a severe problem.

Second, the tech industry has grown to be a much more prominent part of the economy. Tech companies are seven of the 10 most valuable companies in the world. That prominence has changed us. We used to be the outsiders who wanted to help destroy corruption. Apple sold the Macintosh as a tool to defeat dictators, and Google said it was going to break the monopoly of the wireless carriers. Today, in order to do business, we have to get along with those same entities. So Apple bans apps when the Chinese government tells it to, and Google cosponsors ads with the carriers it once wanted to destroy.

Somewhere along the line we became The Man. And in today's world, The Man isn't trusted.

Our rising profile and the loss of public trust alone would be enough to create a crisis for tech, but it's  actually the simplest of our problems. We're also in trouble legally and politically. Next time I'll talk about the legal situation.

I welcome your comments.

VR Cinema: Keep Trying

After two and a half nonstop hours of watching VR "cinema" this weekend, I reached two conclusions:
--My head hurt, and
--This stuff is not yet ready for prime time

The setting was Cinequest, Silicon Valley's quirky independent film festival. This year it added a VR "experience," with eight half-hour VR programs you could watch, at ten bucks a pop. I chose five of them. They were a diverse selection: Big-budget Hollywood movie excerpts done up in VR, independent animation, what appeared to be game trailers, and some live action shorts.

I came in with high expectations: I've always been fascinated by 3D computing, and my first experience with an Oculus Rift was close to a religious event. So I was excited to see Cinequest's "new and amazing worlds" in which "you don't just watch, you actually experience these movies all around you," as the program put it.

Cinequest is a cool organization and they put on a great show. They're a nonprofit, staffed heavily by volunteers, and I applaud them for trying this experiment. But mostly what the VR experience showed is that our technology, and VR cinema itself, isn't yet living up to the hype.

That's not too surprising – we're still in the very early days of this new platform, and my experience with every new platform is that you get a lot of weird experiments while people work out what they can do with it. Based on what I saw at Cinequest, VR cinema is still in the weird stage. Below I'll give you details on each of the shorts I experienced, but here's a summary:

The technology needs more work. When you came into the VR room, the staffers equipped you with a Samsung Gear VR headset with a Galaxy smartphone and a pair of wireless earphones, and told you how everything worked. So right off the bat, this wasn't a movie-like experience; you don't just sit down and watch. The staffers did a very good job of teaching people and maintaining the devices (more on that below), but it was still confusing. The most puzzling part was that there were volume controls on both the headset and the earphones, and you had to turn them both to max in order to hear the content.

The on-screen interface was familiar because I'd played with a Rift before, but as soon as I started my first program I had problems. The video was running at about five frames a second, and the sound seemed way out of sync with the images. After several minutes of futzing around with the controls, I gave up and called over one of the staffers. He explained that the Galaxy smartphones used in the headsets were getting overloaded by all the video files, and had to be restarted regularly. He rebooted my system, a procedure I had to do two more times in the two and a half hours.

Now the video was running at good speed, and I was very pleased that I didn't experience any lag when I moved my head. But the images were grainy, far more so than either a film or television show. The color palette seemed to be limited as well – the live action videos looked washed out, peoples' faces were monochrome, and in dark scenes there was noticeable pixelation. It reminded me of watching an old pre-hi-def color TV.

None of the programs were as immersive as a good movie. In movies we have almost a century of experience in how to tell a story visually. VR is different enough that we need a new set of best practices. For example:

--The camera was sometimes in odd positions. In one film, you appear to be sitting in the passenger seat of a car, but squashed down about a foot above the seat so you're looking up at the characters and can't see out of the front of the car. Instead you have a panoramic view of the world's largest car stereo.

--You don't know where to look. In some of the films I ended up looking in the wrong direction and missed important action.

--Whiplash. One of the films featured a tense discussion between two actors, one on your right and one on your left. You had to whip your head back and forth to follow their interaction. That got old really fast.

--The seams get in the way. Live action VR is filmed with multiple cameras pointing in different directions. The edges between the camera images are blended so you don't usually notice them. But occasionally a character would step into the border between them and his head or some other important body part would disappear.

--It's hard to do closeups. There's a very fine art to the way a film communicates human interaction, a subtle rhythm of closeups, reaction shots, etc. A VR film can't jump your perspective around that way – you'd feel like you're being teleported all over the room. So your perspective tends to stay in one or two places for the duration of a scene, which makes it feel a bit like watching surveillance camera footage. Instead of being in the story, you feel like you're spying on it.

Add these issues to the resolution and color problems, and often I found myself paying more attention to the technology than to the story.

The rules of storytelling still apply. In some of the films, the script and storytelling were awful. No amount of great technology can compensate for awkward dialog and a lack of conflict. Ironically, the worst offender in this area was one of the big-budget Hollywood productions. You'd think they would know better.

I doubt that cinema is the killer app for VR. Even if all of the problems above were solved, I came away doubting that cinema experiences will be the thing that pushes VR into the mainstream. For me, the thing that makes VR special is its eerie sense of presence, the feeling that you're actually in another place even though you know you're not. The VR films gave me almost no sense of presence, which surprised me. I felt like I was in a wraparound Imax theater (with bad image quality), rather than being transported to a different place.

I think the problem is that in a movie your point of view has to be controlled in order to tell you a story. The movie pushes you around – sometimes gently, sometimes forcefully, but almost always you have no control. I think the ability to move around is an important part of the sense of presence in VR. Without it, the whole experience was much less compelling. I think I'd prefer to watch a conventional movie; the resolution is better, and you don't get a headache from the headset shoving your glasses into your face.

What it means: Keep looking

VR today reminds me of the early days of multimedia: We're seeing some interesting bits and pieces, but they're more like curiosities than finished products. I think we'll need a lot more experimentation, and better hardware, before VR will be ready to take off in the mainstream.

Multimedia software came of age in 1993 when Cyan released Myst, the first software title to fluidly merge the large storage of CD-ROMs with high-quality graphics, sound, and interesting experiences. Along with a couple of other popular titles, it created a whole multimedia industry in the 1990s. If we've found the Myst-equivalent for VR, I didn't see it at Cinequest.

Details on the programs

Speed Kills. VR scenes from an upcoming movie starring John Travolta. A movie about speedboats and drug runners ought to be gripping in VR, but this was the weakest program of the bunch. The scenes (which didn't fit together into a narrative whole) were mostly tedious: Travolta feeding a horse, Travolta hitting on a waitress, Travolta talking to a guy in a restaurant. To make it worse, they inserted credits and titles between every scene. So the whole thing felt like a bad commercial.

La Camila. This is a cute animated story with lovely colors, and it was obviously a work of love for the people involved. Unfortunately, the character models were surprisingly primitive. My expectations have been skewed by Pixar, and it was jarring to see people and animals that look like a bunch of linked sausages bouncing like marionettes. Unfortunately, about 2/3 of the way through the program I accidently restarted it while adjusting my headset, and I couldn't get the video to fast forward to where I'd been. So I moved on.

The Humanity Bureau. More movie excerpts, these from an upcoming Nicolas Cage movie. Much better structured than Speed Kills, but I was distracted by some very strange camera angles. There were some good outdoor sequences, but when the story moved indoors I felt the surveillance camera effect very strongly.

The Recall. A VR experience based on a 2017 alien abduction film featuring Wesley Snipes. Stilted and confusing. It reminded me of the Geico commercial parodying horror films. This is the one where I missed a lot of the action because I was looking in the wrong direction, but the things I did see were unintentionally amusing rather than scary.

Boxes. Much better thought-out than the movie excerpts, this is a live action short in which a young man cleans out the home of his late parents, and reminisces about his childhood in a series of flashbacks. A nice story well told, but I don't think it gained much from the VR.

Volt: Chain City. A frantic four minute animated chase with Star Wars-style speeders plunging through a landscape of wreckage. Hello motion sickness.

Women on the Move. A sweet live-action story about a woman in Niger who has high hopes for her granddaughter. It was an interesting visit to a village in Africa, and the VR did give me a good view of the homes and streets of the village. But I didn't feel like I was there, probably because I couldn't move around on my own.

Doctor X: Pale Dawn. Dinosaurs chasing a dune buggy. Even more dizzying than Volt.

Hutong in Live. A love letter to the Hutong lifestyle in Beijing, this one was interesting because it mixed animation and video. Unfortunately, the animation was very limited – the models were low res, you could only move between predetermined spots, and your perspective jumped from place to place rather than moving smoothly. Other than the 3D, it reminded me of a QuickTime title from 1992. I think it would have been much more successful if it had recreated a hutong and allowed you to move through it freely.

Meeting Rembrandt: Master of Reality. An animated interaction with Rembrandt. Nice idea but not very engaging. It felt like an explanatory video you'd see in a museum.

Ultraman Zero VR. Campy but fun: A guy in a monster suit attacks a scale model of Tokyo, and is defeated by a guy in a superhero suit. It was kind of fun to be between the monster and giant superhero, with both of them towering over me. But they still looked like a couple of guys in suits, and the novelty wore off quickly. If I were an Ultraman aficionado I probably would have been more charmed.

What do you think? Have I missed the point? Is there a killer title I should have watched? I'm interested in your comments.