Go Digital By All Means, But Don’t Bring The Venture Capitalists In To Do It

from the guardian

It’s brutal out there for public service institutions. They are under relentless pressure to conform to a bizarre form of market logic that requires them to turn a profit, even if the only way to do so is at the expense of the public that has supported them for all these years. Whether that’s archives that are being told to make up their budget shortfalls by selling digital access or the BBC being told to expect a much-reduced license fee and to make up the difference by figuring out how to grow Worldwide, its commercial arm.

Even when it’s not so direct as that, the pressure is still there: libraries are forced to carry DRM-locked ebooks by the publishers, even though these books leak huge amounts of sacrosanct patron data – location, reading habits and social relationships – to third parties. From the NHS to the state school system to public media to museums, every institution is being recreated as something that must be judged on nonsensical quantitative metrics that can be easily gamed to make the relevant numbers go up while undermining the services they relate to. For example, schools can improve their attendance numbers by refusing to allow students to accompany their parents to events with unique educational value; hospitals can improve their finances by refusing to treat chronic and emergency patients; and archives can improve their revenues by denying access to all but those who can afford to surmount a paywall.

The proponents of these measures – and the profitable public-private partnerships they entail – call this capitalism, but it’s not very good capitalism. In real capitalism, early stage investors get equity commensurate with the risk attended by early investment. If you start a business and get your mum to mortgage her house to keep it afloat, then get a fat round of venture capital once it’s been proven out and you need some cash to expand to meet demand, the VCs don’t get to take away all your poor mum’s equity. As the first money in, she gets a long-term, hefty chunk of the equity, and dilutes least and last in subsequent rounds. Try to freeze mum out and she can have a sharp City solicitor break you in an ugly minority shareholder lawsuit.

In the story of market-driven public institutions, it’s we, the public, who are the angel investors. We paid to keep the archives growing, to put a roof over the museum, to amass and catalogue all of our nation’s cultural treasures (and the treasures of many other nations). The internet now makes it possible for those institutions to reach wider audiences than ever before, at lower costs than ever before – once their collections are digitised. When Siemens or another big company comes along to digitise our investments, they are the VCs putting in late-stage capital after we’ve borne all the risks, sometimes for centuries. If our management team – led by David Cameron, the self-styled MD of UK plc – offers these investor-come-latelies the lion’s share of the equity (that is, access to those treasures) for their paltry, late-stage capital, then he is in gross dereliction of his duty to us, the shareholders.

But of course, this is a stupid story. We don’t invest in public service institutions because we want them to be profitable. We invest in them because we want them to be good. Galleries, museums, archives and libraries tell us who we are. Schools and hospitals tend our minds and bodies. They are not businesses. We are not shareholders.

More here.

, , , , , , , ,

No comments yet.

Leave a Reply