Mike: Hmm, I may come to regret this decision. O.K., on with the show!
So this was kind of an insane week in tech news, which is something Iâve grown accustomed to saying regularly in 2017. Over at Pandora, the chief executive stepped down, marking the end of an era for the struggling music company. Itâs hard out there for a streaming music service when Pandoraâs original offering has already been overtaken and subsumed into the stuff Spotify and Apple Music offer, but with even more perks alongside of it.
An aside: Jay Z dropped his new album, â4:44,â on Friday at midnight. Half my Twitter feed was filled with people lauding it, so I decided to sign up for Tidal, the streaming music service owned by Jay Z, to listen to the album. Right now, Tidal has an exclusive on the album, which is a smart way for Jay Z to get more people to sign up for his service, which is far less popular than Spotify or Apple Music.
But then I got this notification, which told me that I couldnât listen to the new album if I signed up for a free trial of Tidal after the record was released. Apparently you have to be either an existing subscriber or a Sprint customer to listen to it.
It made me so mad I immediately canceled my subscription. Why is the music industry so broken, man? I canât deal with it.
Kevin: I believe the technical music industry term for what happened to you is âplaying yourself.â
But youâre not wrong â the entire business model of music streaming services is wild, as evidenced by the fact that even Spotify, the most successful streaming service in existence, lost more than $600 million last year. $600 million!
The only reason this business works at all is because investors keep pouring billions of dollars into it, in hopes these companies will eventually make money and pay them back. So basically, we have venture capitalists to thank for our infinite supply of Justin Bieber covers.
Mike: Well, I still feel awful, but at least I know I can still blame V.C.s for most of my lifeâs problems.
In other news, an insane and scary new malware attack spread quickly to infect many institutional networks this week, which makes me want to abscond to living in a cave in the woods. Kevin, tell me what I should do.
Kevin: Well, we work at The Times, which â as Iâve learned in the process of setting up various accounts and devices on the corporate network over the past two weeks â actually has pretty impressive security measures in place.
Mike: So impressive, in fact, that I still donât know how to log into my desk phoneâs voice mail.
Kevin: But the larger question is: How fragile is our global infrastructure, and what can we do to strengthen it against these kinds of attacks?
Most people think cyberattacks just target peopleâs personal computers, but now that everything is networked, much bigger systems are vulnerable to malware, ransomware and other forms of cyberattack. Air traffic control systems? Hackable. Bridges and dams? Hackable. Nuclear power plants? Also hackable. In fact, one victim of this most recent cyberattack was the Chernobyl nuclear power facility, where the computers that monitor radiation were taken offline by the attack, forcing employees to inspect radiation levels by hand. A lot of these systems are decades old and havenât been updated or patched to guard against current threats.
I guess what Iâm asking is, does that cave have room for two?
Mike: Sorry, all full.
Oh, we should also note the European Unionâs record-setting fine this week against Google, which will cost the company $2.7 billion for its anticompetitive practices. In other words, Google might have to eat out at restaurants one or two times fewer this month, but over all this is more of an annoyance than an existential crisis for it â at least right now.
Kevin: This is not a death knell for Google, but I also think it may be a harbinger of a much bigger and more interesting discussion to come here in the United States. I actually think 2018 might be the year we see American antitrust regulators start going after some of these companies for anticompetitive practices, especially when it comes to the advertising market. According to one estimate, Facebook and Google together accounted for 99 percent of revenue growth in digital advertising last year in the United States. Itâs hard to argue that you have a robust, competitive market when you see figures like those.
Mike: Good point! But before we put our audience to sleep with E.U. regulatory issues, letâs talk about the main event this week: Binary Capital.
For those who havenât been paying attention, this saga broke open about a week ago, when The Information reported that six women had accused Justin Caldbeck, a venture capitalist at Binary Capital, of inappropriately using his position as a potential investor in their companies to sexually harass or hit on them during business meetings or conversations.
After initially denying it, Mr. Caldbeckâs story fell apart and he resigned from the firm, saying he would be getting help. Soon after, other partners offered to leave, and the firm was unable to finish raising another large fund of investor money, effectively shuttering Binaryâs future investing efforts.
Now weâre seeing all sorts of fallout, as other women in tech are calling out the bad behavior of men in the industry.
Is this a true turning point to the industry? Is it possible women may feel more empowered now to speak out against bad actors? Or do you think things will go back to gross business as usual in Silicon Valley after this news cycle passes?
Kevin: I thought you might ask about this. After all, what reader wouldnât want to see two male reporters give their commentary on gender discrimination in Silicon Valley?
But I do think something is changing in the business world broadly, and Silicon Valley is the latest expression of that shift. Iâm very glad that women who have been wronged are speaking out in greater numbers and that their complaints are being taken seriously.
But Iâm cynical that these companiesâ responses have anything to do with an ethical awakening. Itâs not crazy to suspect that what is driving these firms (and bigger companies like Uber, a ride-sharing start-up you may have heard of) to purge themselves of bad actors isnât morals, but opportunism. In Uberâs case, the toxic workplace culture became an issue only once it began affecting recruiting and investor sentiment. In the Caldbeck case, can you imagine a venture capital firm successfully soliciting pitches from female founders after an incident like that?
I guess what Iâm saying is: Show me a tech company that goes public with its bad behavior totally unprompted, with no reporters asking and no damning exposÃ©s about to hit, and Iâll consider the possibility that maybe this isnât all about money.
Mike: Ah, Kevin, youâre becoming just as cynical as I am. Iâm so proud of you.
Anyway, thanks for stopping by! Iâm going to bug Farhad to start live-tweeting updates from his reunion.
Kevin: Happy to talk anytime, especially if youâre trading ore for sheep.
The Saturday tech newsletter will be on hiatus next week and will resume on July 15.