PDF Summary:The Master Switch, by Tim Wu

How do open, innovative industries give way to monopolistic control? In The Master Switch, Tim Wu examines the cycle of growth and consolidation across various information sectors, from film to radio, broadcasting, and more. He posits that new technologies foster open, diverse environments—which ultimately centralize under a few powerful entities. This tightening of control favors incremental innovation over revolutionary breakthroughs, ultimately requiring government intervention to break the monopolies and restart the cycle of open competition.

Wu delves into AT&T's telephone dominance, the establishment of regulatory bodies to control nascent industries, and how Hollywood's studio system once restricted creative expression. He argues that centralization and oversight, though sometimes productive, ultimately stifle groundbreaking progress in the information industries.

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Models of innovation that are centralized often find it challenging to adapt to technological advancements.

Wu highlights the difficulties that hubs like Bell Labs, which are central to innovation, encounter when trying to foresee and adapt to technological changes. The most brilliant minds, when concentrated in a handful of places, may occasionally overlook certain aspects, especially when it comes to anticipating technological innovations that have the potential to render existing markets obsolete. Wu believes that a competitive atmosphere, where the most robust strategies succeed, fosters an innovation process that is more efficient than one directed by centralized planning. Concentrating authority over sectors that distribute information within the grasp of a single person or a limited collective invariably results in the narrowing of these sectors. The evolution of AT&T's corporate structure shows that a system governed by a unified command, while beneficial in some respects, inherently faces difficulties in nurturing innovative shifts that might threaten the position of the ruling entity.

The hindrance of FM radio's progress by the FCC.

Tim Wu is of the opinion that the measures taken by the Federal Communications Commission have been a substantial obstacle to technological progress. The actions of the oversight body, often presented as protecting the common good or easing the transition to new methods of communication, have consistently supported established industries by protecting them from the dynamics of innovation and market competition.

The FCC's regulatory methods, coupled with its intimate ties to the radio sector, impeded the progress of FM broadcasting and the advent of electronic television.

The FCC's regulatory approach and its close ties with the radio sector, Wu argues, substantially impeded the progress of FM radio and the development of digital television. The regulatory authority frequently set restrictions on new technologies that preserved the status quo, thus giving an advantage to established broadcasters such as RCA and NBC. As a result, FM radio, despite its superior sound quality and ability to support more stations, continued to play second fiddle to AM for an extended period because the Federal Communications Commission's persistent limitations relegated it to a more obscure portion of the radio spectrum and required simultaneous transmissions. For nearly two decades, regulatory actions by the FCC unintentionally impeded the development of television commerce, which hampered the progress of the nascent mechanical television industry while concurrently giving RCA the chance to refine and take control of the electronic television market. The declared aim to cultivate a more orderly development of the medium ultimately provided substantial advantages to the top broadcasting corporations.

Government intervention in establishing technological standards and hindering new market entrants can result in negative consequences.

Wu emphasizes the negative impact of government intervention on establishing technological standards and limiting the entry of new media into the market. The tendency of the Federal Communications Commission to impose a consistent approach to new technologies often stifles innovation and diminishes variety, as it discourages independent trials and deters newcomers from joining the market. The author emphasizes the contrast between the initial period of radio, marked by the liberty afforded to pioneers and hobbyists to experiment with broadcast mechanisms and programming, and the later phase marked by the creation of the Federal Radio Commission, which introduced a more cohesive system of regulation. The result of this broader approach not only sparked a period characterized by invigorating creativity but also established the groundwork for crucial technical and commercial infrastructures that played a pivotal role in defining the fundamental nature of the medium. Wu argues that, in contrast to government planners, market competitors have a superior ability to anticipate and fulfill the evolving demands of society, a viewpoint that resonates with Friedrich Hayek's philosophy. The FCC's in-depth and prolonged scrutiny serves as a prime illustration with television and FM radio as its focus.

Other Perspectives

• Regulatory systems are designed to protect public interests, ensure safety, and maintain fair competition, which can be crucial for the responsible development of new technologies.
• Concentrated innovation approaches can lead to more efficient research and development due to pooled resources and expertise, potentially accelerating technological breakthroughs.
• Incremental improvements are often necessary for the stability and reliability of services, and radical innovations may require a more cautious approach to integration into existing systems.
• Centralized models of innovation can provide a coordinated and strategic direction that might be lacking in a more dispersed innovation ecosystem.
• The FCC's regulatory methods may have been intended to prevent spectrum interference and ensure the orderly development of broadcasting services, which could benefit the public in the long term.
• Close ties between regulatory bodies and industry sectors can lead to regulations that are informed by industry expertise and practical considerations.
• Government intervention in establishing technological standards can help ensure compatibility, interoperability, and a level playing field for all market participants.

Monopolistic dominance and structured oversight substantially impact the freedom, diversity, and expression of culture within the information-related industries.

The control and monopolistic power within the sectors that handle information significantly affect freedom, the breadth of cultural expression, and the diversity of viewpoints. Wu argues that the dominance of a few powerful groups over information systems can create an environment that is hostile to radical innovation, which may stifle free speech and reduce the diversity of cultural expression. He discusses the initial challenges faced by the film industry in escaping the control of the Edison Trust, the creation of moral guidelines through the Hollywood Production Code, and the uniformity of content in commercial broadcasting.

The Edison Trust's suppression of innovation in the film industry.

The establishment of the Edison Trust in 1908 highlighted the negative impacts of a single entity's control over a sector that represented both a marketable product and a nascent creative medium within the realm of cinema. By wielding control over key patents related to motion picture technology, the Trust was able to restrict both the production and exhibition of films and to enforce an overall homogeneity of content that stifled creative expression.

The Trust's dominion over patents not only limited the length and themes of movies but also hindered the emergence of film stars.

Wu highlights the Trust's control over technological patents, which stifled the film industry's advancement by limiting innovative approaches to film length, thematic content, and the emergence of prominent actors. The consortium enforced limitations that hindered the development of longer film productions, which at that time represented the main progress in European cinema. By imposing restrictions on the length of international movies and prohibiting their creators from producing comparable content, it effectively hindered the progress of film as an art form, keeping it in its early phase of evolution. Additionally, the corporate entity preserved its leading position by forbidding the participation of renowned performers in all of its film projects. The development of the film industry into a recognized artistic profession, particularly in terms of recognizing the creative aspect of acting, was impeded by worries about escalating wage demands from prominent actors.

The suppressive impact of cartel-imposed uniformity and restrictions on artistic freedom.

The author argues that the emergence of artistic creativity was significantly hindered within the early film industries by cartels that imposed standardization and censorship. The trusts sought to ensure uniformity throughout their product offerings. The licensing system of the Trust not only limited the production of films with greater length and complexity but also banned the representation of specific themes deemed inappropriate, including violence, sexual innuendos, or depictions that might trivialize the concept of theft. As a private entity, the Trust wielded the authority to decide what moral content in films was permissible throughout the nation, without being limited by constitutional safeguards. The inclination toward suppression, Wu argues, is less a result of the founders' greed or lack of creativity and more a consequence of the inherent tendencies within a unified information sector.

The regulations were known as the Hollywood Production Code.

The history of film regulation in the United States demonstrates that control over a cultural medium can sometimes shift, even after the fall of a once-dominant coalition. In the 1930s, the rapidly expanding Hollywood film industry faced a considerable obstacle, not because of the Justice Department that had just broken up a previous system of film regulation (the Edison Trust), but due to a private Catholic organization known as the Legion of Decency, which exerted its influence not through legal or patent rights but by starting a boycott of films they deemed inappropriate. The moguls of the movie business, confident in their supremacy over competitors, soon had their eyes opened by the developments of the early 20th century.

Private entities have played a role in shaping the content of movies and in maintaining conventional standards.

The efforts spearheaded by the Legion of Decency had impacts that extended beyond merely affecting movie ticket sales. The influence of the group was significant, culminating in the establishment of the Hollywood Production Code, which became foundational to the film industry. Father Daniel Lord, a priest, established a code that outlined the ethical limits of movie creation, which included more than just restrictions on nudity or what is often termed "adult content." Tim Wu describes this approach as a system that insists on "conservative perfectionism," requiring movies to bolster traditional views on societal institutions such as matrimony and the police force.

How the vertically integrated studio system facilitated external control over cultural production.

Wu suggests that the studios' susceptibility to external pressures was ironically due to their vertical integration, a strategy they adopted to enhance their autonomy. They controlled every aspect of movie production, from the initial stages to the distribution, thereby creating a robust system for mass movie production. Their dominance also established a solitary point of vulnerability, rendering them susceptible to coordinated demonstrations and various types of sway. With all theatrical releases controlled, rather than being in the hands of independent theaters, the studios had to concede to the Legion's demands – there was no alternative channel for their product. The vulnerability of the information sector is emphasized by its systems' tendency to function as unified networks from the point of creation to the dissemination. The Hollywood Production Code exemplifies how these entities are vulnerable to outside influences.

Broadcast content became homogenized.

Wu observes that the rise of network broadcasting, first through radio and then television, led to a more homogenized selection of programming and a narrowing of conversation nationwide. Broadcasting, though it once nurtured a space for more complex content, ultimately transitioned to appeal to a broader audience, moving away from earlier, less controlled media periods.

The configuration of network broadcasting led to a more limited national discourse and diminished the diversity of available programs.

Wu suggests that the network-centric model of broadcasting led to a more limited national discourse and reduced the diversity of available programs. Networks inherently aim to engage as many viewers as possible and thus gravitate towards programming with widespread appeal. The approach of offering content aimed at garnering the widest audience, often known as "least objectionable programming," is not necessarily born out of malicious motives. It reflects a natural inclination within the business to avoid content that might alienate a substantial portion of its audience. The unavoidable consequence is a suppression of creativity in programming methods and the articulation of views that challenge conventional standards or the prevailing authority. Individuals with dissenting views were not allowed to participate unless they conformed to the committee's inclination towards standardized content.

The quest for advertising revenue frequently leads to content designed to attract as many viewers as possible, which in turn reduces the variety of viewpoints.

Network broadcasting's quest for advertising dollars resulted in programming aimed at drawing in large, uniform groups of viewers, consequently pushing aside smaller, specialized voices and types of media. A programmer usually avoids content that might alienate some viewers, as the financial backing of the program is closely tied to the number of people watching the ads that finance it. A broadcaster, lacking any specific political leanings, is compelled to deliver political viewpoints to their audience in a way that is considered appropriate, akin to providing acceptable culinary options at a social event. Broadcasters, dependent on advertising revenue, frequently show reluctance to air content that presents viewpoints differing from the majority of Americans, despite the theoretical equality of all opinions, as some are prioritized in practice.

Other Perspectives

• Monopolistic dominance can also lead to efficiencies and economies of scale that benefit consumers with lower prices and more consistent products.
• The Edison Trust's control might have provided a necessary structure to stabilize the early film industry and foster initial growth.
• Limitations on film length and themes could have been a reflection of the audience's preferences at the time, rather than purely suppressive measures.
• The emergence of film stars might have been hindered by the Trust, but it could also have prevented the early monopolization of star power, which could have its own negative impacts on diversity.
• Uniformity and censorship by cartels could be seen as a way to maintain certain societal standards and protect audiences from content deemed harmful.
• The Hollywood Production Code, while restrictive, may have helped the film industry avoid external regulation by government bodies, allowing it to self-regulate instead.
• Vertical integration in the studio system could be defended as a way to ensure quality control and brand consistency across the production and distribution process.
• Homogenization of broadcast content can be seen as a response to the preferences of the majority, ensuring that the content is suitable for the widest possible audience.
• The network broadcasting model's focus on widespread appeal could be argued to provide a shared cultural experience that unites diverse audiences.
• The pursuit of advertising revenue ensures that broadcasters remain financially viable and able to produce content, even if it leads to more mainstream programming.

The convergence and amalgamation of various information domains.

The information sector has consistently shown a tendency to create areas of influence despite the basic technologies offering potential for broad accessibility. Wu delves into the transformation of initially open markets in sectors like broadcasting and entertainment into spaces where a handful of influential companies, often with government support, come to control the industry.

The Bell System, under the expansive umbrella of AT&T

AT&T's Bell Systems serve as a prime example of a powerful entity in the information industry. The story of the company illustrates the transformation of an information-based industry from an open environment to a tightly regulated one, highlighting the enduring allure of justifying the creation of a centralized monopoly with the pledge of providing "universal service."

The original Bell Monopoly came into existence with the aid of Western Union's preeminent position.

The consolidation of telephone services did not necessarily follow a predetermined path from the outset. In that period, Western Union, the sole provider of telegraph services, faced a challenge from Alexander Bell's revolutionary telephone, sparking a prolonged struggle for supremacy. Western Union initially failed to acknowledge the telephone's capacity to challenge its business. Motivated by the substantial revenue generated, the executives of the company concentrated on improving the telegraph infrastructure. Gardiner Hubbard's proactive leadership in the late 1870s helped the nascent Bell Company begin to attract customers, forcing the telegraph giant to recognize its new rival. In their quest for dominance in the market, Western Union enlisted Thomas Edison to create an improved communication device, and for a time, it appeared they might prevail. However, their own grandiose aspirations and financial troubles, along with a strategically timed lawsuit from the smaller Bell concerning patent entitlements, prompted the company's executives to completely withdraw from the telephone industry. The initial dispute set the foundation for the creation of the original Bell Monopoly.

Fresh competitors surfaced, presenting a significant threat to Bell's established dominance in the market.

After Bell's initial patents expired in the 1890s, hundreds of independent companies emerged to offer telephone service, creating a challenge that would continue for nearly three decades. Historians frequently overlook the fact that this transformation was primarily motivated by a visionary ideal to restructure society. The Independents, who operated mainly in rural areas and small towns not serviced by the Bell System, saw the telephone as a tool to promote the development of local communities and to improve the daily lives of farmers and townspeople. They were also driven by a desire for greater control over their own communications and a resentment of Bell's dominance.

During the period when Bell reestablished its dominance. Theodore Vail championed the creation of a unified and uniform network that ensures consistent service quality for every user.

Theodore Vail successfully realized his vision for a unified telephone system under the management of AT&T during the early 1900s, with the support of financial magnate J. P. Morgan. Upon resuming leadership of the Bell System after a hiatus of more than a decade, Vail, with Morgan's backing, solidified the company's dominant position by acquiring rival entities, forging interconnection deals with autonomous firms, and pursuing government support in regulatory affairs. Vail pioneered the concept that a single monopoly would most effectively serve the telephone industry, a notion that stemmed from both a corporate ambition for supremacy and a genuine conviction in the importance of extensive connectivity.

The operations of AT&T were closely intertwined with those of the United States government, especially in matters pertaining to national security.

Wu highlights the symbiotic relationship that AT&T had with the United States government, which also played a pivotal role in enhancing the country's defense mechanisms. Throughout the 20th century, Bell sustained a steadfast alliance with governmental entities, guaranteeing secure lines of communication for military and assorted government agencies. Starting from the 1940s, Bell Laboratories initiated a sequence of technological advancements that were advantageous for military use, including the creation of the transistor and the advancement of various communication technologies designed for defense applications. The company's technical team was instrumental in advancing radar and missile guidance technology and also dedicated their skills to enhancing and maintaining the nation's extensive commercial communication infrastructure.

AT&T's lasting impact on regulatory measures and the resulting implications for technological progress.

Wu argues that the government's support for AT&T's monopolistic control came at a cost. The company's established status as a regulated monopoly served to obstruct the emergence of competitors and the infusion of fresh concepts into the telecom sector. Its focus on maintaining its dominance, as embodied in Bell Labs' preference for sustaining innovations, led to the suppression of technologies like magnetic recording, mobile phones, and fiber optics, innovations that might threaten the existing business model rather then improve it. The decision by the Justice Department to break up AT&T in the 1980s liberated previously restrained creative and technological energies, signaling an end to the telecommunications giant's period of dominance.

The domain of radio transmission: The shift involved the channel becoming a regulated entity from its previous state of openness.

The evolution and integration of radio broadcasting illustrate a pattern identified by Wu in the information industries, where a period of early excitement and chaos ultimately gives way to a phase controlled by large companies, which is somewhat backed by government entities.

Radio broadcasting initially emerged from modest origins, carrying with it hopes filled with optimism.

Innovative pioneers initially engaged in radio broadcasting as an amateur pursuit, acknowledging its potential to effect substantial changes in society. During the early development of radio, numerous local stations sprang up across the country, providing a mix of music, news, religious messages, and agricultural updates, as outlined by Wu. The medium was enveloped in an aura of excitement and limitless potential. Enthusiasts believed that it had the potential to link remote communities, bolster public discourse, fortify educational efforts, and play a significant role in fostering a more sophisticated society.

AT&T's National Broadcasting System rose to prominence in networking and advertising.

Upon gaining exclusive command over the telephone network, AT&T expanded its core philosophy of cohesive service into the emerging field of radio broadcasting. The company pioneered the integration of advertising into broadcasting's financial frameworks and established a network of interconnected stations via its widespread long-distance wiring infrastructure. The broadcasting network of AT&T grew swiftly and emerged as the preeminent entity. It also made “sponsored programs,” shows produced by advertisers, a reality, thus defining the nature of commercial radio as we’d recognize it.

The founding of RCA was a significant event, marked by David Sarnoff's endeavors to establish a dominant role in the broadcasting sector.

Guided by David Sarnoff, RCA became a significant rival, contesting the enduring dominance of AT&T, which stemmed from its sole possession of the high-quality long-distance lines. In 1919, following the Navy's push for the unification of American radio patents, RCA was established and focused on the manufacture and dissemination of radio sets in reaction to the sophisticated network established by Bell. AT&T agreed to exit the radio network business, retaining its stronghold in long-distance telephone services, as RCA took over the management of the network.

The creation of the Federal Radio Commission was a catalyst for the expansion of networks that focused on commercial broadcasting.

In 1927, Congress passed the Radio Act, creating the Federal Radio Commission (FRC) to bring the burgeoning radio industry under the direct supervision of the federal government. The competition between AT&T and RCA, coupled with the chaos introduced by a multitude of broadcasters with varying capabilities and standards, demanded that action be taken. The transformation of radio was significantly influenced by the pivotal role of a national regulatory body that advocated for large-scale, commercially-oriented networks with extensive coverage. The enforcement of regulations that required licensing and allocated radio frequencies resulted in the shutdown of many small broadcasting operations, which in turn facilitated the emergence of NBC's dominance followed by CBS's ascent. This change marked a definitive shift toward a monopoly-based industrial framework in the US broadcasting industry.

The studio system in Hollywood rose to prominence before it eventually fell apart.

Hollywood's studio system serves as a prime example of the pattern Wu outlines. Initially characterized by the dominance of a group of patent owners known as the Edison Trust, the industry went through an expansion following the Trust's dissolution in 1915, and then saw a consolidation in the 1930s as studios took over the entire industry, demonstrating the control dynamics that Wu points out in fields linked to information distribution, including a vulnerability to both government sway and corporate supremacy that the heads of the studios did not anticipate.

The progression from Edison's control to the emergence of autonomous filmmakers eventually culminated in the creation of the famed Hollywood studio system.

The American film industry began when multiple producers joined forces with the main patent holder, creating an alliance referred to as the Edison Trust. The consortium held a strong grip on the film production and exhibition in the United States until it encountered resistance from Jewish immigrant filmmakers from the East Coast, who sought to cater to the audience's desire for more sophisticated works, such as full-length movies that had gained popularity in Europe. It was this group of rebels, including Adolph Zukor, Carl Laemmle, and William Fox, who created the modern film studio to supply the demand for product they believed was there. In 1915, a court ruling led to the dissolution of the Trust, which in turn facilitated the rise of new film studios.

Adolph Zukor's approach of unifying the creation, dissemination, and showcasing of films under a single entity sparked debates regarding the governance of film distribution and the regulation of movie screenings.

Adolph Zukor, who would go on to head Paramount Pictures, crafted an approach to organizing the film industry that mirrored the framework Theodore Vail had set up at Bell. He envisioned an all-encompassing framework in which a solitary organization would manage the entire filmmaking process, from directing the creative talents like actors, directors, and screenwriters, to overseeing the film distribution, and owning the theaters where the movies would be displayed. During his tenure leading Paramount Pictures, William Hodkinson, an advocate for "Paramount Ideals," endorsed the idea of autonomous entities within the sector, marking a significant departure from the unified approach. Zukor's quest for control resulted in a pivotal clash with a consortium of autonomous cinemas known as the First National Exhibitors Circuit, ultimately influencing the trajectory of the film industry.

The block booking system had a considerable impact on both independent producers and cinema owners.

Zukor's pursuit of dominance was characterized by his adoption of a system where theaters were required to purchase multiple films to secure a popular title, a tactic that extended Hollywood's influence for a significant period. Under this system, producers would sell films to theaters not individually, but only in blocks comprising a full year’s worth of product. The unification of cinemas under studio control guaranteed a consistent revenue flow and, at the same time, excluded independent filmmakers and their productions from the market due to the lack of alternative distribution channels. Ultimately, the practice would be condemned by the judiciary, yet its influence was and remains substantial.

Hollywood once followed a unique system for content regulation, often known as its Production Code.

During the 1930s, the Hollywood film industry reached a pinnacle of consolidation with the creation of the regulatory guidelines commonly known as the "Hays Code." Paramount and Warner Bros. were at the forefront of creating movies that featured glamorous, sexually liberated actresses like Mae West, challenging the moral norms of the time. The Catholic Church, along with its Legion of Decency, launched a substantial campaign urging the public to shun films they deemed inappropriate. The film studios, under pressure, formed a group that developed a framework referred to as the Production Code, which serves as a notable instance of enduring private religious censorship extending into the 1960s.

The collapse of the studio system after the Paramount decision.

The Hollywood film industry was found guilty in an antitrust lawsuit brought by the Department of Justice in 1948. The Paramount decree led to a legal requirement for studios to divest their theater holdings, effectively breaking down the long-standing vertical integration within the American movie business. Television's rise and the dynamic competition resulting from its diversification played a major, albeit not exclusive, role in the evolution of Hollywood's film industry.

Other Perspectives

• While Wu points out the tendency of the information sector to create areas of influence, it could be argued that the sector also fosters innovation and competition, as new technologies and business models can disrupt established players.
• The transformation of open markets into controlled industries might not solely be due to influential companies, but also because of natural market dynamics where economies of scale and network effects benefit larger players.
• The Bell System's example as a powerful entity could be contrasted with the idea that monopolies can sometimes lead to efficiencies and innovations that smaller, fragmented industries cannot achieve.
• The role of Western Union in aiding the Bell Monopoly could be seen not just as a failure to adapt, but also as a strategic decision based on the information and market conditions at the time.
• The challenge to Bell's dominance by new competitors after patent expiration could be viewed as a natural and healthy part of market evolution, where monopolies are temporary and innovation eventually opens the market.
• Theodore Vail's vision for a unified telephone network might be criticized for stifling competition, but it can also be seen as a visionary approach to creating a standardized and reliable communication infrastructure.
• The intertwining of AT&T's operations with the US government could be defended as a necessary collaboration for national security and infrastructure development, rather than a simple case of corporate-government entanglement.
• The argument that AT&T's monopoly hindered technological progress could be countered by noting that Bell Labs was a prolific source of innovation, suggesting that the monopoly did not entirely suppress technological advancement.
• The shift in radio broadcasting from chaos to control by large companies could be seen as a natural maturation of the industry, leading to more reliable and professional broadcasting services.
• The emergence of radio broadcasting with optimistic hopes might be critiqued for overlooking the commercial and practical realities of operating a broadcasting service.
• AT&T's excellence in networking and advertising in radio could be criticized for creating a less diverse media landscape, but it also established a sustainable business model for the industry.
• RCA's aim to dominate the broadcasting sector under David Sarnoff could be seen as monopolistic, but also as a competitive response to AT&T's dominance, which ultimately benefited consumers through improved services.
• The creation of the Federal Radio Commission and the expansion of commercial broadcasting networks could be criticized for favoring large networks over small broadcasters, but it also brought order to a chaotic spectrum and improved service quality.
• The rise and fall of Hollywood's studio system could be seen not just as a pattern of control dynamics but also as a reflection of changing consumer preferences and technological advancements.
• The dissolution of the Edison Trust and the rise of autonomous filmmakers could be critiqued for romanticizing the "rebel" narrative, potentially overlooking the Trust's role in standardizing and stabilizing the early film industry.
• Adolph Zukor's approach to unifying film production could be criticized for creating a monopoly, but it also led to the production of higher-quality films and the development of a robust film industry.
• The block booking system, while limiting for independent producers, could be defended as a way for studios to manage financial risks and fund the production of a wide range of films, including less commercially certain ones.
• The Hollywood Production Code is often seen as censorship, but it could also be viewed as a form of industry self-regulation that aimed to maintain certain standards and avoid external government censorship.
• The Paramount decision's impact on the studio system could be seen as a necessary antitrust intervention, but it also led to the fragmentation of the industry and the end of a vertically integrated model that had its own set of efficiencies.