Organizing Dialogue, Experience and Knowledge for Complex Problem-Solving

The Business Model of Social Media: Who Owns the Presses?

October 1st, 2012

What power do citizens of these communities have?

When Karl Marx asked: Who owns the presses? he was referring to the ability of wealthy private individuals to control the means of knowledge production and dissemination and thus, influence society as capital owners, not as citizens. The unequal voice of the bourgeoisie over the proletariat was what gave them undue social power. But what happens when the owners and generators of wealth (knowledge, information) shift and the result is a community that relies on the medium of production without the control of it?

Owning the presses

Social media presents something quite unusual when it comes to the traditional views of ownership and wealth creation. It also upends the traditional perspectives of journalism and marketing, where the content is co-created and edited, emergent and distributed through a mesh of networks, uncontrolled. It is a new space for which traditional models of ownership, rights, responsibilities, and governance are all joined up in something that is similar enough to have familiarity, yet different enough to be alien at the same time. It’s not a wicked problem, but it does contain some problem wickedness.

With social media, the messages are that of the users, arguably creating the most democratic (or at least free) environments for communication. Although hosts such as Facebook, Google, and Twitter have occasionally squelched certain users’ voices for reasons of legality, politics or questionable fit with their “community values”, most of what happens on these platforms is up to its users. That is what makes social media as powerful as it is. Social media is nothing without its users’ content.

My definition of social media is:

Social media is any networked electronic media that derives its principal value from user participation

Yet, this does not render Marx’s question about press ownership irrelevant when updated to today, rather it changes the answer.

It’s paradoxical in that the very market forces of competition that can seed innovation and the mechanisms provided by venture capital and capitalist investment is the reason we have the social media platforms we do, yet the manner in which it is governed is much like that of socialism at best, communism at worst. Investment of private financial capital has helped raise the profile and capability of social media companies to leverage social capital. It is why open source, community-owned or shared tools like Diaspora* or have come nowhere close to replacing Facebook and Twitter respectively. The free market creates the tools, yet  it is not the free market that sustains the community created by those tools, nor can it fully account for how to grow the capability of those tools.

It is also because these companies operate within markets rather than as national projects, that they can disseminate globally with relative ease. Thanks to this dissemination, citizens living in oppressive media environments can reach out and connect with those outside of such spaces allowing things like the Arab Spring and increased freedoms in Myanmar to emerge with greater outside support than had these tools not been available.

The cost of free

While social media has done much to enhance democracy movements, human rights watches, and access to information, there is a slight problem . The most widespread social networks are all free to use, which means that they need to generate revenue from sources other than user fees, which usually means advertising. And advertising means clutter, clutter leads to confusion and that turns people away (witness the loss of viewership from TV at a time when perhaps the highest quality productions are being aired ). But unlike television, there is a social cost to free with social media. Human capital in the order of millions of hours of time and a similar amount in dollars is spent creating the very content that allows social media to survive and thrive.

With the relaunching of MySpace we are reminded of how far social media platforms can go up and down. Just a few years ago, MySpace was the darling of social media with millions of users and lots of press. Hundreds of thousands of hours of individuals’ time went into making and maintaining MySpace pages, resources that are now, ironically (given Justin Timberlake’s involvement in the platform) Dead and Gone.

It can be argued that similar deep investments of time in building and maintaining Facebook pages, timelines, and Tweet projects exist. What if these go away?

Or what if they become unusable? Anyone who has spent time on Facebook (which is a few hundred million people strong) has seen the steady creep of unsolicited content emerging in their news feed. This includes notices about pages you may like, game invitations, increased posts from companies or services you chose to “like” and more. Facebook needs revenue to justify its initial valuation and a big focus now is on the mobile experience where an increasing amount of its traffic is now generated from. The problem is that mobile ads are even more distracting than those on other systems because of the smaller screen size and different interface. It is difficult enough to surf the content on a laptop, let alone a handheld device. If you think your desktop version of Facebook is cluttered, imagine what the mobile version of that could look like?

Facebook is rapidly becoming a ‘necessary evil’ for me and others like me. I have few other means of communicating with certain people other than Facebook. This should be a good thing for Mark Zuckerberg and company, right? Maybe not. For some, there is little joy in using Facebook anymore as it gets swarmed with messages and the endless quest for likes and attention from those who are not even your friends. The result is that more people in my circles are reducing their use of Facebook or breaking from it altogether largely because it holds far less esteem than other brands such as Apple or Google. There is a brand cost to Facebook’s decisions.

The brand is not the only thing that costs; there are hidden social costs as well. Among those vying for likes and attention are charities, non-profit, health and social service groups who have opted to spend precious resources on building up profiles on social media, curating content and relying on platforms like Facebook and Twitter for building their brand, relationships or using it as part of their internal and external communications. They are doing this because that is where the most people are and they feel the pressure to go where those numbers are, even if they are fickle (see MySpace).

Should we care?

The business model of social

One answer is: it doesn’t matter. Social media companies are businesses and it is their prerogative to make money. However, there are real social costs associated with this drive for profit in the social mediasphere. If people start fleeing Facebook or can’t manage Twitter because of restrictions or choices made based on that company’s market optimization plan (e.g., advertising, relaxed privacy etc..), then the social capital created through those services decreases, requiring the increase in new social and financial capital to support something else. For those that sought to dive into social media this means retraining staff, retooling media platforms, redesigning messages, and in some cases rebranding entirely to suit the next big thing. This costs real money.

While it is bad enough that individuals lose their social investment, this has bigger implications for health care and protection providers, charitable organizations, social service groups and alike others who all rely partly on social media for communications and relationship development. A recent paper in the Journal of Medical Internet Research looked at the factors influencing social media adoption among physicians. In that study 58% of physicians surveyed said that social media enabled them to look after patients more effectively, and 60% said it improved the quality of the patient encounter. It has taken a long time to get health care professionals on board, but the stability and relative ubiquity of platforms like YouTube, Facebook, and Twitter have made investment in social media a safer bet.

Sure, media changes and evolves, but what we are seeing with social media today (particularly the largest players) is something never seen before. There is a global scale that has fundamentally altered the communications landscape. Facebook and Twitter are not just tools, they are platforms not unlike email and that makes them different.

Virtually every successful social media platform has started out as free, uncluttered and focused on building a user base. And every one of those faces the question: what is the business model? Advertising will only go so far and the efforts to engage in ‘promoted’ anything (tweets, videos etc..) can run the risk of turning a medium based on authenticity into something much less so.

What alternatives? More questions.

We face a situation where the very entrepreneurial spirit and funding through capitalism has produced a somewhat self-governed media system run by workers who produce the knowledge, which is like socialism. All ‘ism’s’ aside for the moment, there is benefit to having conversations about the ownership and control of the social media presses in an era where the media is more than just the messages and  now integral to many of the operations and livelihoods of organizations and individuals who do not work for social media. There is a disjuncture between ownership, the means of production, the workers, and the product that doesn’t fit any previous model posed by Marx, Adam Smith or anyone.

Unlike the coal miner and their families that lose when the mine shuts down, there is some foresight available to them knowing that they are in a particular industry. For social media users, their communications are just part of their life not a part of their industry.Put another way, consider email. Right now, if your email service is failing you or fails as a business you have the ability to get a new one without disrupting your experience of and access to the medium itself. Gmail, Yahoo! or any corporate mailserver will generally produce the same thing even if the interface and management of that experience varies. We don’t have real alternative to Facebook or Twitter right now. When over a billion people use these services it is time to ask: should we? Can we? Is that a good idea?

Is social media getting to be an ‘essential service’?

Does social media belong in the commons? If so, will that inhibit the necessary innovation sparks that led to the development of the current tools in the first place? Who would manage it?

If these went away, what would replace it? Or will we see a bubble and lose so much trust in a collapse that these tools fail to regain interest?

Should we pay for social media in exchange for better usability and less clutter? Will anyone who had it for free do this? And who is left out of those social worlds if they can’t pay? Right now social media’s great asset is that anyone can join and join to anyone else who allows it. Nationalism, politics, financial means, sex, race, gender all don’t matter in terms of fundamental access, but that could change.

Would my Twittersphere be less if only people like me were on it? What kinds of conversations wouldn’t take place?

If we all provide the content and labour, should we have a say in who owns (or runs) the presses in a world of social media?

What would Marx and Adam Smith think of all of this? Maybe if they were here today they could Tweet a debate on it.

Filed under: business, innovation, social media Tagged: advertising, business model, capitalism, Facebook, innovation, Karl Marx, marketing, markets, social media, socialism, Twitter

Leave a Comment

Categories: advertising, business, business model, capitalism, facebook, innovation, Karl Marx, marketing, markets, Social media, socialism, twitter

Leave a Reply