Light capitalism, prize economics, and the prosumer

by bmckernan

A few months ago, Sociology Lens news editor Nathan Jurgenson posted an intriguing article entitled “Facebook, the transumer, and liquid capitalism.” Among the interesting concepts that Jurgenson addresses and illuminates include Bauman’s notion of “light” or “weightless” capitalism as well as “prosumers.” Some recent events in American mass media and popular culture further illustrate these significant insights.

Bauman employs the concepts of “light” and “weightless capitalism” to describe the contemporary trend towards a market centered on “lighter” exchanges such as software as opposed to “heavier” products such as automobiles and refrigerators. As Jurgenson’s article expertly highlights, the massive popularity of social networking websites such as Facebook and the online movie rental website Netflix strongly reflect this trend.

Jurgenson’s article also elaborates on a key insight in this trend towards “weightless capitalism” – the utilization of a “prosumer,” meaning an individual who helps produce the content which they ultimately consume. Such a concept accurately describes the operations of Facebook and Netflix. For Facebook, a significant portion of the content provided on the website is user-generated, including blog entries and photos. In the case of Netflix, while the DVDs themselves are physically (or virtually through streaming video) distributed by the company, the website’s valuable recommendation system is at least in part maintained by user ratings and reviews.

This reliance on “prosumers” for many contemporary corporations problematizes the traditional distinction between employer and consumer. While these “prosumers” are not directly being paid for their services, they are certainly contributing to the overall popularity and financial success of the products they are consuming. As noted in the intro, some recent events further illustrate this blurring of positions.

On June 27, Netflix announced a team had finally met all the requirements to win their $1 million contest. As a NY Times article covering the announcement notes, nearly three years earlier Netflix had announced the contest, challenging contestants to improves the accuracy of the company’s existing movie recommendation software by ten percent. Wanting to improve the software makes sense from a business-standpoint for Netflix. Netflix operates as a subscription service, and providing its users with movie recommendations that they will hopefully enjoy helps persuade consumers to continue the service long after many of them normally would. What is interesting about this case is that Netflix did not tackle this project internally, but instead opened it up to the public via a $1 million contest. The NY Times article refers to this event as an example of “prize economics,” where a contest is run at a fraction of what it would cost to develop and employ the innovations internally.

A somewhat similar event recently occurred in the world of video games. Blizzard, the makers of some of the most globally popular PC games, announced that in the highly anticipated sequel to the globally successful Starcraft, users would be able to create and sell their own maps for the game via Blizzard’s website. Creating and sharing customized maps for video games is not a new phenomenon, but rarely in the past have video game publishers allowed their users to legally sell user-generated content. However, as is the case with Netflix, encouraging users to produce additional content by allowing them to charge a small fee makes sense from a business perspective, as many PC gamers expect continued support and expanding content from the games they purchase.

As these two cases hopefully illustrate, it will be interesting to see if this “prize economics” shift persists and expands alongside the “prosumer” phenomenon in today’s increasingly “light” form of capitalism.

Liz Mcfall “How Useful Is the ‘New’ New Economic Sociology for Understanding Market Attachment?”