Matt Webb’s musings on the sale of Instagram, invoking the labour theory of value and comparing modern social networking sites to company towns, prompted a bit of a spat on Twitter last week between yours truly and Tom Coates, someone for whom I have a huge amount of respect. (Phil Gyford added his own thoughts afterwards, which are definitely worth a read before you go on.)
Specifically, Tom objected to my suggestion, drawing from Matt’s argument, that the activities of soc-net users were already being viewed explicitly in terms of their monetary value, and that it was only a matter of time before the users themselves start asserting some kind of claim. His tweets, collated:
How on earth do you ‘earn’ money by talking to friends or sharing photos. You don’t.
A company that creates a space or an environment or takes on risk does, and it gives you stuff in return.
So the people using these services get nothing out of them? They need to socialize for a cash share of a company?
Do we expect a proportion of our TV company’s revenue? Are we ‘workers’ when we watch TV?
Now, I’m not a subscriber to the labour theory of value, but I do believe in what you might call the ‘value theory of value’. There’s clearly a billion dollars of value somewhere in Instagram: specifically, a billion dollars of value to Mark Zuckerberg, which admittedly exists on a scale all of its own. From there, the obvious follow-up is ‘what does Mark Zuckerberg value?’, and we can make a pretty decent guess based on how Facebook operates. When your business model is based upon swaddling and commodifying the sharing of personal information and social interaction, I don’t think it’s too outrageous to suggest that the participants may start to wonder what they’re worth.
But I’ll turn to Tom’s questions in reverse order. Stripped down to the basics (that’s to say, free-to-air networks as opposed to subscription services) the transactional model of commercial television works something like this: a television network pays for programming with the intention of generating a particular audience, the promise of which it uses in turn to sell advertisers the right to interrupt; the audience, in turn, accepts this right to be interrupted as the cost of watching, or pays for services and technology that reduce or remove those interruptions, or treats them as a cue to put the kettle on.
I don’t think that model applies to social networks at all. Television audiences are mostly non-participatory, unless you extend the definition to include ‘viewing time’, which seems so broad as to be meaningless.
However, within that wider framework, there are specific programming models that seem more relevant. Take, for instance, the You’ve Been Framed / AFV format: global in reach, hugely successful, a big broad family-friendly slapstick-loving demographic for advertisers, and most importantly, really bloody cheap to make. Got a video of a bridesmaid falling face-first into a cake, or a cat singing along to opera? Send it our way, and if we show it you get paid. If it’s especially funny, we invite you to come and watch, churn up additional time making fun out of you, and you might get even more money in return. Don’t think too hard about how your half-minute clip or two-minute audience segment costs us what we’d pay for half a second of CSI: My Arse.
These programmes wouldn’t exist without enthusiastic participation from their audience, but they thrive on the asymmetry of corporate and personal finance: paying ten grand to the best video of the week is cheap for the producers, but it’s a lot of money to the parents of little Jimmy who got filmed making a funny face.
It’s this disparity, assisted by cheap video technology that further lowers the barriers to participation, that underpins the rise of reality television over the past couple of decades. It even extends beyond the standard network broadcast model: a more distasteful example would be the Girls Gone Wild series, as documented by Ariel Levy for Slate, which offers t-shirts, baseball caps and large quantities of alcohol in exchange for filmed nudity and a scrawled signature on a release form, all presumably at a cost much lower than that demanded by industry professionals. This, of course, is much easier to dismiss as ugly exploitation, given the question of informed consent when hammered on margaritas.
In short, television and video already compensate audiences when they become contributors, thanks to the comparative bargain that producers get from converting them into the source of programme content. Social platforms, for the most part, strike an even better deal, thanks to the transactional relationship established in the terms of service that you skipped over when you signed up.
Which leads us to objection two: aren’t users of a service compensated by what they get out of it, making it a fair deal? Again, up to a point, but the perception of fairness is shaped by preconceptions and expectations about the ongoing relationship between a service and its users, all the more so when the users are actively providing shared content.
Consider CDDB. It’s something I’ve cited more than once, because I think it sets an interesting precedent. Although created in the early days of the web, it acquired new value with the emergence of the MP3 format in the mid-90s, because it offered an elegant tool for digitising one’s music collection built upon collaborative effort. While CDs contained no metadata on the disks themselves, CDDB used the track information to generate a (nearly) unique signature that could then be submitted to an online database; if the signature already existed, the database would confirm the title and artist, then fetch the appropriate track data; if a match couldn’t be found, you’d be invited to fill out that data yourself and submit it to the database for others to benefit.
This was the era of Slashdot and Winamp and fly-by-night FTP ratio sites, when a large section of web users blended their growing interest in open source development with an awareness that higher bandwidth and efficient file compression made storing and sharing music libraries as feasible as downloading the latest Linux kernel. CDDB’s server software was GPL-licenced; its signature-generating code was freeware; its database could be freely mirrored (and for a while, was declared to be under the GPL as well); and the developers of players, rippers and encoders rapidly incorporated its features into their software, automating the process of querying the database and simplifying the submission of new entries.
In 1998, the maintainers of the original codebase and master database incorporated the service, then sold it for an undisclosed sum to a relatively obscure consumer electronics company called Escient. The immediate reaction was mixed: goodwill for the project’s founders, some concern for its long-term fate under new ownership, a certain amount of disquiet that the freely-provided content accumulated over five years obviously counted as much in the acquisition as the backend that made those contributions possible.
Within a year, the licence for accessing CDDB was drastically revised in ways regarded as an attempt to monopolise the market; by 2000, the service, spun off and renamed Gracenote, shifted to a new, proprietary format and began demanding licencing fees from developers, sending patent violation warnings and filing lawsuits. The heavy-handedness of this approach (for instance, demanding the display of the CDDB logo during lookups, which was unfeasible for console-based players) spurred on the creation of alternatives that would avoid the same fate. Gracenote is now owned by Sony, and provides (under licence) the track-identification capabilities of iTunes and other major music players; FreeDB maintains the old, GPL-licenced format; another alternative evolved into MusicBrainz, which uses a different approach to identify tracks, and operates through a non-profit entity committed to free, unrestricted access.
For the most part, the people who primed CDDB’s database and adopted its open-sourced features were comfortable with the project’s founders benefitting financially, given that they were the ones who’d sustained the core service as it scaled dramatically. They certainly didn’t think of themselves as ‘workers’ entitled to a share of the spoils, but neither was it recreational: they were volunteers, small-scale collaborators in a mutually-beneficial project. What chafed in the aftermath was the sense that the founders’ reward was being clawed back through rent-seeking and increasingly restrictive conditions on developers, which by extension affected users — in essence, biting the hand that fattened you for market. Volunteered effort approaches the condition of work when it becomes a means by which others profit from it, but what truly changes the characterisation of those contributions in retrospect, whether it’s from typing up your music collection in the small hours or baring your breasts at a party during spring break, is being made to feel like a sucker.
The comparison to Instagram isn’t straightforward, for reasons that Phil outlines in his post, but there are ties that bind. The decade-long evolution of social networking has embellished the dynamics of contribution, so that value adheres not just in the accumulation of content, but in the direct mapping of content to users, and the presence of user content as a catalyst of user presence. That’s a high-falutin’ way of saying that social networks aim to create non-replicable spaces: you go to CDDB because that’s where the track listings are, but you go to Facebook or Instagram because that’s where you’ve put yourself.
In that context, to objection three: that companies who invest financially in the creation and maintenance of collaborative online spaces, on account of taking on risk, earn the rights to the financial spoils, while users engaging in social activity in those spaces earn… the right to toast those companies’ success and keep using them. Now, I count many smart, bloody hard-working people in the social startup world as my friends, Tom included; the more richly rewarded they are, the better for everyone. Give them your money. All that said, I’m uncomfortable with that kind of forthrightness, and with attempts like that of Derek Powazek to cast it as a distinction between ‘work’ and ‘play’. To call user activity ‘work’ may be a stretch; to call it ‘play’ feels like a dodge, even if it’s not meant that way. It’s a troubling polarisation, with the potential to lock down the conversation about the tangible and intangible value of social networks. Call it participation, call it contribution: what makes these kinds of user activity tricky is that they’re neither work nor play, and admitting that in no way delegitimises the talent and gumption of the startups that facilitate them.
And so, by a commodius vicus of recirculation, to South Park and Environs. Simply by virtue of its acquisition, Instagram has become a commoditised space, cumulatively worth 0.01 Facebooks on the ‘what Mark Zuckerberg values’ scale. What distinguishes Instagram from Hipstamatic and Camera+ on that scale (discussed by Gruber over the past fortnight) is its concentration of presence in a networked space that is explicitly public by default, a de facto broadcast platform, although one obfuscated by the lack of an official web interface. Flickr offers an archive of photographs; Instagram serves as a repository of presence.
We understand the transactional model of paid or premium services; we’re still coming to terms with the transactional model of ‘free’, particularly in social networking; we know that our contributions bring value to those services even as we draw value from them, but have no way to quantify whether we’re being (or about to be) suckered; all we know for sure is the amount paid to acquire the collective rights.
When we contribute to social networks, we do so under terms that are both like and unlike those of employment: under those terms, it’s ultimately not the pay (or lack thereof) that matters: it’s the conditions.
 Then again, Boobstagram.
 Amazon acquired IMDB around the same time; from memory, it didn’t generate as much fuss, because the maintainers had spent a decade keeping it going, but perhaps it should have. (Update 22/04: Lee Maguire suggests, via email, that the muted reaction extended primarily from IMDB’s non-commercial licencing and open interfaces to the database, which makes sense to me.)
 A trickiness that Derek knows well, given the initial reaction to Pixish.
 Although thinking about it, I’m reminded of the very earliest Flash-based incarnation of Flickr, which suggests an interesting reversal from the web of 2004-5.