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A response to Stewart Butterfield on Web 2.0 hypocrisy

In my post in response to Kevin Rose’s proclamation about Digg, del.icio.us and Flickr being “true, free, democratic social platforms devoid of monetary motivations”, in which I talked about “the hypocrisy of the Web 2.0 generation”, Flickr’s Stewart Butterfield added the following comment:

“Ian, surely this statement is as dumb as the one you’re criticizing? That can’t be your considered opinion as to the dynamic between, say, Flickr and the people who use it.

There’s a distinction to be made here between some of the Web 2.0 sites and others. Flickr, for example, has value to the user even if you have no other people using it. It stores your photos, makes them easy to find and categorise, and shows them off to the world. In other words, if all I do is store my photos on there, it has value to me. The same is true of del.icio.us: even if I am the only person using it, there’s value to me there as a place to store bookmarks across machines. Of course, both services gain value if more people use them. But, as Bill Gates has pointed out, so does Microsoft Office: the more people use it, the more people can read Office-formatted documents, the more value the product gains as a ”lingua franca“ for electronic document interchange.

The social aspects of Flickr, while great, aren’t necessary for it to have value. It’s an online photo service, and on that level no more or less ”Web 2.0“ than Yahoo! Photos was/is.

Services like Digg and Netscape, on the other hand, have precisely zero value other than as aggregators of user-generated content. ALL they are is an aggregation of content created by users. The vast majority of their value to each individual user comes from the fact that lots of people contribute to it. And yet, up till what we might call ”The Calacanis Moment“ there was no recognition in any meaningful sense that the vast majority of the value of the site was created by the users themselves. Sure, there was lip-service paid to it, but who made the money? Not the people who gave the site value.

While Flickr and del.icio.us are analogous to traditional software services, Digg and Netscape are more like magazines that don’t pay their contributors. They’re the small press of the internet era, with contributors who are expected to ”do it for the love“. But, like all successful small press publications, there comes a point at which you have to stop expecting people to do it for the love and start paying them for the value they add to ”your“ publication.

Kevin’s hypocrisy is this: he’s implying that  people should and will continue to do it for love, because they feel like the site belongs to them. Yet, of course, the site doesn’t belong to them – it belongs to him, and he will sooner or later make money from it. You can call that hypocrisy, or you can call it the oldest Capitalist trick in the book. Either way, it smells bad.

So was it fair to lump together everyone who thinks of themselves as ”Web 2.0“ and call them hypocrites? On one level, no: there’s a clear distinction between sites that gain all their value from user-generated content (like Digg) and those that offer a service that would be valuable even if only you were using it (Flickr, del.icio.us).

But on the other hand, there’s a steep resistance amongst many in the Web 2.0 world to recognising that the ”collective intelligence“ that their sites harness creates much of the value of their sites – AND that it should be compensated for its time and efforts in dollars, not ”love“. There’s constant talk of ”openness“ and ”democracy“, and yet there’s an emerging class of ”site owners“ who are happy to talk of democracy and take all the money for themselves. To dive back to Marxism 1.0, they’re the owners of the means of production: the taggers and the diggers are the proletariat. It’s time the capitalists recognised that the workers need to get paid.

Comments on this entry are closed.

  • http://profile.typekey.com/dcharti/ David Chartier

    Very well put. I don’t see the problem with getting paid to do what you enjoy doing either. However:

    “It’s time the capitalists recognised that the workers need to get paid.”

    Maybe the workers don’t NEED to get paid, but the option should be there in one form or another.

    As a disclaimer: I’m a blogger for Weblogs, Inc. I’m also both a reader and user of Digg and Netscape. Before I worked for WIN, I was essentially writing about the same stuff on my own personal sites. Does that mean that, now that I write for WIN, my writing has somehow been tainted or biased? Certainly not. I simply am lucky enough to be getting paid for doign something I thoroughly enjoy. It’s starting to sound like there’s a lot of people out there who have never experienced this. To those who have the opportunity: try it. You just might like it, and you can stay true to yourself and the community to boot.

  • http://flickr.com/photos/stewart Stewart Butterfield

    I think it gets even more subtle than that. Let’s say, on average, Digg earned $5 annually for each person using it (I think that number is extremely high, but just to illustrate the point …)

    If Digg gave the $5 (on average) back to each of the users, then it makes nothing. Not much of a business. But it gets worse.

    Practically speaking, it might cost $20 or $30 to pay each of those users the $5 (for US citizens, it’d have to collect their SSNs ro EINs, report the earnings to the IRS, hold money in account, introducing all kinds of new accounting costs, collect people’s addresses and mail a cheque or arrange for ACH transfer, paying fees on all of it, etc.) That’s just not practical.

    On the other end, let’s say Digg loses $2 per user. In the interest of democratically sharing everything, shouldn’t everyone be required to pay?

    What if it got hit by a lawsuit for some reason and had to pay a $40m judgement? That’d come out to $100 per registered user (based on the last figures I heard). Shouldn’t every user have to kick in? Does it seem fair that if I registered on a lark, posted one item to the site, dugg a couple of articles and then forgot about it, I’d accrue this liability?

    Of course not – and I’m sure you agree. But to me, that sounds just as silly as the idea of trying to pay back all the value generated by each user. If we reckon they are entitled to the benefit then they should also accept the risk.

    The reason I pointed to The Onion article about trendsetters going on strike is that a lot of the value generated by people through their use of Flickr specifically is not simply because they put their photos there. That *costs* us money (cpu time for image processing, storage costs, bandwidth, etc.) and we don’t get any rights to the photos.

    But, a lot of people storing their photos there and making them public or using them on their own blog and linking back, etc. does give us a lot of publicity. This publicity, as far as I’m concerned, is not qualitatively different than the publicity generated by branded clothing or accessory or auto makers having people buy their products and then walking around with a giant TOMMY HILFIGER on their chest or an LV bag or a parking their distinctive Audi on the sidewalk of a busy street.

    To be totally clear, I have no problem with what Jason is proposing and I think Kevin’s response wasn’t very well crafted — but I think they are both legitimate models, and I don’t think for a second that Digg is unfair or sneakily trying to exploit anyone.

    Thousands of Flickr users have started making money off their photos as a result of using Flickr (some even making the transition to supporting themselves from their photography).

    Even though we have no marketplace system, there are hundreds of photo editors and designers, etc., who search Flickr and get in touch with photographers directly. And there are lots of people who get noticed and then get requested to shoot weddings and other events. I think this is great, and I don’t believe they owe us anything for it.

    But I am absolutely certain that if we had started Flickr on the premise of “post your photos here and we’ll pay you for it” we never would have gotten anywhere. A few people would have done it to get the cash, but it wouldn’t have taken off, and there wouldn’t be Flickr meet-ups in Kuala Lumpur and Birmingham and Cape Town and Tehran as there are now. It wouldn’t have worked out as well for us, or for our users.

    Finally, no business will have any value if it doesn’t have customers. This is as true of General Motors as it is of Digg. But when GM offers $2000 CASHBACK ON 2006 MODELS in their LABOUR DAY BLOWOUT, that’s not “compensating” GM buyers for the value their patronage generates for GM – that’s GM and GM Finance’s marketing working. And it’s the same thing with Netscape.

    Netscape’s plan is not to *just* make $20,000 a month (20 x the $1,000 each they’d be paying users). This might be 20 people out of, they’d hope, an audience of millions. They’d be getting paid a small fraction of the revenues they are helping to produce. I think Jason’s proposal is very clever and good marketing, but I don’t think this is something that is being done to remedy an injustice … and if it was, it’d be a terrible remedy.

  • http://technovia.typepad.com Ian Betteridge

    Stewart, you’re completely right that giving each Digg user $5 wouldn’t be practical. What I’m objecting to, though, isn’t the actuality of making money off the efforts of the users (after all, I too am a capitalist), but the rhetoric of “free, democratic and open”. However, it’s worth noting that there’s plenty of models that reward the creators of value without exposing them to the risk of significant loss. In fact, we use one of them for business ownership: it’s called “limited liability companies” and it allows the owners – the shareholders – to be exposed only to the risk of losing their initial investment. But I’m sure you know all that :)

    As I’ve stated elsewhere, I’m not sure that Kevin is sneakily trying to exploit anyone: in fact, the reason why I titled by original opposed as a call for Kevin to “get a grip” was because I want him to realise that it’s a business, and conforms to the standard ways that business works – something that Jason clearly realises (as do you).

    It’s interesting, too, that many of the arguments you make are familiar from the traditional print publishing world. There’s many times I’ve heard that, while a publisher can’t pay me anything, “I’ll get valuable exposure that will get me more work”. And for some people, that is perfectly true and worth doing. I’ve done work for magazines for nothing (or as good as) because I support what they’re trying to achieve and know that they’re making nothing out of it. But if I thought for a moment that they were going to soon be taking the business public or selling the title to Conde Nast, I would be rather more reluctant to give away my work for nothing.

    Should you be paying your top 100 contributors? Maybe you should think about it (although of course how you’d work it out who your top 100 contributors is itself interesting). But, as I said before, there’s a difference between a site like Flickr, which offers a tangible service, and something like Digg which is nothing more than the sum total of its user’s contributions.

  • Michael Chui

    Of interest is a counterpoint:

    http://community.livejournal.com/essays/6515.html

    Once people begin to get paid for it, they’ll never do it for the love again.

  • http://technovia.typepad.com Ian Betteridge

    Interesting counterpoint, Michael (thanks!), but it’s not borne out by the experience of other communities. Many small-press print magazines exist where people don’t work for money, but for love, or community, or because they want to ultimately make a career out of it but need credits. The advent of getting paid to write didn’t mean the end of people writing for love.