chapter  3
26 Pages

Web 2.0 and the death of the blockbuster economy: Des Freedman


Every era has its own zeitgeist titles and the current one, based on the transformative power of the web, is no exception. Enter (physically or virtually) any bookstore and you will be dazzled by The Wisdom of Crowds; Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business; Wikinomics: How Mass Collaboration Changes Everything; We-Think; Here Comes Everybody: The Power of Organizing without Organizations; and The Art of Community: Building the New Age of Participation. These titles are premised on the idea that social media, online platforms, digital technologies and collaborative networks have fundamentally changed the ways in which we socialise, amuse ourselves, learn about the world, conduct public affairs and, above all, do business. They are the popular economics literature of the Web 2.0 world in the same way that, a decade earlier, The Death of Distance; The Weightless World; Living on Thin Air; and Being Digital epitomised the heady optimism of the ‘new economy’ that was said to be emerging in the 1990s (before the millennial dotcom crash). This chapter examines this literature and explores the claims that the internet

facilitates a media economy based on niches and not mass markets, on flexibility and not on standardisation, on abundance and not scarcity, and on entrepreneurial start-ups and not on the industrial corporations that dominated the twentieth century. Online logic is conceived by theorists such as Chris Anderson (2009a, 2009b), Larry Downes (2009), Jeff Jarvis (2009), Charles Leadbeater (2009), Clay Shirky (2008) and Don Tapscott and Anthony Williams (2008) as adhering to a totally different set of operating principles in which the internet (based on bits and not atoms) will put an end to the rule of monopolies and inspire more decentralised and customised networks of media flows. We will no longer have media concentration but media dispersion, where access to niche markets and endless back catalogues will satiate the public’s desire for individuality and unlimited choice. Back in 1996 the MIT technologist Nicholas Negroponte predicted that ‘[w]holly new content will emerge from being digital, as will new players, new economic models, and a likely cottage industry of information and entertainment providers’ (1996: 18). A decade later, Chris

Anderson, editor of Wired magazine, the chronicler of the web revolution, now saw fit to highlight ‘the economics of abundance – what happens when the bottlenecks that stand between supply and demand in our culture start to disappear’ (2009a: 11). These trends are, however, by no means confined to the media or entertain-

ment sectors but are now seen to be forces impacting on the wider economy: lowering transaction costs, stimulating innovation, collapsing barriers between producers and consumers and indeed handing a much more productive and integral role to what were previously seen as rather passive customers. For Jeff Jarvis (2009), Google provides by far the best role model for any company operating in the new, digitally enhanced business era: it has changed ‘the fundamental architecture of societies and industries the way steel girders and rails changed how cities and nations were built and how they operated’ (2009: 27). For Tapscott and Williams (2008), the online encyclopaedia Wikipedia best encapsulates the possibilities and relationships offered by ‘new models of production based on community, collaboration, and self-organisation rather than on hierarchy and control’ (2008: 1). Whatever their respective conceptual startingpoints and political objectives, many Web 2.0 commentators coalesce around the notion that web culture is ushering in a far more efficient, creative, smoother, democratic and participatory form of capitalism: ‘A new mode of production is in the making’ (Tapscott and Williams 2008: ix). This chapter assesses the underlying dynamics of a new digital mode of pro-

duction and interrogates the technological and economic principles on which it is based. Inspired by more critical accounts of the internet’s recent history (for example Fuchs 2009; Sylvain 2008; Zittrain 2008), it examines the economics of abundance in the light of current trends in online distribution and consumption and considers whether the theorising of a ‘niche economy’ can account for residual patterns of conglomeration and concentration in the online world. In acknowledging the contradictory trends towards diversification and massification and towards specialisation and generalisation in the emerging online media economy, the chapter attempts to integrate the hugely significant developments of the online era into an older account of capitalism as a system in which innovation, creativity and, indeed, everyday economic performance are structurally subordinated to the needs of the most powerful interests operating in the marketplace. The pipes may be increasingly digital, but the piper is still being paid and looking to make a profit.