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Who profits from user-created content?

Almost exactly a year ago, Jeff Jarvis asked “Who owns the wisdom of the crowd?” in regard to the “user generated content” sites like del.icio.us and flickr (both of which had been purchased by Yahoo). If volunteers create value for DIY Media sites, and the owners of the sites reap significant profits, do the volunteers deserve a cut of the action? I was reminded of this issue when I read this long post from Henry Jenkins and his colleagues about the Youtube acquisition, raising similar questions:

This is an issue I raised here a few weeks ago. At the heart of the Web 2.0 movement is this idea that there is real value created by tapping the shared wisdom of grassroots communities, composed mostly of fans, hobbyists, and other amateur media makers. I have often celebrated these efforts as helping to pave the way for a more participatory culture — one that will be more diverse and innovative because it expands the range of content we can access. Yet, as I suggested here a few weeks ago, there is a nagging question — if these grassroots efforts are generating value (and in fact, wealth) and their creative power is being tapped by major corporations, at what point should they start receiving a share of revenue for their work?

We have all seen major media companies telling us that file-sharing is bad because it takes other people’s intellectual property without just compensation. So, why are these same companies now taking their audience’s intellectual property for free? Do we understand their profits primarily as a tax to support the infrastructure that enables their distribution?

What do YOU think?

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6 Comments so far

  1. hopperanalytical  »  November 3rd, 2006 5:50 am  » 

    I can’t help but think of the introduction of a similar idea in academic publishing a few (hundred) years ago. The idea that researchers would publish their hard-earned findings for free (with recipe attached) was a radical concept, but those trumpting this free exchange believed strongly that science could only move forward through a transparent and open exchange of ideas.

    Let us not forget the inherent value that participants reap in this process of contribution. It can be so powerful that when sites try to redistribute revenue as part of the participatory incentive, it can even backfire and disenchant.

    Having said this, I do believe we will continue to see natural shifts away from disingenuous aggregators and towards services that vow to be open and ‘owned’ by the particiants (revenue sharing not withstanding).

  2. Hamish MacEwan  »  November 3rd, 2006 11:56 am  » 

    Like most things on the Net, let the user decide. If they have concerns about the aggregator/platform provider benefiting, don’t contribute. If your contribution isn’t satisfying without remuneration, don’t contribute.

    Otherwise, the individuals cost/benefit analysis shows that they are benefiting and all the 3rd party hand wringing over “exploitation” is unnecessary.

    The Internet allows efficient harvesting of what I call “sweat,” an other wise useless by-product. If this were possible in the real world, to the point where useful critical mass arose, would you expect to be paid for it?

    I don’t get paid for this, but neither did I pay for your insight.

    This “politics of envy” dog in manger approach that seems to be gaining more advocacy as successes like Digg and Google arise is a bit disappointing.

    There are more ways to gain than cash.

    Hamish.

  3. Sam Rose  »  November 3rd, 2006 3:24 pm  » 

    The enablers/platform providers seem to have the balance of deciding ownership in their favor. Sure, people can opt not to use a service. But often, people don’t exercise that option. People tend to use the popular sites, that “own” the crowd wisdom, because everyoen else is usign them.

    However, looking around the corner, I can see that it won’t be too long until people will be able to lease a server, and click on a button and create their own hosted “YouTube”. It’s not out of reach for someone with server setup/config experience: http://blog.kovyrin.net/2006/10/08/lighttpd-memcoder-flvtool-for-streaming/

    Nor is creating your own social bookmarking site out of reach. http://de.lirio.us/code/

    So, the barrier to being the “enabler/platform provider” looks like it will become lowered, and hundreds of thousands (potentially millions) of people will be able to host more and more user-created content sites for very little money (20-60per month), which is already possible now, actually. We may see thousands of smaller grassroots “YouTubes” pop up, and people may figure out some way to connect them all together in findable and navigable and useful ways. That bricolage of mini-DIY “YouTubes”, if connected in meaningful ways, could compete with the monolithic providers.

  4. Greg Wolff  »  November 3rd, 2006 7:30 pm  » 

    Howard,

    Who profits from water flowing in a river? Who owns the river?

    Imagine a landowner with a river flowing across her property.
    In most cultures with private propety, ownership of the land means
    that she can prevent other people from trespassing on her land to
    access the river.

    Does this mean that she “owns” the water in the river? Does she begin
    owning the water when it crosses on their property? Does she lose
    ownership when the water leaves her land or can she control what
    landowners living downstream can do with “her” water?

    The “wisdom of crowds” refers to the dynamic interactions between
    people.
    Those interactions live as “content,” recordings of
    communication between people. Like buckets of water flowing together
    to form a river, it’s useful to consider the properties of the content
    and the channels seperately.

    In the cultures I know, water rights differ from land rights. Even
    though water flows across your land, people living downstream may have
    claims on that water. Yes, you can prevent people from accessing the
    river on your land, but you can not damn the river and deny access to
    the water without the consent of the community. Similarly, you cannot
    dump poison into the river even though it is “on your land.”

    When the community process works well, everyone benefits from the
    river and good water management. When it does not, rivers end up dead
    or dry, and everyone loses.

    In Jarvis terminology, the “enablers” are land owners with major
    rivers of traffic flowing through them. Individually we each own a
    little spring of knowledge and have some say in deciding the river(s)
    into which that spring flows. As a community, we have some claim on
    to how the river of knowledge can be used and whether it can be
    damned.

    As with water, the stakeholders often cut across existing political
    boundaries and institutions. Even identifying the stakeholders can be
    challenging, much less finding a process that aligns all interests.

    There’s no single answer for how to best manage water that applies
    equally well to all communities. With content and the “wisdom of
    crowds” we should be asking about that process for determining and
    enforcing the social contracts. Who has a say? What type of
    limitations should be communally decided. Water rights, as messy as
    they are, seem like a better analogy than property rights for these
    issues.
    Just to cite concrete examples, if upstream users of water figure
    out how to make more profit while using less water, the downstream
    users applaud their actions. They don’t ask for a share of the
    profit. On the other hand, if upstream users start using more than
    their share of water and hurting the ability of downstream users to
    earn a living, then the community does get very upset.

    We see these debates happening around us all the time. Can we use
    our collective wisdom to find the principles in those debates that
    create the most value for all stakeholders?
    Could we promote those
    principles to communities facing these issues and help them have the
    necessary dialogues?

    -Greg

  5. Steve  »  November 4th, 2006 9:58 am  » 

    The wisdom of crowds has long been a source of corporate products, revenues and profits. The multi-billion dollar market research industry, for example, basically collects and packages the wisdom of crowds and sells it.

    Companies like Nielsen not only make money selling the wisdom of crowds, they also copyright and legally own the crowd wisdom they collect. While I’m not a lawyer, it seems the current legal answer to the question “who owns the wisdom of the crowd?” is it is owned by whoever collects and copyrights it.

    Marketers are starting realize the growing importance of this information, as are consumer interest groups. Attention Trust (www.attentiontrust.org) is a non-profit working on this issue. There are also lots of companies experimenting with paying consumers to contribute to online crowd wisdom initiatives. This is not new, market research firms have long paid people to participate in surveys, focus groups, etc.

    I think we will quickly see two types of crowd wisdom collection methods become common. The first is the current approach, where people contribute for free or in exchange for some service or benefit. The second will be paid crowd wisdom collection efforts, where contributors are paid to participate.

    In both cases I think the collecting group will end up with ownership rights over the “crowd wisdom”, but contributors will likely get increasing amounts of value for their input.

    Steve

  6. Edward Cotton  »  November 5th, 2006 7:13 am  » 

    As most of the research on user creation tells us, there are a finite group of people who really contribute. Those who want to, have the time to and most importantly, have the talent.

    These people will create what the UK-based think tank, Demos calls- the Pro-Am economy.

    People who’s contributions have value, but they aren’t professionals.

    A great recent example is what Nikon did with Flickr;they selected the sites’s “top creators” and asked them to contribute images and thoughts for a new ad campaign. In return, they each got a camera and exposure.

    There was also the move by Nestcape to try and pay Digg’s best.

    We will see more of this as brands and new companies start to see the value locked in the crowd. They will create financial incentives and rewards for those who make unique contributions. Or their platform/media/brand will enable the discovery of talent that can then monetize itself.

    YouTube could eleviate a number of its PR problems by playing more of an editorial role; highlighting the new and emerging talent that appears on their site.

    There are a lot of companies who would be very interested in helping them make this happen.

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