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Profits of the New media Economy

Des Freedman

Wiki MarkupThis paper the recent claims that the internet facilitates a new media economy: one based on niches and not mass markets, on flexibility and not on standardization, on abundance and not scarcity, and on entrepreneurial start-ups and not on the industrial corporations that dominated the 20th century. Online logic is conceived by theorists such as Chris Anderson, Larry Downes, Jeff Jarvis, Charles Leadbeater, Clay Shirky, Don Tapscott and Don Williams 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 decentralized and customized 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.’ 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.’ These trends are, however, by no means confined to the media or entertainment 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, Google provides by far the best role model for any company operating in the new digitally-enhanced business era; for Tapscott and Williams, the online encyclopaedia Wikipedia best encapsulates the possibilities and relationships offered by collaboration instead of hierarchy. Whatever their respective conceptual starting points 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. The paper assesses the underlying dynamics of this new digital mode of production and interrogates the technological and economic principles on which it is based. Inspired by more critical chroniclers of the internet’s recent history (for example, Christian Fuchs, Olivier Sylvain and Jonathan Zittrain), it examines the economics of abundance in the light of current trends in online distribution and consumption and considers whether the theorizing 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 specialization and generalization in the emerging online media economy, the paper 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.