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Commodity and Community in Social Networking Marx and The Monetization of User-Generated Content
Commodity and Community in Social Networking Marx and The Monetization of User-Generated Content
PERSPECTIVE
52
COMMODITY AND COMMUNITY IN SOCIAL NETWORKING 53
2014). Facebook users also generated an average of 3.2 agencies and departments and sold as a commodity. It is
billion Likes and Comments per day during the first quar- not the viewers who work, but the rather the
ter of 2012 (Facebook 2012). Facebook has benefited statisticians.” Bolin (2010) is suggesting that as raw
massively from these user activities. Its revenue has been material users’ contributions cannot be considered labor.
soaring due in large part to advertising. Revenue is gen- Their words and images are available for exploitation
erated every time a user clicks on an advertisement like a mountain rich in ore, but they are not implicated in
(Facebook 2012, F17). Major advertisers cannot miss the the process of value creation.
opportunities presented by having a presence on Arvidsson and Colleoni (2012, 137) contend that “people
Facebook. who create value for Facebook and other social media plat-
The theoretical understanding of the exploitation of forms do so voluntarily without any kind of compulsion
user participation in Facebook is controversial due to whatsoever. People indeed feel more than compensated (as
both questions about the nature of users as a class and already noted by Smythe) by the use value and gratification
the problem of the quantification of user participation. they derive from these activities.” They question the eco-
On the one hand, as Cohen (2008) points out, Facebook nomics of the audience commodity theory as applied to
exploits its users in some sense since it does not pay a Facebook. Hardt and Negri (2000) argue, furthermore, that
wage for the labor that produces content. As Marx this immaterial labor is immeasurable.
highlighted (1867), exploitation is the fundamental In this regard, Facebook itself claims that it creates
aspect of class. He claims that “the driving motive and value for advertisers and marketers by offering more
determining purpose of capitalist production is the great- than 1 billion monthly active users on its site. The use
est possible exploitation of labor-power by the capitalist” value of users’ labor is constantly established through
(Marx 1867, 449) who owns the means of production. specific processes of measurement that serve to quantify
Likewise, Facebook users produce informational content, its corresponding exchange value (Dowling 2007). The
but their products are appropriated by capital. We con- economic significance of users’ activities is arguably
sider in the next section whether this parallel makes altered by the active presence and active intervention of
sense, but first we discuss some economic arguments for capital (Dowling 2007). As such, what distinguishes the
and against Fuchs’s claims. concept of free labor in the era of Web 2.0 is its link to
Unlike labor, gender, or race, Facebook users are not ideas of quantitative and interactive commodities in both
easy to categorize because they are an aggregation with production and consumption. In this sense, watching is
little in common beyond the link formed by the technol- work rendered quantifiable by ratings points that reflect
ogy through which they communicate and the markets units of audience power.
that technology supports (Cote and Pybus 2007). Never- Advertising is not Facebook’s only business model; it
theless, with the rise of user-generated content and free has developed direct marketing as well. Among Face-
access to social networking platforms that yield profit book’s annual revenues, advertising revenue accounted
from online advertising, the economics of the Web seem for 84.2% in 2012, but this was down from 98% in 2009
to resemble the accumulation strategies employed by because revenue from nonadvertising sources increased
capital on traditional media like television. To this extent by 62.3 times between 2009 and 2012. Unlike several
its users constitute a meaningful economic entity and UGC technologies, which mainly sell users’ free time
potentially therefore also, Fuchs implies, a social actor. and energy to advertisers, Facebook’s users constitute a
But what sort of entity and what sort of actor? There is market. The users can purchase virtual goods on the
considerable disagreement about the nature of their Facebook platform by using various payment methods
“labor,” or indeed whether they labor at all. available on the website (Facebook 2012). In other
On the other hand, researchers argue about whether words, Facebook shows a very unique business model
user participation can be measured and sold to adver- differentiating itself from other UGC models.
tisers, and if so, who conducts the quantification of user Meanwhile, Facebook has greatly increased its finan-
participation and how significant it is in Facebook’s cial valuation, which is “related to its perceived capacity
overall value. For example, Smythe (1977, 4–5) pointed for attracting future investment, or, to use a more general
out that “several media research corporations and media term, financial rent” (Arvidsson and Colleoni 2012, 145).
corporations themselves as well as AC Nielsen quantified Arvidsson and Colleoni consequently argue that Face-
audience participation in order to assure that advertisers book’s business model:
get what they pay for when they buy audiences.” Later,
rather than seeing audiences as working for media indus-
can be interpreted as a symptom of a transition away from a Ford-
tries, Bolin (2010, 357) suggests, “It is more fruitful to ist, industrial model of accumulation where the value of a company
see statistical representations of audiences as raw mate- is mainly related to its ability to extract surplus value from its work-
rial that is shaped into a commodity by market research ers (to use Marxian terminology), to an informational finance-
COMMODITY AND COMMUNITY IN SOCIAL NETWORKING 55
centered model of accumulation where the value of a company is number of users and the advertising revenue that Face-
increasingly related to its ability to maintain a brand that justifies a book has been able to attract and investor valuations of
share, in terms of financial rent, of the global surplus that circulates the company.” In fact, there is a clear relation between
on financial markets. (145–146)
these two values. Facebook has rapidly increased its ad
revenue, from $300 million in 2008 to $4.27 billion in
In other words, according to Arvidsson and Colleoni, 2012, primarily based on its increasing number of regis-
the brand becomes a source of value in itself, apart from tered users, again, from 140 million users at the end of
any evidence about the earning capacity of the company December 2008 to more than 1 billion users in December
that produces actual products under the brand. The 2012. In its filing with the Securities and Exchange Com-
rewards to the brand may be called a kind of rent by anal- mission made on February 1, 2012, Facebook (2012, 50)
ogy with land, valued in itself apart from the income it indicated that “the increase in ads delivered [in 2011]
may produce at the time of sale. This concept of rent was driven primarily by user growth.”
explains some otherwise puzzling phenomena such as The process of commodification in Facebook is com-
the enormous prices paid for digital companies that have plex. Use value is determined by a product’s ability to
an established brand but little income, or the intensity meet individual and social needs, while exchange value
with which luxury goods producers attack counterfeits is determined by what a product can bring to the market-
that are sometimes produced in the very same factories place. In the usual case, use value is realized by the con-
and with the same materials as the official products but sumer after purchase, that is, a payment corresponding to
sold at a lesser price. the exchange value of the goods. Production simply
Facebook indeed attracted financial investments in the reverses the temporal order: The use value of labor is
stock market, which has been one of the major forms of purchased by the owner of an enterprise, who subse-
revenue in digital capitalism. Right after its initial public quently realizes the exchange value of the product on the
offering (IPO) on May 18, 2012, the capital value of market. Facebook represents a new configuration.
Facebook was as much as $104 billion (Associated Press Users voluntarily engage in activities they enjoy on
2012). Although the share price for a while nosedived Facebook, neither buying nor selling a product. How-
from $38 to $22.17 on November 16, 2012, the price ever, through searching for ads and clicking the key-
soared to $51.95 as of October 25, 2013. Arvidsson and board, they unintentionally commodify themselves for
Colleoni (2012) and Hardt and Negri (2000) suggest that the market as well as for Facebook. Thus, on the one
the labor theory of value has become irrelevant to under- hand, the use values created by users circulate among
standing SNSs because financial rent is now more signifi- themselves in an “economy” that resembles gift giving
cant than labor. As Ernest Mandel (1975) already pointed or barter rather than commodity exchange, while on the
out, late capitalism is a form of increasingly parasitic other hand, exchange value is extracted from these use
rentier capitalism in which surplus profits are obtained values simultaneously by the three procedures outlined
by monopolizing access to resources, assets, and technol- earlier: advertising, direct marketing, and the sale of
ogies. Rather than resulting from the direct exploitation stock. Of course, these three areas commonly rely on
of labor at the point of production as the labor theory of data collection and analysis of user-generated content,
value would have it, value is now appropriated through because they feed the exchange value in all these
rent (Bohm et al. 2012). The idea of profit based on rent activities.
shifts the dominant logic of value production in the heart-
lands of the advanced capitalist economies.
AUDIENCE COMMODITY OR USERS?
While the pursuit of financial rent is one of the major
business models for SNSs in the digital economy, it is Smythe (1977) linked the concept of the audience com-
imperative to understand that financial value is also modity to the labor theory of value in his initial formula-
based on user participation and ad revenue. Finance capi- tion by connecting audience work and the production
tal investments in Facebook are made because of the and reproduction of labor power. People are brought into
expectation of high future profits. In other words, finan- this commodity relation by working for the networks
cial capital does not itself produce profits, and it is only (unconsciously, uncoerced, and unpaid) during suppos-
an entitlement to payments that are made in the future edly nonwork time. As consumers, they enable the trans-
and derive from actual value-creating activities (Fuchs formation of their leisure activity into a commodity.
2012). For Facebook, user activity is the source of profit, While the concept of the audience commodity offers sug-
without which its financial value would be insignificant. gestive ideas for understanding what is happening on the
Arvidsson and Colleoni (2012, 145) argue that mass media, it needs a rethink in the context of Web 2.0.
“advertising is not the most important source of income Television audiences and SNS users are different with
for Facebook. And there is no linear relation between the respect to their roles in the commodification process.
56 D. Y. JIN AND A. FEENBERG
According to Smythe, the work of the broadcast audi- images on the Web, type messages that coconstruct the
ence comes after content is produced. The television pro- chat room, and produce their own websites and blogs.
gram, for example, is produced and then broadcast, The audience commodity theory can be adapted to
during which time the audience’s work begins (Cohen Facebook in this way, but the adaptation raises problems
2008). As unpaid laborers, television audiences spend with the assimilation of this user activity to the Marxian
their off-work time passively, attending to advertising concept of labor. Fuchs’s comparison of capitalist pro-
messages and buying advertised products; however, SNS duction and user production on the Internet is greatly
users are counted, packaged, and sold to advertisers and simplified. Capitalist exploitation involves more than
industrial capitalists while actively engaged in pleasur- extracting profit but also creates new conditions for
able activities, among which various forms of self-pre- doing so. The labor process was reorganized around new
sentation play a key role. This means that UGC users, forms of labor that could be quantified and controlled.
and in particular Facebook users, are different from The products changed too as their production changed.
Smythe’s television audiences in that they unwittingly Marx called this “real subsumption.” Capitalist appropri-
participate in transforming their identities into exchange ation thus involves not only commodification but also
values for profits. In other words, unlike television audi- the transformation of labor and the commodified resour-
ences who passively consume preproduced materials, ces. The capitalist form penetrates the actual content of
UGC users are actively producing content and consum- production. The completion of this process can be
ing the content they produce at the same time. described as “total commodification.”
While providing opportunities for users to enjoy their The audience commodity theory of the mass media is
activities and networks of friends and acquaintances, roughly compatible with Marx’s theory of commodifica-
Facebook also creates an intricate archive of cultural tion since not only is audience attention sold, its
preferences for savvy marketers to exploit (Gregg “content,” the object toward which it is directed, is con-
2009). Television and radio broadcasting platforms are trolled and rationalized by capital. But with Facebook or
only able to produce very broad audience commodities Google only sale occurs. Corporations commodify the
whose profiles and characteristics can then be sold to knowledge commons, but they do not transform its con-
advertisers, but Facebook targets specific user groups tent as thoroughly as were land and labor at an earlier
much more effectively. This is done through powerful stage. Of course the content is shaped to some extent by
computing algorithms that filter user data according to a the design of the interface and worked up by such proce-
range of different advertising oriented criteria (Bohm dures as data mining, but the original flow of data is not
et al. 2012). Information gathering is facilitated by the much altered in the process. There is indeed a certain
current climate of self-disclosure supported by interac- degree of standardization involved in the process, but it
tive technology, including blogging and social network- does not go as far as in the cases Marx considered.
ing, that generates a trove of information for data Unlike land cleared and fenced for raising sheep, or labor
miners, whether for advertising or policing purposes stripped of skills, online communications remain essen-
(Andrejevic 2007). Facebook allows advertisers to tially what they were even after they are commodified.
select relevant and appropriate audiences for their ads, This is an important distinction. Where Fuchs claims that
ranging from millions of users in the case of global users’ communications suffer “total commodification,”
brands to hundreds of users in the case of smaller, local we argue that the commodification is quite restricted and
businesses (Facebook 2012). leaves the users relatively free.
Some argue on the basis of these distinctions that the Capitalism is a parasite on an independent content that
concept of audience commodity as Smythe defined it has two quite different destinies: On the one hand the
cannot be used to understand the interactive nature of untransformed content is exchanged with other users; on
consumption and production in Web 2.0 technologies. the other hand the content is transformed by the imposi-
We agree that it is necessary to replace the term tion of the commodity form through such procedures as
“audience” with another more appropriate term. Sonia data mining. This double character of content suggests a
Livingstone advocates substituting the more explicitly different analogy than labor. Social networking actually
(inter)active term “user.” Livingstone (2003, 355) resembles the telephone more than the factory. User con-
focuses on the action of being a user in the Internet age, tent is transmitted by Internet companies in the same
literally emphasizing the verbs involved, such as way that telephone conversations are transmitted by tele-
“playing computer games, surfing the Web, searching phone companies. The users’ conversations are not con-
databases, writing and responding to email, visiting a trolled by the telephone companies or social networking
chat room, shopping online, and so on.” The term “user” sites as is labor by factory owners. The telephone com-
is functional and reflects the fact that users click on pany commodifies the conversations by the simple proce-
hypertext links in order to create a sequential flow of dure of measuring their duration. It is true that
COMMODITY AND COMMUNITY IN SOCIAL NETWORKING 57
commodifying social networking content is more com- product of user activity. The sophistication and complex-
plicated, but like the measurement of duration, it leaves ity of that process are necessary precisely because user
the communication itself to go forward free of interfer- activity has not been reduced to the simple expenditure
ence. The analogy between factory labor and social net- of effort over time as in the “real subsumption” of labor
working “labor” is misleading. A better analogy would in the factory.
be a common carrier. In sum, while it is clear that many users of Facebook
This has a further consequence brought out by Arvids- and similar sites work hard to generate content, and
son and Colleoni. The capitalist transformation of the while it is also clear that commodification and exploita-
labor process has the effect of reducing labor to the tion occur on these sites, the specifically Marxist con-
expenditure of uniform effort over time. This abstract cept of labor under capitalism does not apply. That
labor is measured by its duration, hence the discussion of concept has a systematic significance and connotations
the struggle over the length of the workday in Capital. in Marxist theory that follow it in Fuchs’s argument.
The force of the idea depends on the assumption that But the Marxist concept is actually quite narrow and is
under capitalism goods are valued at their cost of produc- tied to the production of commodities by deskilled labor
tion. The cost of production of the labor power the under the control of capitalists or their managerial rep-
worker sells to the capitalist is the value of the necessi- resentatives. It implies a notion of rationalization inap-
ties of life required to reproduce it from day to day. That propriate for SNSs. In the next section we offer an
cost bears no relation to the amount of product the alternative.
worker can produce in the course of the workday. The
difference constitutes surplus value, and its appropriation
by the capitalist is exploitation. This does not describe
THE INTERNET AS A PUBLIC SPACE
how users’ communications generate profits.
Obviously, money can be made off many human There is another problem with Fuchs’s analysis of SNSs
activities that are not labor as Marx understood it and are on the Internet. The audience commodity theory was
not exploited in this precise sense. As noted earlier, tele- designed for television. It is true that Internet
phone companies profit from conversations on their lines “audiences” are also sold to advertisers, but SNSs are
but though the callers are active and sometimes even cre- significantly different from television. A more relevant
ative, their conversations cannot be described as labor. analogy than television at this point in the development
Restaurants profit from the proximity of tourist venues, of the Internet is the sidewalk. Like the sidewalk, SNSs
but the tourists do not work for the restaurant owners. form a public space on which all sorts of interactions
Gentrification follows artists into dilapidated neighbour- take place. And just as the activity on the sidewalk cre-
hoods but the artists painting in their lofts are not work- ates business opportunities for the owners of stores along
ing for developers. It is simply wrong to qualify every the way, so does the Internet create opportunities for the
activity from which capitalists draw a profit as labor and owners of the services, such as social networking sites,
reduce it to its economic function. In a very broad usage on which individuals meet and converse. Advertisers on
we can call all these examples instances of exploitation Facebook resemble store owners who rent a good loca-
but they do not do the harms nor have the political impli- tion in a mall. Visitors to the mall engage in both private
cations of the expropriation of surplus value in capitalist and public activities to the extent permitted. As in the
production. mall, the commodification that takes place on SNSs con-
In a Marxist context, the identification of user activity cerns access to audience attention, not ownership and
on the Web with labor has “a set of highly particular sale of the conversations and their by-products such as
political implications” (Arvidsson and Colleoni 2012, photographs and videos. Although sidewalks and malls
136), namely, the necessary overthrow of capitalism to are not typically associated with the ideal of public dis-
end exploitation. Arvidsson and Colleoni (2012) are not cussion, it does occur there occasionally. That is a signif-
persuaded by Fuchs’s argument and reject its implied icant expression of freedom of assembly in a democratic
politics. We agree that the application of Marx’s concept society.
of labor to the UGC and SNSs on the Internet is not Fuchs reduces the user interactions on the Internet to
appropriate. The “labor” of users is not abstract but its economic function and so dismisses its democratic
totally concrete in the sense that it depends on personal- implications. In so doing he ignores the human signifi-
ity and style. It is not uniform, is not measured by the cance of online interaction as a new public sphere. The
time expended on the effort, and it cannot be divided role of the social networking in social and political life is
into a portion devoted to reproduction and another por- not exhausted by its economic aspect. In fact, we have
tion expropriated as surplus value. Its quantification, as yet to measure the full extent of its contribution to
noted earlier, is superficial and simply records a by- democracy.
58 D. Y. JIN AND A. FEENBERG
Arvidsson and Colleoni would seem to agree, but their support the claims of the democratic sphere being possi-
notion of social networking sites as a democratic public ble through online activities, including SNS activities
sphere is peculiarly truncated, as Fuchs argues in his that have been used for political campaigns. For exam-
rejoinder to their critique of his own Marxist approach ple, political use of SNS and UGC in the last two U.S.
(Fuchs 2012). They claim that SNSs could be employed presidential elections was common. In the 2008 U.S.
to democratize the attribution of brand value. This would election, user-created videos uploaded to the Obama and
presumably make for a better financial system. The limi- McCain YouTube channels were viewed almost as often
tations of this projection are painfully clear. The actual as official campaign videos. Due to the increasing role of
politics of the user content on the Internet is not about SNS and UGC, there is a huge literature attempting to
improving the workings of the stock market but rather, understand this new phenomenon, the emergence of an
as Fuchs points out, involves resistance to various forms electronically mediated public sphere on the Internet
of government and corporate domination. (Dahlberg 2007; Dahlgren 2013).
The democratic public sphere is an essential aspect of What makes this possible is the very feature of user
democracy. Elections would have little meaning if citi- communication on the Internet that supports social net-
zens did not engage in widespread and continuous dis- working, namely, its ability to mediate small-group
cussion of policies and government. The public sphere is activity, the so-called “many-to-many communication”
the “space” of those discussions. It is occupied by a more that distinguishes interaction on computer networks from
or less significant portion of the population at any given other forms of mediated communication such as the tele-
time. In periods of crisis or uncertainty, it swells. When phone and broadcasting (Feenberg 2012). Groups can
all is going well it may contract. But in any case democ- form in the spaces for free discussion SNS on the Internet
racy involves public participation in the creation and the provides, debate their ideas and plans, and then use other
criticism of ideas, policies, and representatives (Haber- features of UGC to broadcast a call to action.
mas 1991; Salter 2003). The impact of social networking on the public sphere
The Arab Spring and the Occupy Movement that goes beyond these conventional political considerations.
occurred in the early 2010s have spread awareness of the Not only does SNS support protest movements, it has
democratic potential of SNSs on the Internet. In part by enlarged the range of concerns discussed in the public
using Facebook and Twitter, activists organized the sphere. That range is continually expanding in demo-
unprecedented protests that gave rise to the Arab Spring cratic societies, from its origins in taxation and war to
and the Wall Street Occupy Movement. In December education and economics and, more recently, environ-
2013, several Korean college students opened a Face- mental and gender issues. The process continues to
book site (https://www.facebook.com/cantbeokay) in unfold as the public sphere embraces ever more domains
order to support the labor movement of railway workers, of social life. But, contra Fuchs, public interest in many
and this site also played a key role in organizing the mas- of these new concerns is not motivated by struggle over
sive candlelight vigil of May that demanded the resigna- the distribution of surplus value as are workers’ strug-
tion of the current Park Geun-hye government over the gles. Rather, insofar as SNS users have something in
Sewol ferry disaster of April 2014. The Facebook site common with workers, it is not their economic claims
spreads the citizens’ claim that the media are controlled but the technological form of their association.
to conceal the truth behind the failed rescue operation; Factories were the first modern institutions that
therefore, this particular site has worked as an alternative assembled masses around technologies. Marx under-
to the mass media in the public sphere. stood the importance of technology in creating the mass
As such, SNS can bring dissenting opinion to the base of struggle and contrasted the political potential of
attention of large numbers of people quickly and cooperative labor on the shop floor with the passivity of
cheaply, and can eventually mobilize them in protest. isolated peasant laborers. Today technical mediation
Thus, despite the dispiriting commercialism of SNSs on touches every aspect of society, not just the factory.
the Internet, and the role of corporate and government The entire population of advanced capitalist societies is
surveillance in stripping us of the last vestiges of privacy, enrolled in many overlapping technical networks, each
there is another encouraging side to the story. Freedom of which is organized by a hierarchical administration
of speech and freedom of assembly have a new venue in modelled on capitalist management. Not just produc-
a society that has reduced the spatial loci of public gath- tion, but also education, medicine, leisure activities, and
erings and speech-making. The visible manifestations of transportation have been transformed by technology.
politics on the Internet take shape against a background Impressive numbers are involved in these many new
of intense discussion in web forums and on SNSs. In this functional networks, but for the most part the partici-
context, user-generated content is political content. pants are not assembled locally in face-to-face contact
There are also several examples of SNS and UGC to as are factory workers. This has limited the political
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