Hello lovely readers of berlinlcalling!
I’m Little Miss Panda from the curiosity killed the consumer blog which discusses latest issues of modern day consumerism, media and business. For the past few weeks I have been writing about a fascinating new movement: the rise of the prosumers. Luckily for me Stefkocha was very interested in this topic which was the reason why she asked me to be a guest blogger this week. Being an avid reader of her blog I just could not say no! So here it comes: P like… Prosumer!
P like what?
What exactly is a “Prosumer”, you might wonder since it’s a word that you will unlikely have seen before. The term “prosumer” has multiple meanings in business and economics. The business sector sees it as a combination of the words “professional” and “consumer” whereas economists see it more as a fusion of “producer” and “consumer”. In this blog post we will only look at the economic perspective of the word.
One man who has essentially contributed to the dissemination of the term is Alvin Toffler who first mentioned “prosumers” in his book called “The Third Wave”. The futurist defined it as a blend of producer and consumer which implies a more active engagement process of consumers in the process of production whether it’s design, construction or customization.
Nowadays people like to do more things themselves either because it’s often faster than looking for specialist or simply because it’s cheaper. Moreover we have a sheer infinite access to technology which supports the Do-It-Yourself trend by providing enough knowledge and information to consumers. As a matter of fact management of many companies has realized the economic potential of prosumers and have adapted to their new demands. One of the most known examples is the Swedish furniture store IKEA. Their marketing strategy is characterized by less customer’s service for lower prices. Customers of IKEA mostly have to construct furniture they bought themselves, however in exchange the prices are much lower than those of competitive companies.
How does the Prosumer Movement work on the web?
Since stefochka has made it her task to do an Web-Alphabet I would like to focus on how prosumption can work in the online word. (For more information on how Prosumers define other business sectors read here.)
The most visible examples of consumer participation on the world wide web is open-source software such as Wikipedia, YouTube, WikiLeaks or blogs. The content on those websites is not only produced by professionals, but also by users. If we take a closer look at YouTube videos of the entertainment, education, or even news category we can see that not only professional broadcasters or production companies upload videos. Instead there is a huge and increasing number of user-generated content such as music covers, “amateur” comedy shows or self-made movies. Websites like Wikipedia or WordPress could not even exist without prosumers and their participation.
Steven Thomas, author on A Teacher’s Theory, explains the factors which motivate people to take part in the production process:
These consumers/users are not paid for their labor, but presumably get satisfaction from the enjoyment or from the social connection or from the usefulness for the common good of society that it possibly facilitates. Consequently, one might call them “amateurs” in contrast to ”professional” except that many of them will have expert knowledge and skills (e.g., the specialized information that appeared on Wikileaks.)
The American professor also mentions a less obvious example of prosumption: amazon. The incredibly successful online store is known for reaching millions of people with their fast and easy service. However what people often forget is the fact that one of their most praised services, the suggestions for other books, music or gadgets that might be of interest for customers, could not be as detailed as it is without the documentation of consumption patterns. So unknowingly thousands of consumers contribute to amazon’s customer’s service day by day. According to Ashlee Humphreys and Kent Grayson, authors of “Intersecting Roles of Consumer and Producer”, consumers are more and more taking over steps of the value chain. Users of websites become producers the moment their contribution can be made into surplus value, therefore profit, by the webpage host.
Prosumers – an unsustainable revolution or simply exploitation?
Some might argue that the prosumer movement at worst is nothing short of exploitation. Humphreys and Grayson for instant are of the opinion that many consumers aren’t aware of the extent they contribute to a company’s profit generating activities since their main motive is not money but rather something else:
People get bit thrills from […] making something unique, showing it to their friends and having other people adopt their ideas
Both authors conclude that prosumption is a way to make consumers less critical of capitalism by allowing them to participate in the capitalist system and it’s core economic activities. So is prosumption just free labor to companies?
Not in all cases.
One example of prosumers getting tangible and financial rewards for their contribution is YouTube. Whereas most of the uploaded video content doesn’t attract a ton of viewers some lucky users became web legends with their videos. Just think of “Charlie bit my finger” or “Sneezing Panda”. In fact their videos became so popular that YouTube realized their contribution to the increasing popularity of the website as well. Therefore they get a piece of pie by receiving money for every single viewer of their videos.
According to a study done by TubeMogul there were already 10 independent YouTube stars who made over $100,000 per year. This amount of money was mostly generated by banner ads near the content, on their channel pages or implemented in the videos.
The three top earning YouTubes are:
- Shane Dawson – $315,000
- The Annoying Orange – $181,000
- Phillip DeFranco – $181,000
So there are a few lucky prosumers who have even made the transition from a participating consumer to an independent producer and manager of their own brand. There are definitely some cases were we can say P like Prosumer – P like profit.
No matter what you might think about prosumers one thing is sure; the days of the passive consumers are over or how Michael Fassnacht, blogger on marketinggeek states:
Any marketer needs to find the right long-term path and strategic options of integrating strongly or lightly the Prosumer, all in alignment of what makes a particular brand successful. But no brand can ignore the Prosumer anymore.
Still curious? Check out this cool book about how collaboration and prosumption change the economy!