by Mike Masnick

User Generated Content Is About Efficiency And Growth, Not Exploitation

from the go-back-to-the-telephone dept

There's been a lot of talk lately from some people who incorrectly believe that social sites and user-generated content sites somehow exploiting their users. This is silly for a variety of reasons and is easily refuted. However, a post by Stephen Dubner on the Freakonomics blog got me to thinking about the subject from a slightly different perspective. He pointed to a NY Times article about the guy who runs the lost-and-found for Metro North, the train system that runs from Manhattan to the northern suburbs of New York City. The guy, Mike Nolan, talks about a web system that his team has put in place that allows those who feel they lost something to input what they lost and see if Metro North has found it. This is saving Metro North a ton of time, money and effort on incoming calls. Dubner highlights a key line from Nolan: "It's great to have other people do my data-entry work for me."

Now, some may bizarrely claim that this is "exploitation," but it's a situation where everyone comes out ahead. Those who lost something are likely to find it easier, faster and more convenient than calling while Metro North saves time and money as well. In many ways it reminds me of the stories when telephone systems moved away from operator-assisted calls to direct dial. It was the same sort of thing, where the "users" were doing the labor, and that saved the telcos money by needing fewer operators. There were some complaints that this was awful in that it put operators out of work, but it actually created many, many, many more jobs by making the telephone a much more useful tool. If all calls had remained as operator-assisted, the system never would have scaled to the same level and so many other telephone related innovations wouldn't be here today -- perhaps including things like fax machines and the internet. It's once again a case of people mistakenly believing things are a zero-sum game. If you can make things more efficient in a way that expands markets and opens up new opportunities, that's not exploitation, that's growth and opportunity. Switching tasks from insiders to end users in a way that benefits everyone can be called "user-generated content," but just as often it's an example of growing markets by making things more efficient.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Paul, May 14th, 2007 @ 7:32am

    The problem

    The problem is that people always assume that if someone makes money off of someone else's work, then it must be unfair. They don't realize that they're providing a service to the users that the user wouldn't have under normal circumstances. They deserve compensation in that regard. People have this notion that if a company makes money off of its user's work, then the user deserves compensation. They don't realize its the service that the user is being provided is the actual compensation. It's a trade-off. YouTube for example: You let me put ads on pages with your video and I will pay for the hosting and bandwidth costs. The user has the option to say no.

    No one is being exploited.

    reply to this | link to this | view in thread ]

  2. identicon
    Rufus, May 14th, 2007 @ 7:51am


    Not bizarre at all, Mike: all the happy web monkeys are working for The Man now.

    Keep smiling, sharecroppers. Rupert Murdoch, Tim O'Reilly and friends will be getting rich from the Web 2.0 Bubble. It won't be you!

    reply to this | link to this | view in thread ]

  3. identicon
    comboman, May 14th, 2007 @ 8:00am


    So did Bell pass the savings of getting rid of those operators on to their customers? I doubt it. Here's a better example: 20 years ago you pulled into a gas station and a courteous man filled the tank, checked your oil, washed your windows and took your cash. Now you stick you credit card in the machine and pump your own gas. I arrive at work smelling like gas, the pump monkey is out a job, gas costs more than ever and the oil companies are making bigger profits than ever. Is that what you mean by zero-sum, we get the zero and the big companies get the sum?

    Companies are constantly trying to push their work onto their customers, using the promise of "savings through greater efficiency", but it never pans out that way (at least for the consumer). I've noticed my local supermarket has put in a self-serve checkout. Let me tell you how this one will end: cashiers out of work, checkout lines as long (or longer) than ever, prices as high (or higher) than ever. But don't worry, as long as you believe you're not being exploited, I'm sure it's true.

    reply to this | link to this | view in thread ]

  4. identicon
    Paul, May 14th, 2007 @ 8:25am

    Re: Zero-sum?

    Those examples aren't the same as YouTube or what not. That's not a company exploiting user-generated content. That's companies forcing you to do part of the work. And in fact, you're still not being exploited. There's no laws saying supermarkets need cashiers or gas stations have to have attendants. The company found a way to save money. They're allowed to do that. Some people prefer to pump their own gas. Attendants can be slow sometimes. You can't please everybody.

    reply to this | link to this | view in thread ]

  5. identicon
    jLl, May 14th, 2007 @ 8:40am

    Re: Zero-sum?

    > Is that what you mean by zero-sum, we get the zero and the big companies get the sum?

    Zero-sum games are part of economics; meaning what one party gaines, the others must lose.

    My economics book used the example of eating a pizza; those who get more slices short the rest on how much pizza they get.


    reply to this | link to this | view in thread ]

  6. identicon
    sam, May 14th, 2007 @ 8:41am

    why aren't the examples provided the same... in one case, you're dealing with someone's effort to put content on a site.. in another, you'r edealing with someone's effort to bag groceries... you're basically dealing with a unit of work that the user has to do, that the user is not being compensated for....

    yeah.. i know you'll say that i should be happy to do it because i then don't have to pay for bandwidth.. just like the store says that my bagging groceries keeps costs down...

    these are both false arguements...

    if the arguement regarding user happiness was sufficent, and honest, youtube wouldn't be looking to pay the highest viewed users... similarly, if the grocer was really honest, prices wouldn't continue to rise at the same approximate rate they've been rising..

    bottom line, most businesses seem to think it's ok to take a few more $$$ from the users of the service/products, and if you can get the end user to take on more of the load, then the corporate bank account gets fatter!!


    reply to this | link to this | view in thread ]

  7. icon
    chris (profile), May 14th, 2007 @ 8:49am

    Re: Zero-sum?

    were there 24hr gas stations 20 years ago? how many pumps were there at these full service stations beck then? i'll bet there weren't more than 2 or 4 (4-8 cars fueling at the same time). now fueling stations can handle 8 and sometimes 16 cars at a time. oh, and you can buy food there too, 24 hours a day.

    self serve checkout is the same thing... one cashier can now run 4 checkout lines... and the system works as long as idiots that don't know how to operate the checkout stay the hell away. right now the idea is new. in time, you can have your usual 5-10 cashiers that the supermarket has always had, only now they can handle 20-40 customers at a time instead of 5-10.

    does that mean ATMs are bad too?

    reply to this | link to this | view in thread ]

  8. identicon
    Thomas Claburn, May 14th, 2007 @ 9:04am

    No one is being exploited?

    >You let me put ads on pages with your video and I will pay for the hosting and bandwidth costs. The user has the option to say no. No one is being exploited.

    That assumes the cost of producing the video is zero, which it may be if you're posting content that belong to someone else.

    reply to this | link to this | view in thread ]

  9. identicon
    comboman, May 14th, 2007 @ 9:30am

    Re: Re: Zero-sum?

    does that mean ATMs are bad too?

    As a technology, no; as a way for banks to screw their customers, yes. Have you seen bank service fees lately? And bank profits?

    reply to this | link to this | view in thread ]

  10. identicon
    Seth Finkelstein, May 14th, 2007 @ 9:46am

    Straw man

    The above example is an annoying strawman. It starts off confusing cost-shifting with sharecropping, then WHAM, down goes the strawman to a cheer of GO WEB2.0 YAY YAY YAY!

    Cost-shifting is when a company shifts labor from itself to the customer. This can sometimes be a good thing for efficiency because the labor has to be done by someone, and either the customer pays for it, or does it him/herself. Basic economics.

    Digital sharecropping is where companies set up a casino-like system where there's a handful of big winners but the house gets a cut of everything, and besides the lucky few, everyone else ends up poorer. But the casino-owners end up the richest of all. Then they justify it by saying "you COULD win big", "Nobody forced you to gamble", or "Perhaps you enjoy gambling". Or even stuff like "Don't think of it as losing money - maybe you're developing transactional skills!"

    The key difference between the two is that lost-and-found users do not have to be scammed and marketed into typing what they're looking for. If that's not an obvious distinction, there's nothing more I can say.

    reply to this | link to this | view in thread ]

  11. identicon
    Jamie, May 14th, 2007 @ 9:54am


    You still aren't getting this. While both bagging groceries and creating content for YouTube are work that the user is doing, they aren't the same.
    I have no desire to bag groceries. It isn't fun for me. So when the grocery store stops bagging my groceries and makes me do them myself, they are making me do work. Work that I get nothing for. They didn't lower their prices. They didn't give me any incentives or bonuses to bag my own groceries. They simply made it so that I have to work if I want to shop there.
    I do like creating funny videos and sharing them with my friends. Google provides me with free bandwidth and an easy open platform to upload those videos to. They make it easy to share those videos with anyone I want to share them with. This is something I would have to pay for normally. How do I pay for it with Google? They place adds next to my video. Do they make money off of the content that I create and post? Of course they do. Why is that wrong? Why is making money off of my content exploitation? They gave me a service that I wanted for free. I don’t have to use it. I don’t have to make videos at all. If anything, I feel like I’m exploiting them. I’m taking their free bandwidth and open platform and promoting my videos. Something I would have to pay a lot of money to do otherwise.
    And if my videos end up being very popular, why is it wrong for Google to want to pay me to make more of them? The truth is that even if Google doesn’t pay anyone for any of the videos, it’s still a win win situation for everyone. Free distribution, delivery and promotion for me, and more page views for Google.

    Youtube = I get something I want in exchange for work.
    Grocery Store = I get nothing new and I work more.

    reply to this | link to this | view in thread ]

  12. identicon
    Jake Lockley, May 14th, 2007 @ 10:01am

    MySpace allows users to promote themselves on their service at no cost and uses a variety of techniques to generate as many page views as possible while they make tens of millions each month (according to them) and the users earn nothing.

    If there's real profit participation, like those in place in the entertainment industry (protected by unions by the way) then that's a different story, the users are entering the marketplace in that scenario, expanding it.

    The real question is what are all these advertisers getting for their money?

    The Googles, if they are smart, are storing comprehensive data on your online behavior across every site you visit (because their cookieed ads now dominate the internet). That'll be worth a lot more to advertisers who can identify you anonymously with a number and have a very detailed profile on all of your browsing habits so they can pay a premium to target you specifically.

    reply to this | link to this | view in thread ]

  13. identicon
    ReallyEvilCanine, May 14th, 2007 @ 10:03am

    Burning comboman's strawmen

    Service stations: such a job is dead-end for unskilled labour. You complain about the price and yet it is out of necessity even more expensive wherever "full service" is offered or required by law. Self-service and technology allow us 24-hour filling stations. With few exceptions, service stations earn less than two cents per gallon sold.

    Cashiers: Again a dead-end job for unskilled labour. Self-service check-outs allow one worker to cover four queues. Fewer checkers save costs which will be passed on. Should RFIDs catch on like UPC codes, there won't be any checkers left anyway.

    Giving me convenience is hardly "exploiting" me. I have the choice in some places to do a bit of work myself and save money. I get out of a Home Despot faster if I check myself out (provided the idiots aren't blocking the machines). If I don't want to get out in the rain in Iceland I can always pull up to the full-service pumps, but I'll have to pay an additional 15-40kr per liter. It's a choice few make.

    Unskilled jobs will always disappear due to technology. Those workers displaced by technology will find other unskilled positions. Welcome to the post-Industrial Revulotion world.

    reply to this | link to this | view in thread ]

  14. identicon
    Dan Greenfield, May 14th, 2007 @ 10:37am

    user generated content

    Speaking of bagging groceries and user generated content. Companies should be careful what they ask for. In some supermarkets, you don't even need cashiers. Scanning technology eliminates them. Of course, I don't know if the savings were passed onto me. I do know or at least I heard that cashierless checkout counters were costing supermarkets big bucks. Apparently shoppers weren't reaching for high margin copies of People Magazine and Hershey bars as they do when waiting for a cashier to ring them up. Interestingly many creators of user generated content don't want to be paid for their work. That would make it a job. What they do want is a relationship with a company they are spending money with and believing in. They say it costs more to marry for money than it does to earn it. Nothing is ever free. The cost of building a relationship with customers in the end may actually cost more in time, but the dividends may be greater

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, May 14th, 2007 @ 10:38am

    Won't someone just spam the site with "$50" then "$51" "camera" " mobile phone" until they get a match then go an claim stuff that isn't theirs?

    reply to this | link to this | view in thread ]

  16. identicon
    tek'a, May 14th, 2007 @ 1:59pm

    Re: spamming cash

    might happen, sure.
    but my entry for "dark blue messenger bag with 2 comp-sci schoolbooks and a couple paperbacks, probably left on the something-something train thursday night" will actually turn up and I just might get my bag back.

    reply to this | link to this | view in thread ]

  17. icon
    Wolferz (profile), May 14th, 2007 @ 2:01pm

    apples and frying pans comparison

    This isn't even an apples and oranges comparison. This is an apples and frying pans comparison. What do apples and frying pans have in common? They are both tangible things and they are both involved in eating. I wouldn't claim that eating a frying pan is good for you based on the fact that both it and apples are involved in eating. Your argument is comparatively just that.

    The core of every argument I have heard claiming content sites based on user submissions are exploiting their users centers around the fact that the site is making ALL of the money while doing very little of the work. For this to be an accurate comparison in respect to such an argument then the metro system would need to be profiting directly from the info their "users" are submitting to them.

    Show me where the metro system is profiting DIRECTLY from the information being submitted to their system. Who is it that is paying money or producing ad clicks to view the list of who _might_ have lost what? The only people that even see that list is the janitors. Are they paying money for access to it?

    At least in and apples an oranges comparison both are edible.

    You have managed to miss the entire issue by a oceans width and be cocky about it at the same time with your comments like, "Now, some may bizarrely claim that this is 'exploitation,'." The only person that would even think to consider what the metro system is doing exploitation is you. Thats because the differences are so clear they qualify as obvious.

    BTW. I do not claim such sites exploit their users. However the argument I have for such a statement actually makes sense. It is because I know better than to think the people submitting content to these sites are in a situation where there is no good alternative to submitting content. Do they honestly expect me to believe that they can't go to the living room and flip on the TV, go to the movies, hang out with friends at the mall, mow the grass, take a walk, play a video game, etc? No one is making any one submit info to these sites. It is a choice and as long as there are viable choices it _can not_ be exploitation.

    If these people crying exploitation really feel users should be paid for the content they submit then they need to start a site of their own where users get paid. If they are right and people deserve to get paid, are willing to hand out personal information, willing to hand out their bank account info, and go through the hassle of setting up an account their site should be a success and will likely push the other sites to pay their users or risk going under. Stop bitching about the problem and do something about it.

    reply to this | link to this | view in thread ]

  18. identicon
    Benefacio, May 14th, 2007 @ 6:34pm


    Let's see... Dictionary.com returns three basic definitions of exploitation.

    1. use or utilization, esp. for profit

    That certainly seems to apply here. The user-base exploiting YouTube for lower bandwidth cost and YouTube is using the free content to make its ad space more valuable. Utilization for profit by everyone!

    2. selfish utilization

    That is a lot tougher because YouTube is not a single individual so the underlying motive is harder to pin down. Remember that not everyone understands that profit does not always equal money. Some individuals COULD be sitting in a dimly lit room, wringing their hands as they count their ducats. I am optimistic, though, and don't think this one applies.

    3. the combined, often varied, use of public-relations and advertising techniques to promote a person, movie, product, etc.

    Hmmmm... See number one. I don't think there can be any doubt that YouTube is a business that thrives on exploitation.

    Moral of the story; if you are not sure a word is being used correctly don't hesitate to look it up. In this case Mike, you are wrong. User generated content sites ARE about exploitation, which is not silly and cannot be easily refuted.

    reply to this | link to this | view in thread ]

  19. identicon
    Charles Griswold, May 14th, 2007 @ 10:17pm

    Sharecropping vs. Exploitation

    OK, so I finally read the article that touched off this debate. Nowhere in the article is the word "exploit" or "exploitation" mentioned. What Nicholas Carr does say is that social networking sites like Myspace and Youtube are "sharecropping" systems, although he does admit that "the sharecroppers are generally happy because their interest lies in self-expression or socializing, not in making money, and, besides, the economic value of each of their individual contributions is trivial."

    He goes on to say that "It strikes me that this dynamic [ . . . ] is the most interesting, and unsettling, economic phenomenon the Internet has produced."

    So, yeah, it would seem that (according to some definitions of the word) the users of these sites are being "exploited". Since they don't mind, though, it's not necessarily a bad arrangement.

    reply to this | link to this | view in thread ]

  20. icon
    Mike (profile), May 15th, 2007 @ 12:49am

    Re: Wrong!

    Let's see... Dictionary.com returns three basic definitions of exploitation.

    Exploitation has a negative connotation, which isn't clear from your dictionary.com reference. It usually is used to mean that someone is being used *against their will* for profit.

    reply to this | link to this | view in thread ]

  21. identicon
    Rufus, May 15th, 2007 @ 3:03am

    Changing the definition to one you like, eh Mike?

    Sorry, no cigar.

    reply to this | link to this | view in thread ]

  22. identicon
    Seth Finkelstein, May 15th, 2007 @ 8:43am

    Exploitation == Taken Advantage Of, Not Coercion

    "Exploitation" is indeed negative, but is not the same as slavery or coercion - more at being "used", "taken advantage of", which can come about through deception or slick salesmanship or even superior market power.

    Again, it's a strawman, define the word to mean coercion, say there's no coercion, declare victory.

    I have no trouble with a phrase like "casinos exploit gamblers", even though nobody is forced to gamble. The exploitation comes from using people's weaknesses for profit.

    reply to this | link to this | view in thread ]

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