Facebook recently reported record quarterly results and a profit of $1.5 billion for 2013. News media have recently fawned over Facebook Chief Operating Officer Sheryl Sandberg after the announcement that she has “joined the super-rich” through having her wealth surpass $1 billion. Sandberg has given many talks and written a book on how to be successful in business as a woman with her mantra to “lean in” becoming globally famous from her book of the same name, the movie rights to which having just been sold. I am sure that she has many skills and qualities that have helped her into her position as one of the youngest female billionaires as have other members of the global tech elite such as Mark Zuckerberg and Sergey Brin. However, they have made their billions of dollars not only though innovation, skill and risk-taking but through the unacknowledged free labour of many millions of people.
The economics on which the wealth of today’s web giants is built are not quite like any which have previously been seen as the corporations do not sell products to us in the traditional sense. Facebook, Twitter and Google derive much of their profit from advertising and do not charge users for the product. There is nothing particularly new about this model, it is one which television has used for decades. With the business model used in television the corporations pay producers to generate content which will attract viewers and sell the space around this content to advertisers. The model used by social networks and some other online businesses, however, is quite different as the ‘audience’ also provide the content. People are attracted to use Facebook by the posts of other users or the chance to make their own posts. The content is provided free of charge.
This model has led to the much repeated assertion that “if you’re not paying for something, you’re not the customer; you’re the product being sold“. Facebook’s clients are not us, the users, but the advertisers to whom they sell information about us. As the accumulated personal data on users is of course Facebook’s most valuable commodity and the source of their wealth we are not only the product but also the workers. We produce the data on ourselves by uploading our personal details to Facebook’s servers, logging our preferences for products or issues through ‘liking’ and mapping our personal networks through connecting with our friends. This is the kind of data which corporations previously had to pay social and market researchers considerable amounts of money to find out and the data they got was nowhere near as extensive or dynamic as what they get today.
In order to understand this situation social and political thinkers have looked back to Karl Marx and Italian autonomist Marxists to understand how this situation has occurred. Scholars of ‘digital labour’ (the website of a conference at the New School in New York provides a good introduction to the concept) have shown how we have been successfully convinced that the productive activities in which we engage online are not work but a form of leisure or self-realisation despite the fact that they collectively produce vast amounts of wealth for some people (for more on this notion which has been called ‘playbour’ see Beer and Burrows (2013) [paywalled] or here). This can be seen as being the ultimate triumph of capitalism; an ideological framework which has the workers so successfully indoctrinated that even they do not think that they deserve to be paid anything at all. Furthermore, this has occurred in times of increasing austerity, job insecurity and suppression of wages.
As jobs become lower paid and more insecure some corporations (and their boards) are becoming massively wealthy on the free labour of their ‘users’. The new boom industries make massive profits but have found a way to largely do so without paid labour. A recent US report found that 60% of marketers expected their budget to increase in 2014 but the majority of these said that they do not plan to take on more data analysts or other marketing staff. This is because the majority of their data collection and even analysis is done largely free of charge. We know this data is of value from the recently leaked Facebook advertising pricing structure in which users’ personal details are organised into differently priced tiers with greater access given the more money paid.
When we read about the achievements of the billionaire owners and board members of the giants of internet business and the genius of the innovations behind their well-earned bank balances it is worth remembering their cleverest trick is one of the oldest there is. If the workers can be convinced to work for nothing then you will make a lot of money. The business model on which Facebook’s $1.5 billion profit is built is ‘to reduce the paid labor force…as close as possible to zero and pay them only in the currency of recognition’ (Wark, 2013: 71).
Beer, D. and Burrows, R. (2013) ‘Digital Culture, Digital Archives and the New Social Life of Data’ Theory, Culture and Society, 30(4) 47-71.
Wark, M. (2013) ‘Considerations on a Hacker Manifesto’ in T. Scholz (ed.) Digital Labor: The Internet as Playground and Factory. London: Routledge. pp 69-75.