Welcome to the Implausipod, a podcast about the intersection of art, technology, and popular culture. I'm your host, Dr. Implausible, and as we return to a regular recording schedule, I'm going to introduce you to the audience commodity, an old idea from economics tat goes a long way to explain some of the current events we're seeing in the social media spaces.
What exactly is the audience commodity? Well, that's a fantastic question. With the recent introduction of Threads a little bit ahead of schedule because of the Twitter apocalypse, I thought it'd be worth going into the background of it because it's really got some relevance for the current events that are happening today. Because it was published in a relatively obscure Canadian academic journal back in the seventies, it hasn't seen that much adoption by mainstream economics, but we'll get into it. If that the kind of thing is your bag, then by all means, stick around.
In short, the audience commodity is all about how you and I and all of us really are turned into products by the cultural industries, whether it's media or advertisements or websites.
I'll put the citation on the screen (see below) for those that are interested. The author, Dallas W. Smythe was writing it as a bit of a challenge to traditional Marxist economic thinking at the time in the seventies. He said they were getting it wrong when it came to the cultural industries and the impact that they actually had, what they were doing.
Now Dallas Smythe was a former economist at the FCC, and he was blacklisted due to McCarthyism. I mean, Hoover had a file on him, for reasons, and he is drawing heavily on a book called Monopoly Capital that was put out in the sixties by Baran and Sweezy. We should probably do a whole episode on that at some point in time, but we'll see how this goes.
Now for Smythe, the main argument speaks directly to Facebook or Meta's business model. This goes the same for like Google and everything else too. And what is their business model? Websites? No. Apps? No. Advertising? Close, but still not the whole picture. Their business model is the production of the audience commodity. Advertisers buy audiences and those audiences. Time is their labor. And how did Smythe come to this conclusion? Well, he’s asking a simple economic question. Basically, what economic functions for capital do mass communication systems serve? And in this case, both Google and Facebook, Meta and Alphabet, whatever, both fit in the same “mass” of mass communication. They have a huge reach. So in order to figure out the economic function, you need to figure out what the commodity those companies produce actually is. And you might think you know what this is, it's the whole: “if you're not paying, you're the product” line. And this is a part of that, only in a lot more detail.
A part of Smythe’s argument is that traditional economics was getting it wrong. If you asked “what does the media produce?”, you might answer something like content or information or messages or entertainment or shows or something like that. And that's understandable. It's what it looks like they do. So you'd be forgiven if you thought That's how it worked, because that was the traditional orthodox idealist point of view. It was held by everybody from Marx to Galbraith to Veblen to McCluhan. There's a lot of academic writing on this idea and non-academic writing too. Everybody thought that's what was going on. Smythe’s argument is that it misses the point. If the trad orthodox view of economics is getting it wrong, what do the media companies actually produce?
What is the commodity form of advertising sponsored communications under “late capitalism”, or “monopoly capitalism” as Baran and Sweezy would say? The answer is audiences and readerships, or just the audience. The audience commodity here, the labor power of the workers, is resold to the advertisers. This is normally in the parlance of the time called the Consciousness industry.
So remember this: TV stations and walled platforms on the internet are factories that produce audiences for advertisers. That's what's coming outta the end of the factory. So that's a lot of the overarching stuff. Let's get into some of the specifics. Smythe has eight main points, and we're gonna cover these quickly and then move on to how it connects to the social media platforms: Threads, Facebook, Twitter, TikTok, AOL, Reddit, whatever.
So Smythe’s questions are in order. Here we go. Question one, what did the advertisers buy with their money? Answer: the services of audiences in predictable numbers. It's a service economy and we are the ones providing the service. We're also ones being a served up, which is, I guess, ironic. The commodity is the collective.
Question two, how do advertisers know what they're getting what they're paid for? Well, various rating agencies back in the day, like the Nielsen's and whatever, and the analysis, which has largely moved in-house for streaming and internet platforms. There's a whole host of stuff that falls under the umbrella of market research.
Question three, what institutions produce the commodity that advertisers want? Well, we've hinted at this, but it's principally and traditionally the owners of TV and radio stations and newspapers and magazine publishers, and we can add most web platforms to this nowadays 'cause they all work on the same model. Of course there's a host of secondary producers in industries that provide content for the principal market, obviously, but this is the main outlet.
Question four, and what is the nature of that content in economic terms under monopoly capitalism or late capitalism? Well, it's an inducement. It's the free lunch that attracts the audience to the saloon. It gets 'em in the door and encourages them to stay. Now this speaks nothing to the cost, the quality, the format. In fact, the cheaper that this can be procured, the better. A free lunch isn't free, obviously, but someone is providing the bread and the meat, and if the users bring their own, it's the case of social media then even better. And what are those users doing?
Question five, what is the nature of the servers performed for the advertiser by members of the purchased audiences? Well, the audience commodity is in economic terms, a non-durable producer's good bought and used in the marketing of the advertiser's product. The work that the audience is doing is to learn to buy and consume various brands of products and spend their income accordingly.
If they can develop brand loyalty while doing this, then that's fantastic. Now, there's a whole lot of work that goes into that learning. It's like the reproduction of ideology and Ian terms and a whole lot more going on. But we will again, delve into this and either later in this episode or in future episodes as we keep this going on, but for Smythe, question five is all about the management of demand.
And question six is the big one: How does the management of that demand relate to the notion of free or leisure time under the labor theory of value? And for Smythe the answer is: the goal under monopoly capitalism is for all non-sleeping time to be work time for most of the population. I'll let you do the math on the missing percentage yourself, but basically free time and leisure time are all turned into work time and in the 21st century, even work time can do double duty as branded elements take place within work.
Now Smythe goes on for about four pages in answering number six. It's this key point and there's a lot to unpack there. So again, we're gonna circle back, but in the interest of brevity:
question seven, does the audience commodity perform an essential economic function? Well, the answer there is “it's complicated”. As noted above, Orthodox theories didn't really go into this, and mass media and brands were before Marx's time, so he didn't have much to say about them either. Smythe turns to Marx's Grundrisse to tease out an answer where production produces consumption, which is, I think page 91 and 92. There's a whole paragraph on it. So yes, there's an essential economic function that's taking place, but again, it isn't what we think it is.
Question eight addresses some of that, what we touched on earlier, which is why have the traditional Marxist economists been indifferent to the role of advertising? They were focused on content instead. Again, this is in the seventies, and it was obviously shiny things. The content was front and center, so people thought that that was what was going on. Remember, this is 1977, a full decade before authors Edward Herman and Noam Chomsky were publishing “Manufacturing Consent”, even though this was contemporaneous with some of Edward Herman's earlier writings.
Now Smythe had actually published two versions of this paper. The peer reviewed article from 1977 that we've been using, and again, it came up as a chapter in 1981's Dependency Road. These are again, foundational, critical for understanding what's going on, but what does it mean for right now? Now as I'm recording this, on the evening of July 6th, 2023, Facebook has just launched Threads their Twitter competitor within the last 24 hours.
Earlier this week when I was writing it, I thought the main argument would be the Reddit implosion and Twitter's issues, which were leading to a mass exodus of users looking for an alternative and heading towards the Fediverse, including Mastodon, which is an ActivityPub protocol tool that's very similar in some ways to early Twitter.
Earlier, back in June or a thousand years ago, it seems, there was a lot of discussion on the Fediverse because there was news that Facebook was using the ActivityPub protocol for their Threads tools. All of this has gone by in like, you know, Lightspeed, where weeks, sometimes decades happen, right.
Anyways, when I started drafting this in response to those particular events and the general bad idea of engaging with Facebook on anything, (we'll get into what Triple E means, probably in a future episode too), the online universe was vastly different. The Reddit moderator strike wasn't even a thing that had happened yet, and even though there was problems at Twitter, it didn't seem to be the mass expulsion that happened on July 1st.
So let's tie it back to our main characters. Both Meta and Alphabet, Facebook and Google are well entrenched as advertising companies at this point. There's no surprises going on there, and it's also, it's reasonably well known what's going on when the auction service is used, being detailed in this explainer from the markup (see below). I'll put the link up in the show notes here. I.
They also have a wonderful explainer article going into the breakdown of market segmentation that's done by, in this case, Microsoft and their Xandr platform, but actually takes place behind the scenes by all of these major social media companies. And these major companies know exactly what they're doing, or they get into troubles when they lose sight of exactly what their core business model is serving up an audience to their customers, the advertisers.
Often they get themselves distracted by thinking themselves of content providers, and really that's not the case. The most famous example of this would be like AOL. When they bought Time Warner and moved into providing content on a more regular basis, they kind of lost track of what they're doing. Their subsequent failure and being overtaken by like everything else on the internet really speaks to them losing sight of that fact and investing in areas where they shouldn't have. If AOL had focused on either infrastructure or their core business model, the audience, they would've weathered the dot-com bust significantly better than all the other companies out there.
But they got distracted by the shininess of Hollywood and thought that they were in the content business. So too, for Reddit and Twitter is some of the problems that they've had or because of moves that they've made to protect that content. But they can be forgiven slightly because there's something that changed, something that Smythe didn't foresee back in 1977.
And that's AI. See AI flipped the equation around a little bit and turned all that user generated content stuff provided by the labor of the audience for free into something useful data for their large language models. You can understand why Elon Musk and Steve Huffman are a little bit miffed. Imagine you had a lumber mill and someone came in and took a look around and said, “Hey, you're doing anything with all that sawdust?” and he said “No, take it”. And then they took that useless byproduct and added a little bit of glue to it, and all of a sudden turned it into, I don't know, designer Swedish furniture and made a mint. You'd be like, what's going on here? And try and stop them from taking the sawdust and figure out how to use it yourself, because all of a sudden, that stuff's gold.
Jerry Gold. Because they didn't know it or didn't understand the process, both read it and Twitter in the process of lighting a fire in their factory and burning it to the ground. And meanwhile, the users, the audience commodity that was driving their business are all exiting stage left. And that pretty much gets us up to now.
Now we haven't even gone into some of the other events like TikTok and the proposed ban that seems to be continually ongoing or some of the other social media networks or television, broadcast tv, what's happening over there. And we also haven't really gone into Threads and their use of the ActivityPub protocol that we kind of hinted at it.
But we need to get into something else related to that. And that's a philosophy called Triple E or Embrace Extend Extinguish, but I think that's gonna be a whole other video. Things are moving pretty fast and I'm just one guy. So for now, we'll just wrap this up and try and catch the next one. I'm Dr. Implausible. The audio will be available over on the Implausible Pod and the text of the show should be available on the blog or in the comments sometime soon. The whole show is produced under the Creative Comments Attribution Sharealike 4.0 International Public License. We'll try and make this one look prettier as I figure out how this whole video thing works.
But in the meantime, the world's moving pretty fast, so we'll see what it looks like in a week or so. I'm Dr. Implausible. Have fun.
Other links and references:
Baran, P. A., & Sweezy, P. M. (1966). Monopoly Capital. Monthly Review Press.
Smythe, D. W. (1981). Dependency Road: Communications, Capitalism, Consciousness, and Canada (Revised ed. edition). Praeger.
Eastwood, J., Hongsdusit, G., & Keegan, J. (2023, June 23). How Your Attention Is Auctioned Off to Advertisers – The Markup. https://themarkup.org/privacy/2023/06/23/how-your-attention-is-auctioned-off-to-advertisers
Keegan, J., & Eastwood, J. (2023, June 8). From “Heavy Purchasers” of Pregnancy Tests to the Depression-Prone: We Found 650,000 Ways Advertisers Label You – The Markup. https://themarkup.org/privacy/2023/06/08/from-heavy-purchasers-of-pregnancy-tests-to-the-depression-prone-we-found-650000-ways-advertisers-label-you
