The sharecroppers’ tools

MySpace has restricted its members’ ability to stream on their pages videos hosted at Photobucket. A clear violation of the spirit of Web 2.0 – the sixties got free love; we get free widgets – the move has set off an outcry in the blogosphere. A revolt, we’re told, may be in the offing, as fed-up MySpacers pull up stakes and strike out for unfenced territories, where the deer and the antelope play.

Maybe. Maybe not. The gravitational pull produced by the network effect can be pretty strong.

It’s worth remembering that the business model of Web 2.0 social networks is the sharecropping model. After the Civil War, when the original sharecropping system took hold in the American south, the plantation owners made money in two ways. They leased land to the sharecroppers, and they also leased them their tools. It’s no different this time. The payments for land (Web pages) and tools (video widgets et al.) don’t come directly, through exchanges of cash, but rather indirectly, through the sale of advertisements. But the idea is the same. If there’s a widget that can accommodate advertising, that tool will be supplied by the plantation owner, not by some interloping varmint. Whine all you want, but that’s the way it’s going to be.

Now, if the interloper would like to pay for the privilege of being a tool supplier on the plantation owner’s land, well, that’s a different story entirely.

4 Comments

Filed under Digital Sharecropping

4 Responses to The sharecroppers’ tools

  1. alan

    A story that’s bound to unfold as the various sites settle in for the long haul and become entrenched in traditional thinking along the lines of, well, greed. The big difference must surely be that the interlopers in this case didn’t intrude. The sharecroppers who unwittingly thought that the spirit of Web 2.0 is here to stay and all things Web 2.whatever comes next will be rosy, just used their tools! As the phenomena of social networking becomes better understood and manipulated by the revenue scouts we will probably see many such bumps in the trail. There are no axles to break but I’m hoping that the crowd will have the grit and commonsense to upgrade. Let’s hope that the next free and wild buggy ride that allows them the reins is already coming down the track. Alan

  2. I don’t know how useful the “sharecropper” analogy is, but I do know that stories like this can be easily explained by referring to that old saying, “there ain’t no such thing as a free lunch.” When Twitter starts posting ads on individual tweets you’ll see what I mean.

  3. I disagree that the platform provider (this time the social network) should just do anything that can be monetized.

    Some of the best innovations have come through collaboration with third parties, by leveraging outside help to create these tools, the platform provider can save development costs and also benefit from the increased amount of users that have come due to that widget being available (either directly or indirectly) and make money from there generic advertisements (not specific to the widget).

    I believe that by having a solid ecosystem of providers with mutual respect between the widget creator and the platform provider a sustainable and profitable relationship can form between these two parties.

    I have posted here on my blog http://danielgardner.wordpress.com/2007/04/12/5-things-social-networking-sites-can-learn-from-salesforcecom/ a proposal of how social networking sites could improve there relationship with widget providers and make a more direct monetization strategy, the same could be applied if widget providers embedded advertisements in there widgets and revenue shared with the platform.

  4. Nice insight, much thanks!