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The Underbelly of the Platform - Can We Put a Price on Human Interaction?
Melvyn Tang
As more and more aspects of life become digital, what are we exchanging for greater convenience? Could platform economies that already determine the rules and parameters of our online activity come to shape our social, in-real-life activity as well?
Whether you want to order a taxi, look up a new restaurant or search for a video, chances are you are using some form of digital platform. With the examples of YouTube, Facebook, and Twitter, this is, in most cases, a technology company, through the use of algorithms and big data, that provides an online marketplace, whether that is to purchase and view physical goods or to gain access to a service such as entertainment. The ease with which we use digital platforms is unprecedented in human history; free at the point of use, even allowing content creators, self-made entrepreneurs, and the like to generate income for themselves with much lower barriers to entry. But what are we exchanging for this convenience? When, if ever, does it cross our minds how platforms, in particular social media platforms, shape behavior and norms?
The Market Makers
Digital platforms and the massive investment of capital into them over the last couple of decades are primarily driven by the hope for a new form of value creation – namely, the commercialization of products or services offered by individuals, packaged in an entirely virtual service that connects the supply and demand sides of a marketplace en-masse, creating a central destination to which buyers and sellers alike are drawn to. By creating a big data backend generated through user data on their content preferences, engagement patterns, and so on, the platform ensures that consumers seeking a particular service or product can be matched up with a suitable provider that matches their needs, whether that is based on locational or behavioral data.
Platform economies are therefore made up of three components – the company which provides the digital platform and terms of use, the supply side made up of independent contractors, and the demand side made up of users. Through playing this role as an intermediary, platform companies have the ability to act as market-makers for things that previously may have been intangible. YouTube is a perfect example of this in the way it marketizes how much a 'creator' can grab an audience's attention by placing a numerical and monetary value on watch time, subscriber count, and engagement with content. Even though content creation is what YouTube is most known for through the 'employment' of creators on its platform, in reality, the service it provides is advertising for the businesses who wish to use YouTube's huge dataset to place their products in front of the consumers most likely to buy them. In this case, YouTube's platform creates a market in which attention itself becomes the traded commodity. Marrying up its vast supply of advertiser-creators with an increasing demand for new content, particularly as digital media becomes how consumers and businesses alike interact, turns the 'work' involved in traditional marketing and advertising into entertainment. As a result, YouTube creates a market for the products that its clients want to sell through the vehicle of attention-grabbing videos and now reels.
All in all, platform economies are consumer data companies – taking the traditional format of selling goods or services from businesses to consumers, platforms streamline and tailor this process with a deep and detailed understanding of how consumers behave. Therefore, they can set the price, the incentives, and the rules of how users interact on their platforms, creating from scratch the parameters and workings of their respective markets.
Selling Social Relations
Are there dangers to this kind of business model? Well, the speed at which platform companies have been able to scale should be an initial warning sign. The fact that platform economies are mostly virtual means that they are able to grow exponentially simply by attracting more users, while companies are responsible for the costs of maintaining and providing the incentives to use the said platform. In this way, there is a power imbalance. Just the act of watching a 5-minute video on YouTube or liking a post on Facebook multiplied by the millions of users informs that platform what the best way to capture your attention is to keep you in the loop as a consumer. Individuals within the platform economy become a commodity, with every digital interaction being converted into a data point to be traded to platform stakeholders for the sake of its own profit and growth.
Now, of course, this is what individuals consent to when signing up for the terms of use; it is generally known that platform companies will use your data to improve their offerings or tailor new products and services to meet consumer needs. What users cannot consent to, however, is the exploitation of social networks that occurs, what has been called the emergence of an "emotional capitalism” - defined by Han Byung-Chul in his book ‘The Burnout Society’ as a conversion of emotions into resources for increasing productivity, work and profit. Pre-platform economy, a show of appreciation or expression of interest in something would be just that - a human interaction, simply raw emotion or feeling. Within the platform economy, that emotion is a signal, converted into information that triggers more content and more products and services. In this way, platform economies can subtly influence behavior through positive reinforcement that leads consumers to want and demand more. At the same time, platform companies have the incentive to become increasingly entrenched in our daily lives, providing the corresponding goods or services for each and every feeling we have through expanding the capture of behavioral data.
As such, while monetizing and selling your data may be acceptable to users, it subtly shifts us onto a path of increasing consumerism regardless of consent. The incentives that draw us to partake in the platform economy also keep us there, in the same way that the 'traditional' global market has grown to encompass wide-reaching networks of goods and services which we can no longer live without.
Should We Go Backwards?
We certainly cannot call for the destruction of the platform economy, nor can we completely shut ourselves off from the digital world where most of our interactions now start and finish. Instead, we can look at the core issues of the platform economy - namely, that platforms do not hold the best interests of consumers at heart. How can we redesign platforms to the ones that no longer work for the sake of promoting products and services in excess but actually have an offering that consumers need?
More and more, the idea of quality over quantity seems like an obvious answer. A recent Substack newsletter called Every came to my attention that offers a different model of a media business – a collective operating on its own editorial and financial structure. By funding writers with a cut of subscription revenue and a salary, in addition to a more collaborative writing format that matches industry experts with a corresponding writer, relationships between stakeholders are much closer and more transparent. Writers can establish more intimate relationships with their audience who directly fund their content, platform sponsors are a part of the community that Every builds, and overall what is being sold remains not additional goods and services but the quality of writing itself. Of course, this may only work on a smaller scale where you can establish a tight-knit audience interested in the specific niche you are working in.
On the other end of the spectrum, the open-source movement has drawn some attention calling for greater transparency in commercial digital platforms and products, in particular, the opening up of the big data sets and code that go into creation and maintenance to the general public. Theoretically, this is a step towards a more decentralized Internet where companies don't hold monopolies over digital services and networks.
To sum up, what needs to happen is more suitable regulation of the relationship between platform companies and their audiences. Specifically, in the case of social media platforms, exploitative mechanisms that implicitly push consumers to certain products or behaviors that benefit third parties can be reconfigured to benefit consumers themselves.
Melvyn Tang is a student at the University of Warwick (UK) and Shanghai Jiao Tong University (China), with a background in History, Politics and Sustainable Development. Growing up throughout a unique time in West-China relations, Melvyn is passionate about cultural diversity and the intersections between inequality and global development.
This article is featured in JUSTIN Development Review (JDR) December 2022 Issue