Platforms and Cultural Production. Thomas Poell

As a result, publishers are forced to invest heavily in digital advertising campaigns if they want to reach audiences and get noticed among the never-ending glut of digital content. Facebook’s and Google’s data are richer and their targeting capabilities better than many of their competitors, granting this duopoly significant influence over the digital advertising ecosystem. Therefore, they can set measurement standards and rates, and enforce idiosyncratic regulations with virtual impunity.

Conclusion

This chapter has demonstrated how platforms are becoming central markets in key segments of the cultural industries, as an increasing number of cultural producers create, distribute, market, and monetize content and services through these “matchmakers.” This affects, in turn, how cultural producers operate as economic actors. Aligning their business models with those of platforms, they become subject to the economic dynamics of platform markets. For one, in platform-dependent modes of cultural production, “winner-take-all” dynamics, which have long characterized the cultural industries, are further intensified. Like other digital markets, platforms allow for direct network effects; the more users who join the platform, the more valuable it becomes. Yet, unlike other markets, platforms are also characterized by indirect network effects. That is, when more end-users join a platform, it becomes more valuable for complementors, and vice versa. When positive, these network effects not only enable platforms to rapidly become dominant markets, they also lead to greater disparities between cultural producers. While some creators, game publishers, and news organizations become hyper-visible, others remain largely invisible.

      Second, cultural producers as complementors are subject to the volatility of platforms markets. In their efforts to entice end-users and complementors to join while staving off competition from legacy media companies, telecoms, and other platforms, platform companies are constantly evolving, changing pricing models, and adjusting access to their market. While all markets are inherently dynamic, platform markets are particularly capricious. When a platform has just launched, it tends to be highly accommodating to cultural producers, as it tries to grow its complementor population. When it reaches a “mature” stage, however, it can alter pricing models and platform regulations on its own terms, which instantly impacts tens of thousands of content producers. In the second half of this book, we will come back to this issue of volatility by pointing toward the precarity of platform labor and the contingent nature of platform creativity.

      For now, let us return to the central argument of the book concerning the reorganization of power relations in the cultural sector. In economic terms, we can observe that platformization involves a simultaneous decentralization and centralization of economic power. Especially early on in a platform’s development, this process opens up new economic opportunities for cultural producers to find audiences and generate revenue. These opportunities are open not just to large media companies, but also to individual cultural producers. As such, platformization furnishes the potential for individual producers to be economically emancipated from legacy media companies. At the same time, when network effects materialize, platformization leads to extraordinary concentration of economic power held by a handful of platform corporations. In combination with the constant evolution of platform markets, this concentration of power is particularly problematic for cultural producers, as it exacerbates the uneven distribution of resources and other forms of economic inequality.

Notes

      1 1. It was through a social game that Cambridge Analytica, the company at the heart of the 2016 US elections scandal, was able to harvest so much user data. In the early 2010s, Facebook put very few restrictions on “social application” developers to collect user data (Bogost, 2018).

      2 2. For every dollar in revenue Zynga generated in optional purchases, the company had to transfer 30% to Facebook, which amounted to “12% of Facebook total profits in 2011” (Willson & Leaver, 2015: 150). In the years after, this specific source of revenue – payment fees – would dwindle relative to advertising revenue, which became Facebook’s main revenue driver.

      3 3. In the context of this book and this chapter we are always talking about digital games rather than physical games, such as card or board games.

      4 4. See van Dijck & Nieborg (2009) or the work of Nicholas John (2016) for critical reviews of such discursive interventions.

      5 5. A business model is “the set of activities a firm undertakes to create and capture value, including identifying products or services, revenue sources, customer base, and details of financing” (Rietveld & Schilling, 2020: 28).

      6 6. Google subsidiary YouTube, the Japanese video-sharing service Niconico, and Tencent, to an extent, are all examples of platform companies that mix media company behavior – e.g., via investment in original IP – and aggregate massive numbers of institutional connections with complementors (Cunningham & Craig, 2019; Steinberg, 2019).

      7 7. When platform companies do invest billions in original content, for example in the case of Apple (Apple TV+) and Amazon (Amazon Video), it is to compete directly with other video-on-demand portals and to make other, more profitable parts of their business more attractive to end-users.

      8 8. In late 2020, Apple launched its App Store Small Business Program, which lowered its transaction fee to 15% for those app developers earning less than $1 million in annual sales.

      9 9. https://itunespartner.apple.com/en/books/faq/Payments%20and%20Financial%20Report Getting%20 Paid. Add to this: “To receive payment, you must have provided all required banking and tax information and documentation, as well as meet the minimum payment threshold.”

      10 10. See: https://developer.apple.com/app-store/business-models/.