The economic and social value
of information in the network society
By José Moreno
Abstract
In this paper, our purpose is to investigate the economic and social value of information in
the network society. We analyze the changes taking place in the way information is distributed in society after the massive adoption of new digital information and communication technologies and try to understand if and how those changes impact the economic and social
value of information. The network architecture of the information paths in society, the prominence of computers in the information and communication management and the migration
from analog to digital technologies seem to have profound consequences on the economic
and social value of information. Our hypothesis is that the network society, with the corresponding social uses and appropriations of digital technologies, decreases the economic
value of information and increases its social value. To test that hypothesis we first look at the
economic data of the companies that distribute information, the old mass media and the “new
media” of the digital age. And then we study the way information is distributed and disseminated in society using those same digital technologies, namely thought popular online social
networks such as Facebook, to see if and how that social use corresponds to an increase of
social value to the people who use it. We expect to demonstrate that the business model of
the mass media is not sustainable in the digital environment, that the “new media” of the digital age are only profitable on a global scale and that the causes for the decreasing economic
value of information are the same that explain the increase in tis social value.
Keywords: network society, information, economic value, social value, mass media, business models
[Note: This paper is translated from the master thesis “O Valor Económico e Social da Informação no
quadro da Sociedade em Rede”, submitted to evaluation on ISCTE-IUL in June 2014]
1. INTRODUCTION
The network society has changed profoundly, and is still changing, the way we organize and connect with each other in the social context. One of those changes concern the way
information is distributed throughout society. From a society in which mass media had the
leading role in the distribution of information relevant to society, we transitioned to a network
society in which there are new agents and new ways to disseminate information in the social
body. The purpose of this paper is to analyze those changes in a double perspective. First,
from an economic point of view, by looking at the way the business models of the traditional
mass media have deteriorated in this transition. And, secondly, from a social point of view, by
analyzing how those changes affect the way we use information to connect with one another
in the social context.
Our hypothesis is that the current deterioration affecting the business models of the
traditional mass media is not the result of their own actions or omissions, but rather the necessary result of a general decrease in the economic value of information as a result of the
referred changes. On the other hand, our second hypothesis is that those same features,
that are at the basis of the decreasing economic value of information, are responsible for an
increase in its social value, as a result of the abundance of information and the range of new
possibilities that the manipulation of digital technologies permits.
In the first part we will review the available literature on the three main areas involved
in this investigation: the network society, the economic value of information and the social
value of information. Then, we will detail our hypotheses and the methodology that will be
used to study them. In the third part we will look at data regarding the evolution of the revenue streams in digital and analog media, first with global generic data openly available and
then with specific data from the weekly magazine Autohoje. We will progress our analysis
from the most general to the most specific. In the fourth and last part of this paper we will
gather the results of several studies on the way individuals engage in social connections via
online social networks and how that increments or supplements their social capital.
This is not an empirical study; this is a theoretical study that uses empirical data to
support its arguments. The purpose is not to produce new empirical data or produce new
knowledge from empirical data. The purpose is to produce new knowledge from the establishment of novel relationships between previously existent concepts and variables and its
combination with the existent empirical data.
2. THEORETICAL FRAMEWORK
The literature review for our subject has two different purposes: the first, to establish
the theoretical framework of the study; and, the second, to clarify some of the basic concepts
that are used. We begin by clarifying what we understand by network society and what are
the changes that it implies on various levels relevant to this investigation. Then we will analyze some theoretical contributions regarding the economic approach to information distribution in the digital era and we will conclude this part by looking at other contributions that have
been made to understand the social value of information in the network society.
2.1.
The Network Society
The network society in which we now live is the result of the social adoption and appropriation of a collection of new information and communication technologies that developed in the last 50 years. The ways by which that collection of technologies was integrated in
the social process and adopted by the individuals changed radically – and is still changing –
the way we communicate with one another and the type of social connections that we build
with those technologies.
The final outcome of these changes is not the mere result of the technology but rather
the product of the interdependence between these new information and communication
technologies, the economic models of the media and the type of social appropriations that
individuals make in regard to those technologies (Cardoso, 2006:119). In other words, those
technologies are not in themselves a determinant factor, but they present an array of possibilities, both at the individual and social levels, that condition the uses of technology but are
also conditioned by them (Benkler, 2006:17).
Manuel Castells was the first to use the concept of “network society” as we understand
it and to frame it within the global changes we are witnessing, in a broad collection of published works, namely “The Rise of the Network Society” (Castells, 2011). To Castells, the
network society emerges in the transition from a social paradigm in which the domination of
energy was the determinant factor – the industrialism – to a new paradigm upon which the
decisive element is the domination of information – the informationalism (Castells, 2011;
Castells, 2004; Cardoso, 2006).
To Castells, the network society is a particular architecture of society in which the social structure is nurtured by digital information and communication technologies, through
computers connected to one another in the form of a network (Castells, 2004:3). The network
society is organized in nodes – individuals or institutions – and it is through the information
that flows between the nodes that individuals and institutions establish and organize their
social connections (Castells, 2004:3; Castells, 2009:20). Hence the importance that deep
changes in information and communication technologies may have in the way individuals and
institutions connect in society and the social architectures and procedures they build with
those technologies.
The distinctive attribute of a networked social organization, as opposed to a vertical
and hierarchical one, is that the network has no center and, therefore, cannot be commanded from a central point. To Castells, three factors relating to the digital information and communication networks explain why the network became its structuring paradigm: first, these
networks have a capacity to process information, both in volume and complexity, that is historically new, and have the ability to self-expand; second, these networks have a capacity to
combine and recombine information, due to the use of digital technologies that was also unknown; and, third, modern information and communication networks are extremely flexible,
also due to their digital nature (Castells, 2004, 9-11). To Castells, the digital information and
communication networks are global and therefore the social structures that are sustained by
their data flows will also tend to be global (Castells, 2004, 22). However, the social existence
of most individuals is still confined to local, regional or national borders. According to Castells, from the clash between these two conflicting logics results a fragmentation that is more
than just the result of a transition between two very diverse ways of organizing the social
experience. To Castells, that fragmentation of the existing social structures is in itself a structural element of the network society (Castells, 2004, 23). As we shall see, that applies to the
ways by which the social distribution of information is being affected by those technologies
and meets our thesis in this paper: the fragmentation that affects the business models of
traditional media – which are of course a particular way of organizing the social distribution of
information – is not the mere result of a transitional and adaptive stage; it is a structural element of the new information and communication paradigm of the network society.
The same logic can be applied to the problematic of value in the network society. To
Castells, in a capitalist society those who hold power are the ones who decide what has or
does not have value. Hence, with network structures of global reach, the conditions for the
creation of value are necessarily altered and the entities that cannot have a global reach are
in a disadvantageous position in relation to those that can. Again, this has obvious practical
implications for the traditional media, which are usually created and operated in a national or
regional logic. Because of that, those media are in a position of disadvantage regarding the
“new media” of the network society, which tend to be global in its nature, as we will see.
To Manuel Castells, the information and communication technologies in the network
society dilute the traditional distinction between mass media and interpersonal media, creating a new mode of communication to which he calls “mass self-communication” (Castells,
2011; 2009). It is a form of mass communication because its reach is potentially global. But,
at the same time, it’s an interpersonal form of communication because it can be individually
produced, distributed and consumed, benefiting from the convergence and flexibility permitted by the digital information and communications technologies and tools.
This outcome is the combined effect of a distributed computation capacity and its organization in the form of a network. By combining multiple computers, of various types, connected to each other in the form of a network, the resources to manage the communication
tend to be located in the network itself. And that is why the network converts into the ideal
social system for processing information (Castells, 2011:52), overcoming the linear communication channels of the past.
Finally, Castells also identifies five elements that constitute the material foundations of
the network society: first, information is the raw material of the network society. The previous
stages of information and communication technologies generated information that acted on
the technology. Now, on the contrary, we are dealing with a new kind of information and
communication technologies that act on information itself. (Castells, 2011:70). Second, considering that information is part of all human activity in society, these new information and
communication technologies are present in all aspects of social life and therefore so are also
its effects. Third, any use that is made of these technologies enters inevitably in network logic. And that means that also the network logic ends up spreading to all aspects of social life.
Fourth, these new information and communication technologies allow an almost complete
flexibility on the way information is used and communication established. And, fifth, these
digital technologies tend to push convergence between different kinds of messages into one
single global system, both at production and at distribution and manipulation of information
(Castells, 2011:72).
Another sociologist that studied deeply the network society and its characteristics was
Jan van Dijk, namely in his book “The Network Society” (2006). To van Dijk, the network society is the central nervous system of society and corresponds to a social formation on which
the social and informative infra-structures, organized in the form of a network, constitute the
basic mode by which society organizes at the individual level, group level and social level
(van Dijk, 2006:20). On the contrary, in the mass society that existed before the network society, the social infra-structure was composed of groups, organizations and communities of
larger or smaller number (some were the “masses”), and that was the characteristic that
conditioned all the forms of social organization (at the level of the individual, the groups and
the society as a whole). This means that the basic determinant unit for the social functioning
is no longer the broad social group – the masses – but rather the network itself (van Dijk,
2006:20), which is a similar approach to that of Castells. From a mass society in which the
social organization was mostly based in groups with different sizes and functions (families,
cities, nations, companies, armies, governments, etc…), with strong connectivity and density
and clear power holders (van Dijk, 2006:33-34), we transitioned to a highly individualized
society, in which one’s social experience is both local and global and transcends the social
groups to which he or she belongs, complementing them with a new set of bonds that are
weaker and lengthier than traditional ones (van Dijk, 2006:35-36). Like Castells, van Dijk also
identifies the fragmentation of traditional social units (family, city, state, nation, enterprise,
etc…) as one of the characteristics of the network society, along with a more prominent role
played by the numerous weak social links one develops. On the other hand, van Dijk also
mentions, like Castells, the dilution of space and time traditional markers that is induced by
the new digital information and communication technologies. Considering all these elements
of analysis by van Dijk, we can draw the conclusion that to this sociologist – same as to Castells - the traditional mass media are one of the social units whose social function is deconstructed – “fragmented” would be a better description – by the massive adoption of digital
information and communication technologies.
To van Dijk, the advances in microelectronics, the digitization and computerization of
communication processes (van Dijk, 2006:44), in conjunction with the availability of broadband connections and the consequent massive transfer of data (van Dijk, 2006: 49-51) are
the technological foundations of the network society. Resulting from the convergence effect
those technologies endorse, the internet integrates data communication as well as mass and
interpersonal communication (van Dijk, 2006:54) and places all the information that circulates
through any form of communication under the supervision and command of computers.
The third most important narrative about the network society and its characteristics was
authored by Yochai Benkler along several books and papers, mostly in his known “The
Wealth of Networks”. Benkler himself asserts that, in relation to Castell’s approach and although agreeing with it, his perspective on the network society is based on the relative role of
market and non-market sectors in the production, distribution and consumption of information
knowledge and culture (Benkler, 2006:18). In a certain way, Benkler’s approach openly faces
issues that both Castells and van Dijk had left unresolved.
First, Yochai Benkler considers that the way we organize the production, distribution
and consumption of information, knowledge and culture influences the way our societies
work (Benkler, 2006:1). And, secondly, he also considers that, in the network society, those
conditions have radically changed, giving prominence to the sharing and social exchange as
a way to make such production, distribution and consumption of information, knowledge and
culture (Benkler, 2006:92). This means that the new digital information and communication
technologies are not only a threat to the dominant agents of the prior mode of social production of information – the mass media – but also an opportunity for the emergence of new
forms of social production of information, knowledge and culture resulting from the individual
action of people and from different systems of cooperation between them (Benkler, 2006:2).
To Benkler what is new in the digital era is the paradigm of social distribution of information
as we enter what he calls the “networked information economy” (Benkler, 2006:32). And, on
the other hand, other thing that is also novelty is the fact that this change makes the production of information, knowledge and culture available to all the population. In the past, the
technical entry barriers caused that information would be distributed through proprietary
channels established according to market laws – the mass media. When those technical barriers disappear, a non-proprietary sector, not subject to the laws of the marketplace, tends do
flourish as a source of information, knowledge and culture (Benkler, 2006:4). When you perform a search in the Google search engine, for example, the system produces a response,
an information “good”, that is the coordinated effect of a set of uncoordinated actions performed by a large ensemble of social agents, both individual and collective and profit-seeking
or not (Benkler, 2006:33). The effect is coordinated because Google prepared its algorithm to
respond in a given way to a given query. But it’s the result of a group of uncoordinated actions because the construction of that outcome is a consequence multiple searching and
browsing behaviors that the users did not coordinate amongst themselves.
To Benkler, the network society expands the ability of individuals to participate in the
process in at least three ways: first, it increases their individual ability to produce information,
knowledge and culture; second, it increases their ability to do that production in cooperation
with other individuals and outside the traditional social and economic modes of organization;
and, third, it also increases their ability to produce information whilst in formal organizations
outside the sphere of the market (Benkler, 2006: 8). To Benkler, that corresponds to a form
of decentralization of capital, considering that a part of the capital structure necessary for the
production of information, knowledge and culture will now be controlled by the users
(Benkler, 2006:30).
From the quick review of these three authors, we can conclude that the network society
mediated by computers encapsulates two components that cannot be dissociated and that
work in tandem to produce the results we observe: the architecture in the form of a network
of nodes, on one side, and the fact that this network is mediated by computers, on the other.
The mediation through computers is a decisive feature that mostly results from the migration
from analog to digital technologies. This element, because it’s decisive, will be detailed in
what follows.
2.2.
From analog to digital
The current network architecture that supports the internet and its social distribution of
information would not be possible without the mediation of computers. And leads us to look
carefully at the migration from analog to digital as a central element to understand the technological changes we are studying. To Castells, the transition from analog to digital is the
technological layer upon which all other developments at the level of computation, microelectronics and telecommunications take place (Castells, 2011:70). And that’s why this particular
shift is at the heart of what has been the evolution of the information and communication
technologies in the last 50 years. Van Dijk also considers the migration from analog to digital
as being the decisive factor that makes data communication and computerization two of the
main elements of the infra-structure of the network society (Van Dijk, 2006: 44).
The digital codification of data that supports information involves two basic dimensions
that explain its prevalence. First, digital codification in mathematical and therefore it fits the
basic mathematic calculus rules on which computers operate. And, second, the digital mode
of codification is binary. Made from complex strings of simple “zeros” and “ones”, the digital
“language” has an “on-off”, “yes-no”, “true-false” functioning logic. That means it has no middle term. And that’s one reason why it’s so apt for the sophisticated calculating machines we
now call computers. The binary signals that make the digital code are like the DNA of digital
information (Negroponte, 1995:14; Castells, 2011:54). A given digital code can always be
decomposed and recomposed using its constitutive units in any machine that is able to manipulate it, which means any computer. By comparison, any information coded in an analog
mode of codification will be limited to the physical constraints of the object or matter that
supports it.
Digitization is therefore the process by which any form of information, whether a text, a
sound, an image or a video, is converted into the binary language that is used inside the
computers (Hamelink, 1997). There are two ways by which the digital mode of codification
tends to pervade all the information production and distribution that is made in society: the
creation of new informative content in originally digital format and the digitization of infomative content that existed previously in analog format and makes part of our collective
memory.
Nicholas Negroponte attributes digital technologies four basic qualities with large implications on the respective social uses and appropriations: they are decentralizing, globalizing,
harmonizing and empowering (Negroponte, 1995: 229-231). Castells considers that the ongoing informational revolution will probably be even more important than the invention of
printing press, because it establishes a feed-back circuit that will push for further development and dissemination of information technologies (Castells, 2011:30-31). Manovich also
stresses that, differently from other information changes in the past, the digital communication mediated by computers affects all stages of communication and all types of media (Manovich, 2001:43).
Combining the contributions of the diverse authors studied for this literature review, we
can signal out five main repercussions on the way information is produced, distributed and
consumed in the social body that are the combined result of the new digital information and
communication technologies and the way they are used. The first of those effects is convergence, a concept that refers to the fact that the devices that are prepared to produce and
receive digital information are – precisely because they are digital - capable of handling all
types of content – text, audio and imagens, both static and moving. The fact that this allows
for the easy expansion of the types of content one can produce and distribute led many traditional media to add audio to text or video to audio or text to video, for instance. Today this
trend is still evolving and it is common to see media outlets that traditionally were print beginning to explore video, for example. For the traditional media, of course, this trend opens
up interesting business opportunities. But, on the other hand, it also threatens their current
business models (Negroponte, 1995: 18; Van Kamm e Bordewijk, 2003:582). Here’s why:
from one side, convergence may be understood as a “downward” process in which mass
media incorporate into their informative products and services different kinds of content that
previously were separated. But, viewed from other side, convergence may also be understood as an “upward” process by which individuals learn to use and command these technol-
ogies and take advantage of convergence themselves. Both processes occur simultaneously
and condition one another (Jenkins, 2006: 18).
The second main repercussion digital technologies have on the way we use media is
that of the metadata, an additional layer of data that characterizes and contextualizes information and does not exist in analog media (Van Dijk, 2006:45). These “bits about bits”, in the
wording of Negroponte (1995:18), are precisely the level at which computers operate, sorting, manipulating and comparing data relative to the production, distribution and consumption
of information, both individually and collectively. It’s by gathering the metadata associated
with the communication that computers can apply the algorithms with which they manipulate
information to meet the needs of the user. On the other hand, connected in a network, computers and servers can communicate with one another and share both the information and
the metadata in a way that permits any of those computers to act on both the information and
its metadata, resulting in what Castells called “pervasive computing” (Castells, 2001:51).
The third massive change that results from the shift to digital technologies is the interactivity of communication. According to van Dijk, digital media are more interactive than
analog media in three dimensions: at the space dimension, because digital media enact bilateral and multilateral communication processes regardless of the physical space where the
subjects may be; at the time dimension, because a digital communication can be enacted
instantaneously or delayed in time; and, finally, in the behavioral dimension, because, in digital, sender and receiver can change roles at any moment during the process (Van Dijk,
2006:8). Bordewijk and van Kamm, for their part, built a communication interactivity matrix,
with four quadrants, of increasing interactivity (allocution, registration, consultation and conversation) and concluded that digital media tend to “push” the type of communication to levels of higher interactivity (Van Kamm e Bordewijk, 2003:580). Negroponte, finally, also
stresses that, in the operating mode of the mass media, information is fundamentally
“pushed” by the media, whereas in the digital environment it tends to be “pulled” by the user
within his own convenience of time, space and use context. Obviously, that’s the same as
saying that the individuals exercise a higher degree of control over the process of communication (Negroponte, 1995:168-170). Castells characterized this issue in terms of “space of
flows” and “timeless time”. Space of flows refers to the fact that the information space is no
longer that of the physical space but rather that of the virtual flows of information. Timeless
time, for its part, refers to the circumstance that information may be used on whichever moment the users find it most convenient. In conjunction, these two aspects constitute what
Castells calls “the material foundations of a new culture” for the digital era (Castells,
2011:406).
The fourth distinctive feature of the digital mode of codification versus the analog mode
relates to its flexibility. The fact that the digital code may be decomposed in its constitutive
units - the bits – also means that it can be recomposed in any other computer that is in contact with the first, as is the case in a network architecture. This has two fundamental consequences. First, it hugely simplifies the reproduction and sharing of any content. That is what
explains the simplicity and reach with which from time to time apparently innocuous pieces of
content become so viral. And, second, it makes the remixing of different parts of the code as
easy as its production or reproduction. Both changes – the easiness to reproduce and simplicity with which one can to remix all forms of information – result from de dematerialization
of information that is associated with the shift from an analog paradigm to a digital paradigm.
The ability to produce, redistribute and remix information is really what turns the previous
information consumers into its producers, giving birth to a new communicative agent that
Axel Bruns called “produser” (Bruns, 2007) and that Ritzer and Jurgenson called “prosumer”,
using a term originally coined by Alvin Toffler (Ritzer & Jurgenson, 2010).
The fifth great transformation brought by the digital mode of codification is seldom
acknowledged as one and relates to the global reach that digital technologies have when
they’re combined with a network of computers. Of course, globalization is not a product of
the digital information and communication technologies. But these technologies – because
they are digital – speed up that process in ways that many times are not manifest and pass
unnoticed (Cardoso, 2006:113). This results – again – from the fact that a digital code manipulated inside one computer is immediately available, in the same conditions, to any other
computer that is connected to the first, regardless of physical location, country or language,
since both computers operate according to mathematics and both use the same digital binary
language. With Negroponte, we could say that the digital code is a sort of “lingua franca”
made of bits (1995:63) that permits to overcome the limits of geography (1996:165).
2.3.
Mass media versus “new media”
The changes induced by the network society and the migration from analog to digital
have had huge consequences on the media landscape in most developed countries. In the
mass society that, according to van Dijk, preceded the network society (2006:20), the mass
media had the center role in the system for social distribution of information. That role started
with the invention of printing, in 1495, and, although changing throughout history, remained
remarkably stable until the emergence of the internet (Benkler, 2006:29). Whether we look at
a small gazette from the 19th century, with a very limited circulation, at a radio broadcast from
the beginning of the 20th century or the operating routines of a global TV network like CNN,
the underlying informative paradigm is always the same: the transmission of information
“from one to many”, in only one direction, controlled by the sender.
In this respect, Gustavo Cardoso considers that an information and communication
paradigm is constituted by the interdependence between the technology, the media and the
business models. And, consequently, a radical change in one of these terms involves a necessary change in the paradigm (Cardoso, 2006:16). What really transforms the information
and communication paradigm that ruled the age of the mass media is the networked communication mediated by computers (Castells, 2009:24). This new communication and information paradigm changes the operating environment of the media in four ways: 1) it mixes
the roles of producer and consumer of information and thus establishes the bidirectional as
the core of the system; 2) it creates a networked architecture that allows communication to
be, at the same time, from one to one, from one to many and from many to one; 3) it grants
each individual (or node in the network) increased power over the operation of the network,
because communication no longer depends of any other particular individual (or node in the
network); and 4) it establishes a media environment where information is abundant, contrary
to the previous media environment where information was scarce (Anderson, 2006).
To van Dijk it is the simultaneous presence of integration, interactivity and digital code
that distinguishes “new media” from traditional media (Van Dijk, 2006:9). A classic TV broadcast, for example, is integrated because it includes images, sound and text, but isn’t interactive or digital. A traditional copper phone call, on the contrary, is interactive but not integrated
nor digital. With the migration from analog to digital, a television transmission can now also
be interactive and a phone call may be integrated with text or video. This means that interactivity and multimedia are two of the distinctive features of what we call “new media” (Cardoso, 2006:123).
Changes in the information and communication paradigm established by the network
society, along with the corresponding changes in the operating environment of the media,
have caused a deterioration of their traditional business models. But, simultaneously, that
same new information and communication paradigm promoted the blossoming of a new kind
of companies, with a different position in the chain of information. These are the companies
or services we call the “new media”, as opposed to the traditional mass media.
Companies like Google, Facebook, Twitter and YouTube are certainly very different
from one another. But they also share some characteristics and attributes that, as opposing
to the mass media, are common between them. First, all these companies/services tend to
act on a global scale and not a local, regional or national scale, like most of the traditional
media (Cardoso, 2006:113). Second, these are companies/services that distribute and channel information instead of producing it. They are platforms for searching, sharing and managing information, but they don’t produce the information they search, share or manage. That
information is produced by the users. This means that, considering the changes mentioned
above, resulting from the network society and the migration to digital, these are companies
whose service is a direct result of the new information and communication paradigm. It is
because they are better adapted to the new way the social distribution of information is made
that this companies prosper and other traditional media don’t. These “new media” of the network society have a global reach because the tools they offer for people to communicate and
exchange information can be used by anyone in any place, regardless of their language or
culture (Castells, 2009:96). In the mass society we discussed earlier, mass media had a precise social function for which their structure and process was suitable. Within the frame of the
network society commanded by computers, on the contrary, the “new media” we’ve been
talking about have a different function, for which, likewise, their structure and process are
adapted. “New media” do not exist to produce and distribute content, like traditional media;
they exist to supply the users with the tools they need to produce and distribute their own
content. Therefore, “new media” have a new function within the network society, one that
results from the fact that the aforementioned tools they provide are the ones that promote the
empowerment of the users as producers of information besides its consumers (Cardoso,
2006:133). Furthermore, by using those tools, individuals are participating in the configuration of the network itself (Castells, 2004), influencing not only their own behavior online but
also the overall operation of the “new media” platforms on which they participate. This aspect
is often forgotten: although this kind of platforms for the communicative and informative action of individuals are economically operated by private and for-profit companies, they are
themselves a social construction even more than traditional mass media, precisely because
those platforms depend on the content and the participation of the users in order to operate.
To Manuel Castells there is a direct connection between the power of sharing and the
sharing of power (Castells, 2004). What this means is that the empowerment of the users is
not only individual but also collective and that the “new media” we’ve been discussing have
less power over the users, both individually and collectively, than the mass media that previously dominated the informative landscape. In this sense, Benkler considers that we are witnessing a massive redistribution of power and value (also of value, it should be stressed)
from the mass media to the individuals, on one side, and to the companies that provide the
tools for them to operate on the new informative and communicative environment on which
they live (Benkler, 2006:23), that is, the “new media”.
To sum up, the social function of the media has changed and it’s that fact that explains
the change in the overall media landscape. From a mass society on which mass media had
the center role in the distribution of information relevant to society, we shifted into a network
society, connected by computers, on which the platforms for the informative and communicative action of the individuals have the prominent role in the distribution of information relevant
to society.
In this new information and communication paradigm, the intermediaries – the “gatekeepers” and “newsmakers” of the age of the mass media (Wolf, 1999) – cease to have the
relevant social function they had before. On the contrary, it is the “new media” – like Google,
Facebook, Twitter or YouTube – that rise to a higher social relevance, because they are performing the social functions that the network society – its structure and its processes – requires of them.
2.4.
Data, information and knowledge
The changes that are occurring in the network society connected by computers have
effects of the data that is produced and manipulated, on the information that is transmitted
and on the knowledge that is accumulated by the individuals and by society as a whole.
Therefore, it’s important to detail these concepts and their interconnections in the context of
the network society. One of the regularities that we detect when going through the various
theoretical analysis that have been made to the concepts of data, information and knowledge
is that there is a diagnosis of frequent confusion and overlapping between “data” and “information” and between “information” and “knowledge” (Zins, 2007; Boisot e Canals, 2004). On
the other hand, although the concept of “data” is always considered to be objective, the concept of “information” is frequently understood as subjective, constructed entirely within the
cognitive capacity of an individual and “observable” only through his testimony. The concept
of “knowledge”, for its part, is always perceived as being subjective and therefore not directly
observable (Zins, 2007). In his study of this issue, Zins concludes that data is that which
makes information possible and information is that which forms knowledge (Zins, 2007;
Jones, 2010). From that sense of progression between the three concepts, Clampitt derives
the D-I-K-A model, referring to “Data-Information-Knowledge-Action” (Clampitt, 2010, 122). In
this model, data is what feeds information, information is what feeds knowledge and
knowledge is that which sustains the action of the individuals. This means that the communicative and informative process is made from objective data that, once interpreted (and interiorized) by a given individual, turns into information. In the possession of a coordinated and
structured set of diverse pieces of information, that individual is said to have a certain
knowledge of a subject. And, finally, it is with that knowledge that he decides which actions to
take in the social context. Van Dijk proposes a similar approach with his “pyramid of information processing” (van Dijk, 2006: 202-203): in the era of digital information and communication technologies, the information processing starts with the manipulation of bits and bytes
at the digitization level, goes through the manipulation of that data at the computer level, becomes information when it is made understandable by a human being and turns into
knowledge when it relates multiple pieces of information in a coherent set.
These new technologies we’re studying have an impact in all the stages of this process, but are more influential at the bottom than at the top of the pyramid. To put it differently, these digital technologies are especially effective in processing bits and bytes, manipulating data and producing and distributing information, more than in producing knowledge or
wisdom. But they are – in the digital context of a society that is flooded in data and information – the matter by which knowledge and wisdom are made.
Information is something inherent to all social relations. The substance of social relations is made through the exchange of information between individuals and between them
and society. This mechanism is important in order to understand that the way individuals use
this new digital information and communication technologies is influenced by their social uses and customs, but, on the other hand, are also influential to those uses and customs
(Fuchs, 2003).
Manuel Castells also considers social processes to be always based on knowledge
and information processing. Using classic sociology concepts, he argues that knowledge is
“a set of organized statements of facts or ideas” and information is the “data that has been
organized and communicated” (Castells, 2010: 17). In this correlation, as we can see, it’s
also implicit the idea of a progression of complexity and meaning that goes from data to information and from information to knowledge.
In the context of the network society and the migration to digital, the data that supports
the social distribution of information is increasingly the digital data stored in computers and
servers (Hilbert and López, 2011). The way that data is treated and manipulated by computers is one of the most profound changes we’re going through. Because it is that computational treatment that permits to register, tag, combine and recombine data in multiple ways,
including of course the metadata we mentioned before. On the other hand, it is the way that
data appears to individuals and is perceived by them that converts it into information. Therefore, information involves a subjective individual interpretation of data, but it’s also affected
by the attributes of the digital data, namely its abundance, convergence and flexibility. This
means that information is the link that establishes a connection between the data, which is
objective and neutral, from a social point of view, and knowledge, which is subjective and
non-neutral from a social point of view. Knowledge is non-neutral, of course, because it is
based on knowledge that individuals chose to act in a certain way within their social interactions, whatever those may be (Jones, 2010). Consequently, the social function of information
is precisely to establish that connection between the objectivity of data and the subjectivity of
knowledge, which manifests in social action. What follows is that the current changes in the
social distribution of information necessarily alter the way information fulfills that function. In
this paper we use the term “information” in a broad sense, integrating all forms of data that
can be interpreted by humans and serve as raw-material to produce knowledge. This means
that, for us, in this paper, the term “information” includes all forms of “news” as well as all
kinds of entertainment and information products and services. Whenever we refer to “information” throughout this paper, this is what we mean: all and every bit of interpreted data that
produces any form of knowledge.
“Communication”, on the other hand, is the sharing of meaning through the transmission of information (Castells, 2009:54). Meaning can only exist if there is a shared code between those who communicate. This means that any communication act implies a social
connection. The interactive nature of the digital information and communication technologies
stimulates bidirectional instead of unidirectional communications and dilutes the frontier between mass communication and all the other forms of communication (Cardoso, 2006). For
the purpose of this paper, we consider “communication” to be the transmission and sharing
of information, organized data that is understandable by the individuals. The data communication between computers, for instance, is also very relevant for the changes we are witnessing, but that kind of communication is outside the scope of this paper. Interpersonal communication, for its part, has likewise a central role in the context of the social distribution of information, but that is also out of our scope, which focuses on mediated communication.
2.5.
The value of information
The concept of “value” is very complex and may be approached via many different perspectives: philosophic, economic, sociologic and even psychologic. It is arguably one of the
most debated and analyzed concepts in the world of social sciences, precisely because it is
at the center of many of the mechanisms that regulate the functioning of society. From a
Marxist point of view, the value of something reflects the amount of work and capital that is
incorporated into its production. And it may manifest in two basic types of value attribution:
use-value and exchange-value (Fuchs, 2014:175). Use-value corresponds to the benefit that
someone may withdraw from the work or capital incorporated in a given good. The exchange-value corresponds to the price at which that given good may be object of a transaction in the marketplace (Repo, 1986:375). The first meaning of the concept depends on a
subjective assessment by someone; the second, on the contrary, is manifest and can be
quantitatively measured in the marketplace. The first problem is that these two very different
notions of value frequently appear overlapped and the second problem is that there is no
necessary and direct correspondence between the use-value and the exchange-value (Picard, 2010). One cannot be inferred from the other.
Robert Picard (2010:50) groups values connected to the production and distribution of
information in a matrix that comprises, on one axis, intrinsic values (truth, identity, belonging,
etc...) versus instrumental values (democratic participation, understanding, learning, etc.);
and, on another axis, social values (community, participation, social integration, etc.) versus
individual values (knowledge and understanding, decision making, etc…). This means that
the social function that is to be served by the production and distribution of information has
the purpose of helping the individual or community, on one side, and to do it following values
and goals that are either intrinsic, an end in themselves, or instrumental in the obtaining other benefits. The ensemble of these values corresponds, roughly, to our understanding of
what is the social value of information, which we will detail later. Individuals live together in
society through the communicative exchanges they enact and use the information they share
with one another to construct their social life, which of course cannot be dissociated from the
values mentioned above. This is why some types of information – like journalism, for instance – take up a certain social relevance and come with a set of institutionalized structures
or procedures, including some strict professional rules. That happens because it is understood by society that those activities – like journalism – produce and sustain certain values
(individual and/or collective and intrinsic or instrumental) that the community should preserve.
The problem with this kind of values is that they are either impossible or very difficult no
measure with any quantitative scale. Because they are “use-values”, they depend on the
subjective appreciation of a given individual and can solely be empirically measured through
an inquiry to that individual, which carries of course a heavy burden of subjectivity because
the values an individual cherishes may not be the same that other individual does (Picard,
2010:48).
In a capitalist society and in a market economy, the economic production and distribution of information is guided by profit and therefore tries to match the offer of information
products and services with the values individuals wish to fulfill with those information products and services, whether those values are intrinsic or instrumental, and personal or social.
That is how, in most western developed societies, organized in a market economy, the ensemble of the community chose to institutionalize the social distribution of information. On
one hand, there are other societies on which the social distribution of information is not ruled
by the market and, on the other hand, even in capitalist societies with a market economy,
there is frequently a “private” sector co-existing with other institutional forms for distributing
information, sometimes directly though government control, other times through other hybrid
(and complex) solutions.
In the instances that information is in some way object of transaction in the marketplace, is converts in an economic good and has a given exchange-value. That value, contrary to the use-value, can be measured and quantified. What this means is that, although exchange-value cannot be inferred from use-value, like we said before, it logically derives from
it. It is because a given information good has a certain use-value to someone (whether individual or social and intrinsic or instrumental) that it has a corresponding exchange-value,
even considering that such correspondence can’t be directly established and measured, basically because one is subjective and the other is objective. In this paper the purpose is not
to measure such a connection, but rather to analyze in what way the new digital information
and communication technologies and the network society affect both aspects autonomously.
How it affects the exchange-value of information, that is, its economic value; and how it affects the use-value of information, that is, its social value. In part 4 we will analyze the ways
in which those technologies affect the economic value of information as it is measured in the
marketplace. In part 5 we will look into the way information is used in the social domain and
try to perceive if those new technologies alter in some way the social value individuals get
from it.
The economic analysis of the distribution of information in the digital era is particularly
important in the current context because, like we suggested above, the social distribution of
information though mass media, with its functioning rules and its business models, is the way
that was collectively devised to make that distribution. The emergence of a network of computers and the spreading of digital technologies changes the way that distribution is made
and that, for its part, reflects on the economic value of information – measured in the marketplace – and on the social value of information, expressed through the use individuals make
of digital information in the social context. These are the two aspects of the current changes
that we aim to analyze in this paper.
2.6.
The economic value of information
What we broadly call “information” is something with specific characteristics that make
the approach to its economic value very problematic, to the point that some economists debate and discuss if information should at all be considered an economic good, subject to the
same economic laws as other products (Bates, 1990). According to Benjamim Bates information may indeed behave in the market like any other economic good because: a) it can be
transferred; b) it has some use to someone; and c) it may have a certain value (Bates, 1990).
Nevertheless, some characteristics that are specific to information have a decisive impact on
the analysis of its economic value. Bates mentions for instance the infinite reproducibility of
information, the fact that it only manifests its value through use and the crucial feature that
subject A is not deprived of the information he transmits to subject B (Bates, 1990). Fuchs,
for its part, points out that information: is not worn out by being consumed; can endlessly be
copied and shared; is easily transmitted; is a social good; has fixed costs that are far greater
than its marginal costs; and, finally, is frequently sold in the market with a profit (Fuchs,
2014). Picard indicates that the distinctive features of information as an economic good are
that it only exists - physically – in the perception of humans, it can easily be transported,
spread and shared, and its dissemination maximizes its use instead of diminishing it (Picard,
2010:45). For Shapiro e Varian, finally, the fundamental element we have to consider on this
issue is that information is very expensive to produce but extremely cheap to reproduce,
which means that it has high fixed costs but very low marginal costs (Shapiro & Varian,
1999:9). According to Bates the paradox we detect when we look at information with an economic eye is a result of the fact that its value is more attached to the way it is distributed than
to information itself (Bates, 1990). When coupled with the physical medium on which it travels, analog information behaves in the marketplace very much like any other economic good.
However, decoupled from that particular analog medium, information itself reveals specific
economic characteristics (above) that challenge its behavior as an economic good. And this
is increasingly manifest as we continue to migrate from a world of analog information to a
world of digital information.
To validate, from a theoretical point of view, the inclusion of information within the field
of economic goods, Benjamim Bates uses the concept of “stock value”. When it is shared, a
given information still holds some use value to its original holder, but, at that point, its “stock
value” is reduced, because each time an information is shared it is reduced the “capital” that
it can still hold to its “proprietor”, that is, the potential of such “value generating actions” that
the holder can still enact. Given that fact, Bates concludes that, from the point of view of the
economic theory, the “stock value” of information reduces with its dissemination (Bates,
1990). In practice and considering the context of the network society and the migration to
digital, this simply means that when information becomes abundant the respective economic
value is reduced. The traditional informative products, in analog format, coupled their value
with that of the physical medium on which they existed. Its marginal cost is the marginal cost
of the medium and, in that context, their economic behavior in the market was that of any
other product. But the dematerialization of information that results from migrating to digital
radically alters that equation. The new digital nature of information reduces the cost of producing and distributing it and pushes the marginal cost towards zero, thus depriving information of any economic value.
Yochai Benkler identifies two main characteristics of information that have consequences on its economic value. The first of those characteristics is that information is “nonrival”. The fact that someone transmits a given piece of information to another person does
not mean that the first person is deprived of that information. In a scheme, if A transmits an
information to B, B is then in possession of that information, but A is still also in possession
of the same information. What Benkler stresses in this regard is that, from an economic perspective, this means that the marginal cost of information tends to zero and therefore information will display a tendency to lose its economic value and became a public good
(Benkler, 2006:36). That is, due to the fact that its marginal cost tends to zero, information,
when deprived of analog attachment supports, cannot be profitable and therefore is of no
interest to those economic agents whose function is to produce profit. That’s why, in order to
remunerate creative work in general and information production in particular, our societies
“invented” copyright as an institutional solution to this problem. By the way, it is very interesting that this institutional solution is intimately connected to the analog distribution of information: the “copyright” is the right to make a copy of the analog medium that holds the information, whether it’s a book, a newspaper, a celluloid film or a videotape. Considering that the
digital format involves the dematerialization of information – like we said before – this means
that it becomes impossible to institutionalize the copyright in the same way that it was made
for analog information.
But Benkler considers information has yet another distinctive quality as an economic
good that further reinforces this thesis. To him, information is at the same time the input and
the output of the production process (Benkler, 2006:37). That is, he who produces information needs to use information in the process of its production. From that point of view, any
economic cost on the information that is used as input for the production process is a cost
that will reflect on its output, increasing the price and the revenue of the information producer. On the contrary, a lower cost of the information used as input in the production process
(such as that resulting from the current abundance and easiness to copy and reproduce) will
tend to reflect on a reduction of the price of the output, which is the same as say that it will
result in a reduction of the value of information. Again, this is a perspective that reinforces
the central thesis of this paper.
On the other hand, Benkler also considers that the new digital information and communication technologies help reducing the transaction costs in the social process. In our social
interaction is frequent that neighbors, family or friends help each other when they need, without any economic exchange. The problem is that there are numerous social contexts in
which that kind of interaction is not possible without involving transaction costs that are too
high. According to Benkler, what modern information and communication technologies permit
is, precisely, the reduction of those transaction costs in the social process – especially for
information goods – and resolve through (non-economic) social exchange that which previously had to be resolved through economic exchange (Benkler, 2014:297).
Still according to economic theory, Benjamim Bates underlines that the reduction of
uncertainty that information provides points to the potential economic appropriation of its value. But, on the contrary, the fact that the consumption of information by one individual does
not imply its deterioration for another individual suggests that information should be seen as
a public good (Bates, 1990). What is curious to underline, in this context, is that what new
information and communication technologies do is precisely increase the dissemination of
information and thus reinforcing its role as a public good. When we think about the changes
brought by new information and communication technologies we notice that the function and
social relevance of information is still the same; what is reduced – theoretically – is the respective economic value that can be captured and appropriated.
To Picard, the value of information revolves around two factors: scarcity and need.
When a certain good is scarce its economic value increases and when it’s abundant its price
tends to drop. On the other hand, the value of a given product or service is also the result of
an individual’s state of need towards that product or service. Water is a classic example: it
has more value for an individual when it is scarce or he is thirsty than when it is abundant or
he just drunk a cup (Picard, 210:46). Chris Anderson, for its part, wrote profusely about information abundance and scarcity, also concluding that the economic rules that apply to a
state of abundance are very different from those that operate on a state of scarcity (Anderson, 2006:143-146). Obviously, there are still elements of scarcity in the new digital paradigm, like the attention span or the time available to consume information. But what Anderson underlines is that information itself is not one of those scarce elements anymore, and
that radically changes the economic conditions for its production, distribution and consumption. To Manuel Castells, the definition of what has value in the network society is an exercise of power, like in all forms of society throughout history: it has value that which those who
hold power in society decide it has. But, in the context of multiple juxtaposed and distributed
networks that Castells outlines, that power is also distributed and can be selectively exercised in one network or the other. Therefore, both elements point to a redistribution of the
power to establish what has value in the network society (Castells, 2009:27-29). Castells
warns us that any attempt to reduce value to a single indicator will face huge practical and
methodological difficulties (Castells, 2009:28). However, he also considers that the overall
indicator of value transfer between different networks is money, which is of course the standard metric for the exchange-value we mentioned previously (Castells, 2009:52).
In sum, this literature review about the economic value of information permits us to
conclude that the changes occurring in the network society significantly alter the economic
value of information and therefore have huge consequences on the way the respective social
production and distribution is made. According do Shapiro and Varian, in a world on which
the problem is less the access to information than the excess of it, the real value produced
by an information supplier resides in its ability to locate, filter and provide the information
someone needs or seeks. That’s why search engines, for instance, are amongst the most
visited sites in the world wide web (Shapiro & Varian, 1999:13), as we’ll see further ahead
when we look at the data sets.
On the other hand, the investigation by Von Hippel on the factors of innovation also concludes that, for information products and services, just like in the other sectors, innovation
tends to sprout more from the users – individually or socially organized – than from the companies that traditionally produce and distribute those products and services. And that suggests a revision of the business models associated with that production and distribution (Hippel, 2005). A broad vision about the new business models created by the digital paradigm
reveals multiple possibilities (Cardoso, Mendonça & Neves, 2013; Gambaro, 2013). But the
fact is that most of them are created and developed by new companies and not by the traditional media companies. That is the result of their shorter capacity for innovation and adaptation. Taken together, the changes in the way we communicate in society reinforce the role of
both the end users and the companies that supply them the tools to communicate, which are
those companies that were able to innovate accordingly. And that necessarily implies a corresponding displacement of the ability to capture the economic value of information, which
now is made by different agents and in different economic and communicative contexts.
To Manuel Castells, although the tools for user-generated content that these companies provide may seem free at first, they really are not (Castells, 2009:97). For two reasons:
the first is that its use qualifies and converts its users into better advertising targets. When
people use the communication and information tools provided by the “new media” of the network society, they generate a set of metadata about that use that increases their own value
as advertising targets. That use turns into an accrued economic value that can be harvested
by the companies that provide those tools. According to Dan Schiller, the audience qualification that results from the use of these tools corresponds to a shift from “mass marketing” to
“class marketing” (Schiller, 1999:135). The second reason why the use of these new tools is
not really free is because, as mentioned above, these companies extract their economic value from distributing the content produced by others and not from the respective production
itself. This means that the value of a user-generated content platform is as high as the abundance of the content it holds, administers and distributes. By using those participation platforms, users are contributing with content to its enrichment, thus increasing its value and
therefore thus “paying” for its use.
The similarity between what these new companies – which are digital natives - do in
the process of social distribution of information and what traditional mass media used to do is
that both capture a part of the economic value of information. The first and foremost difference is that the “new media” do not directly produce the information they distribute and the
second difference is that they tend to operate on a global scale. The fact that these companies we call the “new media” of the network society depend on a global scale to operate in a
profitable way (as we’ll see later on) is precisely what explains the “winner-takes-all” phenomenon that tends to emerge, with one predominant search engine (Google), one main
video platform (YouTube), one major social network (Facebook), one leading microblogging
service (Twitter), and so on (Brynjolfsson, Hu & Smith, 2010). On the other hand, for the user, the attractiveness of those services is as high as the number of its users – the known
Metfalfe Law (Castells, 2009:42) – and, also, the more users such a network has, the better it
can use the data and metadata generated by the users to monetize their participation.
Charles Brown, finally, stresses the weight content aggregation had in the business
model of the traditional media, operating on analog informative products, and considers that
aggregation is the central element of their economic basis. In the new digital paradigm – he
argues – the aggregation function did not change; what changed were the technical conditions within which aggregation is made. And if, as he suggests, the capture of value is the
result of content aggregation, then the companies that are better positioned to do that capture in the new media landscape are the ones that provide the technical tools do operate on
the digital paradigm (Brown, 2013).
To sum up, the transition to the network society and the migration to digital information
and communication technologies transformed not only the economic value of information, but
also the way in which it can be economically captured. Further ahead in this paper we will
present aggregated empirical data and a case-study to try to understand how both things
happen in practice. In what follows, we will look in more detail to the way these changes may
be affecting the social value of information.
2.7.
The social value of information
After reviewing how the new digital information and communication technologies influence or may influence the economic value of information, we must now look in detail to the
social value of information to try to figure out if it too is or may be affected by the network
society and the migration to digital.
Social relations develop through communication. It’s through the way they communicate with each other that individuals interact on a social context. So, any deep change in the
communication technologies that are used in a society imply a corresponding change in the
kind of social relationships that individuals establish with and through those technologies
(Benkler, 2006:369). However this is not deterministic. The kind of communication technologies we use in our social interactions impose certain latitude of technical possibilities, but,
within that latitude, the way they end up being used depends on the individual’s choice, on
their social organization, on the economic options available and on the historical context. Be
as it may, massive changes in the information and communication technologies inevitably
generate corresponding changes on the way they are used in the social context.
To analyze the social dissemination of information in the perspective of its social value,
we have to resort to the concept of “social capital”. Bordieu defined social capital as “the
aggregate of the actual or potential resources which are linked to possession of a
durable network of more or less institutionalized relationships of mutual acquaintance
and recognition — or in other words, to membership in a group — which provides each
of its members with the backing of the collectively-owned capital, a “credential” which
entitles them to credit, in the various senses of the word” (Bordieu, 2008:21). To Bordieu
the understanding of society is not possible without resorting to other notions of capital besides economic capital, like social capital or cultural capital. Social capital corresponds to
those resources that individuals obtain as a result of their social interactions with others.
Economic capital can be converted into social capital, for example if someone dispends time
and effort in the construction of a network of relationships. But it can also be converted the
other way round, for example when someone draws economic benefits that would not have
been otherwise possible with the investment made in his or her network (Bordieu, 2008:25).
Coleman, for its part, considers that social capital expresses in three different ways: in
obligations and expectations, that are the basis for the establishment of trust relationships
between individuals; in the acquisition of information through the social relations established
in a social network, which is the base for social action; and through the norms and social
sanctions (Coleman, 1988:102-104). To Coleman, social networks tend to generate more
social capital when they are subject to enclosure, because that reinforces the intensity of the
bonds between its members. Elinor Ostrom , for its part, also refers to this cohesion function
of social capital and stresses that, unlike physical capital, social capital is not worn out with
use, but rather with non-use, because the value of the network tends to deteriorate if it is not
used regularly (in a way, the network only exists as such when it is used). So, social capital
tends to increase in direct proportion to the use of the network, provided that use results from
the establishment of trust relationships between the individuals (Ostrom, 2000:180). This
means that both authors – Coleman and Ostrom – underline the density of the relationships
as an important element for generating social capital, which in principle runs contrary to the
lower density of the online social networks introduced by digital technologies. The answer to
that is provided by Granovetter, whose studies concluded for the coexistence of a very dense
network of near and frequent relationships and other not so dense network of more distant
and less frequent relationships. According to Granovetter each of these types of network
provides a different kind of social capital: the strong bonds network produces an aggregating
kind of social capital that is important for group cohesion, whereas the weak bonds network
provides a connecting kind of social capital that is decisive to broaden the reach of the ability
to generate social capital (Granovetter, 1983:203). Besides, weak links have an additional
function – with high potential to generate value – which is that of establishing bridges between different and highly dense network clusters. Both things - the less dense but more
extensive network and the connecting between different networks or network clusters – are
concordant with what may be observed in the way modern online social networks operate, as
we will see further ahead. Robert Putnam, for its part, considers that, given the way it forms,
social capital can either be considered a private or a public good, because its emergence in
the social context can benefit both the individual or the network as a whole (Putnam, 1995).
Contrary to Putnam, Barry Wellman does not consider that the social relations are deteriorating and puts forward the concept of “networked individualism” to explain that online social
networks cannot be seen as a substitute to interpersonal social relations, but its complement.
Online social relations act as a supplement to interpersonal social relations, without increasing or decreasing them (Wellman, Haase, Witte & Hampton, 2001:436).
For Benkler, the growing importance of non-market forms for the production of information, knowledge and culture, mostly exercised through online social networks, gives rise to
three questions that have to be answered. The first is why individuals take part in that production. The second is why they do it here and now, in the context of the changes we’ve
been describing. And the third is whether that is efficient, from a social and economic point of
view (Benkler, 2006:91). The answer to the third question, we already know, Benkler considers affirmative and attributes it to a change in the social mode of production of information.
What is left to know is why people engage in online social networks and why they do it now.
The second reason is of course because now they can. The technology that allows it is new
and so, the emergence of online social networks gave people communication tools and social interconnection possibilities that simply did not exist before. The first reason – the more
important one – is that people engage in online social networking because they obtain some
kind of benefit from it. Van Dijk, like many other sociologists, underlined the fact that people’s
participation in online social networks results in an exploitation of their work and their data.
When they participate in online social networks, people act as content and data suppliers,
not receiving any kind of material compensation for it and not controlling the conditions upon
which their work and their data is made available for economic exploitation by for-profit companies (Van Dijk, 2009:47). But other studies have also proved that users of online social
networks get several benefits from that participation. Studying the contribution of a group of
users to a network of photo sharing, for instance, Petersen concluded that most people
would participate expecting to establish a social connection with others as a result of that
participation. The conclusion is that we are before a set of technologies that have a relational
nature and that relational aspect pervades its use. Therefore, Petersen concludes, we cannot
analyze the participation of individuals in online social networks solely through the Marxist
perspective of the exploitation of the work-value of participation and the market value of its
data. We have to look at that participation within the frame of the changes that open up new
communication possibilities to support new kinds of social connections (Petersen, 2008, 2).
Manuel Castels, for its part, considers that the modern communication platforms on
which individuals interact are a construction of the individuals themselves (Castells,
2014:139). The technical structure and the economic exploitation are operated by companies
in search of profit, but the decisive element in its mode of operation – and its business model
- are the individuals that participate. On one hand, the huge adherence that those sociability
spaces register is what attracts all institutions that interact with people – namely companies –
to be present rather than absent. And, on the other hand, although the greater number of
users in a network makes it more difficult to leave it, the easiness with which it is possible to
set up alternative networks reinforces the power of the individuals relative to the very companies that provide them the tools to do so (Castells, 2014:140). This means that the power
transfer the new digital information and communication technologies enact has consequences also in this aspect.
Gustavo Cardoso, finally, considers that the new mediation technologies we are using
to interact with one another are changing our “lifeworld” and, in that process, replacing the
“reference groups” of the past with mediated “belonging groups” in which we emulate the
kind of functioning and relationships we have in face-to-face groups (Cardoso, 2012:203).
Differently said, we are witnessing new ways of establishing social relationships on which the
mediating technologies act as a conditioner element.
In short, if the amount of available social ties is in itself an element that increases the
potential for social capital that can be mobilized by each individual, like Resnick suggests,
(2000:10-12), then the exponential proliferation of open channels that is permitted by modern
digital technologies is, in and by itself, a multiplying factor for the available social capital, both
for individuals and for the community as a whole. This is to say that the dissemination of information that these technologies permit is an element that increases the social value of the
information itself. We can say, with Lin (1999), that the proliferation of networked connections
that new technologies allow is a decisive element to reinforce the social capital of the individuals, the groups and their networks.
3. HYPOTESES AND METHODOLOGY
From the literature review made above results very clear that the emergence of the
network society and the migration to digital technologies has implications in several aspects
of our social life. One of those aspects – one of the most striking – is the way the social distribution of information is now done. From a mass society mostly aggregated around the social function of the mass media, we’ve shifted to a networked society in which new actors
play new roles in the social production, distribution and consumption of information.
On the other hand, something that is well known by anyone who works in or studies the
traditional media’s transition to digital, the main problem results from the deterioration of the
business models that are associated with that social function. For traditional media, it has
been difficult to find a way to connect their economic viability to the new conditions under
which information is produced and distributed in the network society. This happens, basically,
because they cannot seem to capture the same kind of revenue from their digital audiences
that they once captured from their analog audiences. From this naturally results the starting
question presiding this investigation: How does the network society and the migration to digital affect the economic and social value of information? And, if it does, can the way it does
explain (or help to explain) the difficulties experienced by the traditional media in finding sustainable business models in the digital age?
For us, from an exploratory analysis of this issue, results one main hypothesis leading
to to three operational hypotheses:
MAIN HYPOTHESIS
Network society decreases the economic value of
information and increases its social value
Operational Hypothesis A1
The economic value of the information distributed by the
mass media decreased in transition to the network society
The economic value of the information distributed by the new
media of the network society in less than the economic value
of the information that was distributed by the mass media
Within the context of its social use, the abundance of information increases the social value of information itself
Operational hypothesis A2
Operational Hypothesis B1
The hypothesis we lay is that de real explanation to why traditional media seem impotent to adequate their economic sustainability to the new digital environment is not the result
of their own failure but rather the outcome of a change in the way their social function is performed, which necessarily involves a general decrease in the economic value of information.
The first logical conclusion – if such a hypothesis is proven – is that the business models of
traditional mass media are exhausted and cannot be recovered within the frame of the network society. The second logical conclusion is that, therefore, their social function is at risk.
And, third, that we need to look at the new conditions within which that social function is performed to start searching for a new institutional arrangement for it.
To study these hypotheses we will use secondary data from various sources, with the
purpose of relating that data with the concepts we sketched in the literature review, to produce insight from the establishment of connections between that data and those concepts.
For operational hypotheses A1 and A2, concerning the economic value of information, we
will analyze in bulk the audiences and revenues of traditional media in the United States and
compare them with the audiences and revenues of the new media in the network society.
Then we will also look into some equivalent data for Portugal and, thirdly, we will detail de
case-study of Autohoje, a specialized information brand, comparing the evolution of its audiences and revenues in the analog and the digital sides. Here we will use analytic tools and
concepts such as the CPM (Cost per mille) and ARPU (Average Revenue per User).
To study the operational hypothesis B1, regarding the social value of information, we
will use several empirical studies already available that were conducted on samples of users
of online social networks, namely Facebook, and we will try to confirm the hypothesis with
the conclusions drawn from those studies.
In the conclusion of this paper we will correlate the theoretical and empirical approaches so as to validate the hypotheses and formulate paths for future investigation.
4. THE ECONOMIC VALUE OF INFORMATION – DATA ANALYSIS
In this part of the paper, the purpose is to gather secondary data that will allow us to
respond to the stated hypotheses. We believe this data is capable of demonstrating: a) that
the media audiences have shifted from analog to digital channels; b) that the corresponding
revenue, either direct or indirect (via advertising), tends to follow that shift; c) that the losses
registered in the analog channels are not balanced by gains in the digital channels, which
originates the fundamental problem of the business model; and d) that the revenue transfer
towards digital channels has mostly been captured by a kind of companies that operate like
content intermediaries and distributors rather that its producers and that we here call the
“new media” of the network society. None of these aspects is new and all of them are thoroughly studied and analyzed.
The hypotheses we put in this paper go a little further and aim to provide a broad explanation for why that happens. At first sight, it may seem that the “new media” of the network society capture a greater share of value in the digital channels because they are better
adapted to its operating mode. That is certainly true, but only in part. The hypotheses we put
is that the changes in the digital environment leads to a general decrease in the value of information itself and only the “new media”, because of their global scale, can find economic
balance in that new environment. It should be reminded that, after all, what we call “value” is
a subjective concept and can only be measured via some external indicator. That external
indicator is the value (or price) at which the information is exchanged in the marketplace, that
is, its market value. That’s why we’ll use indicators like the CPM (Cost per Mille) and the
ARPU (Average Revenue per User) to deal that issue on a quantitative approach.
First we analyze the global situation the media find themselves at, using various data
and information sources, in order to provide a broad view of the practical consequences of
the changes going on. Then, we will study the specific case of Autohoje to analyze in greater
detail the practical operation of the indicators we propose to study.
4.1.
Overall situation of the media
The overall situation of the media, in most developed countries around the world, is
similar to the one that can be diagnosed for the United States of America. Therefore, we will
use that national USA data as an example, which will allow us to take advantage of the ample availability of data, both synchronic and diachronic. But we believe the overall situation of
the media is not very different in most developed countries around the world.
In terms of global media audiences’ evolution, the trend is that of a transfer of viewers
and readers from the traditional media
in analog formats for the new media in
Chart 4.1 – Sources of News (USA, 1991-2012)
digital format, either through websites,
applications or other digital channels.
Chart 4.1 illustrates this trend, representing the yearly change of people that
assert using television, radio, newspapers or online channels as their source
of news. Newspapers and radio show a
clear downward trend is this very long
series, contrary to digital channels, that
exhibit an upward inclination. The aggregate data confirms this descendant
(Source: Pew Research Center/Newspaper Association of America)
trend in newspaper readership every
year since 2003 (Pew, 2014). The most recent data confirms this trend, as we can see in
chart 4.2. The digital segment of the media is the only that grows and newspapers find themselves clearly in loss of popularity. The partial conclusion we can draw – which is not new - is
that there is an audience shift from the most traditional channels – press, radio, television –
to the new digital channels.
The analysis of the ad revenue
Chart 4.2 – Audience anual change
of the media, for its part, confirms the
(USA, 2011-2012)
common notion that money tends to
follow audiences. As we can see in
chart 4.3, the ad revenue of the northamerican newspapers – its most important revenue source, in about 70
percent – has grown since 1950 until
2001 and started falling drastically
since then. In that same chart we can
already see, also, that the emergence
of new revenue source – the digital –
although expanding in recent years, is
(Source: Pew Research Center)
not enough to offset the revenue losses felt in the print business. Chart 4.4
Chart 4.3 – Ad revenue in Newspapers,
shows this is even greater detail: to
1950-2013, USA
counterweight the huge drop in revenue coming from traditional media
products, there is an increase in the
digital revenues. However, that occurs
in a proportion that is insufficient to
compensate the losses of the first
item. This analysis is repeatedly made
in every report, sometimes by the industry representatives themselves
(Wan-ifra.org, 2014). If we look at the
evolution of the total amount of money
(Source: Newspaper Association of America)
invested in internet advertising, in
chart 4.5, we see that this item has
been increasing in the period and in
Chart 4.4 – Ad revenue in the USA, 2003-2013
2013 it supplanted for the first time the
amount that was invested in non-cable
television. But, what we have to ask
then is this: where has that money
gone to? The answer is partially in
chart 4.6. It went to other suppliers of
digital audiences, namely Google, that
since 2012 gathers more ad revenue
than all the American magazines and
newspapers combined.
Yet, if we look at the average
(Source: NAA)
price of the digital ads that are served
in the Google network per comparison
with that of the ads that are displayed
in the channels of the traditional media, we’ll see that it is significantly lower. The indicator which measures that
“value” is the cost per one thousand
impressions, CPM (Cost per Mille,
from the Latin original), and it represents the price paid by an advertiser to
reach a thousand impressions with its
advertising. There are other indicators
to put a price in the access to media
audiences, like the CPC (Cost per
Click) and the CPL (Cost per Lead) or
the CPA (Cost per Acquisition), but
CPM is the most used and the most
appropriate to put all channels in a
comparative level. Considering that
CPM always refers to a thousand impressions, its “value” represents the
“value” of the audience for the advertiser. Of course, the “cost” of those
impressions for the advertiser is – as
opposed – the revenue gather by the
media outlet that operates those audiences. From this “side” the same indicator is often referred to as RPM
(Revenue per Mille)
As we can see in table 4.1 (with
data from April 2010, the best we got),
the average CPM in news websites
(“General News”, “Sports” e “Newspapers”) – between 6,14 and 6,99 dollars
(4,54 to 5,16 euros) – was considerably higher than the CPM for other kind
of sites and the market average (2,52
dollars (1,86 euros) for 1000 impressions. In this table, Google advertising
is either not included (search is not
considered) or dispersed into other
services (e-mail, social networking, for
example). But, still, it is interesting to
note that e-mail sites (including Gmail)
and social networking sites (including
Facebook) are those that register the
lower CPM of the lot. This, as we’ll
see, will repeat when we analyze the
case of Autohoje. By then, we’ll be
able to directly compare the CPM for
Chart 4.5 – Share of ad spending
(USA, 2005-2013)
(fonte: IAB/PwC)
Chart 4.6 – Share of ad spending
(2004-2013 – 1st semester)
(fonte: Business Insider)
Table 4.1 – Average CPM, per type (April 2010)
(source: ComScore, in dollars)
analog channels with that of digital channels.
Another way to analyze the same issue is to look at the direct revenue that media outlets extract from their digital operations and compare it with the analog side of their business.
Of course, one can say that the current difficulty in establishing efficient monetization strategies in the digital platforms is a conditioning element. But that difficulty – precisely – is part of
the changes currently affecting the media landscape. For analysis purposes, we assume that
the media outlets will charge for content as much as they can, considering the motivation (or
lack thereof) of their audiences to pay for content. The fact that all the indicators point to a
growing difficulty in charging for that content is in itself the result of the changes described
earlier and not its cause.
To compare these realities – the analog and the digital – we have to find an indicator
that can be common to both. That indicator is the Average Revenue per User (ARPU). Basically, what this indicator does is cross the partial or total revenue of a given entity with the
number of users that use the information products or services originating from that entity on a
certain time lapse, most of the times per month (Doctor, 2011). Therefore, ARPU corresponds to the revenue generated by each user individually, in average, and, again, it is a
market indicator of the value of the information produced and distributed by a certain media,
from the point of view of its users.
The paradox that stands out when we look at the audiences of the traditional media
outlets is that most of the times these have much larger audiences in their digital channels
than in their analog channels. Yet, these remain the main source of their revenues. Fredéric
Filloux, referring to data from 2013, points out that The New York Times, for instance, gathers most of its audience via its website (29 million unique users per month against 5 million
readers of the paper edition) and its broad social media presence, but still gets the lion share
of its income – about 78% - from the print business (Filloux, 2014). In a slightly more dated
calculation, Henry Blogdet, from Business Insider, accounted that a paper issue reader of
The New York Times – counting subscribers and single issue buyers – represented average
annual revenue per user (ARPU) of 879 dollars. During the same period, a visitor to the
website – counting its ad revenues (there was no paywall at the time) – was “worth” 3,85
dollars (Blodget, 2011). That is 228 times less! This is a phenomenon that would be observable in many other information brands and that we will see again when we look at the case of
Autohoje, further ahead. Although more data is required to strengthen this conclusion, what
this phenomenon suggests it that there is a huge gap between the income that can be generated from each information user in an analog environment and in a digital ecosystem. If we
consider a continuation of the audience migration from the analog channels to the digital
ones (which is highly probable) and considering the characteristics of the new information
and communication paradigm (outlined above), the logical conclusion is that the dominant
business model that mass media operated in the analog environment will not be sustainable
in the digital paradigm. This means, of course, the confirmation of the hypothesis A1 formulated above.
Table 4.2 – ARPU calculation for the “new media”
On the other hand, the average
(2013)
revenue per user displayed by the
companies we call “new media” is
even lower. Forbes, for instance, published the table 4.2, regarding the average revenue per user (ARPU) for
four technology companies that fit our
(source: Forbes)
description of “new media”: Google,
Facebook, Linkedin and Yahoo (Louis, 2013). As we can see, only Google has an ARPU
above two dollars. Facebook, for example, generated at the time 1,63 dollars per year, for
each of its 1,110 million users. If it did not have 1,110 million users worldwide, Facebook
could not operate on the basis that it does. If it had, for instance, the same 48 million unique
users The New York Times has per month, it would generate an income of mere 78 million
dollars (instead of the 1813 million it generated in 2013) and it probably could not maintain
the professional and technical structure it exhibits nor could it be evaluated the way it is.
Reaching for the second hypothesis we proposed, we would say that the overall decreasing
economic value of information also affects the “new media” and that their operation is sustainable only at the scale at which they operate.
The situation in Portugal is not very different, but the available data is scarcer and not
so adequate for comparisons (Económico, 2014). In the same way that is noticed in other
countries, most Portuguese media have far larger audiences online than offline. The sports
daily newspaper Record, for instance, has an average audience of 46 thousand readers for
its print edition, but has a monthly average of 23 million visitors to its website. The daily
newspaper Público has a print readership of 28 thousand people, in average, but has monthly web traffic of 12 million visits (Netscope.marktest.pt, 2014; Apct.pt, 2014). Although the
metrics in this case are not the same (readers and visits, respectively) this comparison suggests that, same as in other places, the Portuguese audiences of information products and
services are migrating from analog to digital formats. The Obercom report on the internet in
Portugal, for example, indicates that 15,3% of the people inquired would find it difficult to live
without internet, but only 1,5% find it likewise difficult to quit reading newspapers and magazines (Obercom, 2014a). In another study produced by the same institution, performed on
executives and professionals in the communication sector in Portugal, 75,5% of those inquired considered that ad spending in internet would continue to grow in the future, while
72,7% considered that corresponding ad spending in the press would decrease (Obercom,
2014b). What this means is that national Portuguese media are roughly confronted with the
same challenges that other media in other countries.
4.2.
Case-study “Autohoje”
The case-study of the information brand Autohoje, available in several formats and distributed through various channels will permit us to observe, in practice, how the reduction in
the economic value of information actually operates. Autohoje started in 1989, edited by
Motorpress Lisbon, a publishing house affiliated with a major European media conglomerate,
as a weekly newspaper specialized in information about cars and the automotive industry,
with some minor content of motorsports. In 2005, Autohoje began publishing in magazine
format, but kept its weekly periodicity and gained a brand new website: www.autohoje.com,
with free access and information other that the one published in the magazine (mostly short
product news, about launches and new cars). The digital news produced by Autohoje is
available also in various mobile formats, free as in the website. About a year and a half ago,
Autohoje also began to sell its weekly issue in specific app for iPad and iPhone. Presently,
the information brand Autohoje also has a significant presence in social networks – Facebook and Twitter – explores a forum associated with its website and broadcasts a small
webTV from www.autohoje.com. Overall, the digital presence of Autohoje is not very different
from most media operators in Portugal and elsewhere and its audience numbers are arguably the best in the automotive news sector in Portugal.
As we can see in chart 4.7, sales
have been decreasing since 2010, in
line with the overall behavior of print
sales in Portugal during the same period. On the other hand, as we can see
in chart 4.8, the total audience of the
website www.autohoje.com has been
stable or even slightly increasing in the
same period.
On the revenue front, as we can
see in chart 4.9, Autohoje earnings
coming from the print division have
been decreasing since 2010, both for
sales and advertising. The revenue
generated
by
the
website
www.autohoje.com, for its part, almost
all coming from advertising (content
monetization is insignificant) kept stable but never managed to offset the
revenue drop – of sales and advertising – that was registered in the print
Chart 4.7 – Magazine sales 2010-2013
(source: APCT)
Chart 4.8 – Visits to website Autohoje 2010-2013
(source: Netscope/Marktest)
edition. The chart 4.9 is made with all
Chart 4.9 – Autohoje revenue 2010-2013
the revenue sources on a 100 index in
order to allow comparison between the
relative weights in the total revenue.
If we compare the sales numbers
of the weekly print edition with the traffic
numbers
of
the
website
www.autohoje.com (charts 4.7 and 4.8,
respectively) we will notice that they
are much bigger online than in the print
issue. Whilst the magazine registered
in 2013 a weekly average circulation of
(source: Motorpress Lisboa)
around 10.330 copies (from official
sales data from APCT), the website www.autohoje.com registered, in the same period, an
average 786.000 unique visitors per month (also official data from Netscope/Marktest). Yet,
as we can see in chart 4.9, the digital revenue stream never amounted to more than a very
small part of the total revenue. One can say that digital revenue didn’t grow as strongly as
expected. But even if it grew more than it did, it would barely compensate for the losses in
the traditional revenue streams. Plus, as confirmed by its executives, the strong (price) competition of companies like Google, YouTube or Facebook is precisely the reason why Autohoje’s ad revenue doesn’t grow faster. This means the correlation between the revenue
and audience data for Autohoje confirms the conclusion that, also in this case, it has not
been possible to generate the same amount of revenue for a digital user that the one that is
gathered form a user of the print edition. Even considering Autohoje operates several digital
products and services and only one analog product.
Like we said earlier, one way to analyze and explain this difference departs from the
prices that are charged for the ads inserted in the analog or digital information products. In
average, a single page ad in the weekly magazine Autohoje costs something like 1500€ (and
this is a price that, in average, has been dropping lately). Which means that an advertiser
who wishes to reach the audience of a print issue of Autohoje – circa 10.330 readers – will
be paying about 0,15€ per potential contact (considering an average total circulation of
10.330 copies). In the website www.autohoje.com, on the contrary, a banner in the homepage represents an average CPM (cost per a thousand impressions) of 10€. Which means,
therefore, that an advertiser that choses to reach its audience via the website will be paying
0,01€ for each contact, 15 times less than he would pay on the print edition. Of course, in
both cases all these prices can vary significantly with a wide array of factors. In the print issue that price is dependent on the number of readers each copy has, the space occupied by
the ad and the place where it is inserted (in the beginning or final pages, full page or half
page). In the website also the format and place occupied by the ad (homepage or “run-ofsite”, type and banner size, etc…) greatly influences its price. But, again, in both cases these
are market values, which means that they are not administratively set or commanded. They
are set by the open competition between different market operators and, as expected, they
tend to be set at average market values. What remains obvious is the difference – that in this
case we can estimate as 15 to 1 – between what are worth (their “value”) the ads in the print
edition and the ads in the digital format.
The other way to analyze this isTable 4.3 – Average Revenue Per User (2013)
sue is through the lens of the revenue
obtained from each user of the print
edition per comparison with the digital
channels. Table 4.3 makes that exercise. In 2013, Autohoje, the weekly
magazine, had an average readership
(source: Motorpress Lisboa)
of 10.300 readers per issue and gathered a total income of 1,215 million
euros, considering advertising revenues and sales and subscriptions revenues, which
amounts to an average revenue per user (ARPU) of 118 euros/year. The digital channels
operated by Autohoje, however, garnered audiences of 780.000 unique users per month, in
average, and generated total revenue of 175.000 euros, which amounts to an average revenue per user of just 22 cents/year. Even if we were to consider four weekly editions per
month to put the print issue audience (41.320 accumulated readers per month) aligned with
the monthly audience of the website, its revenue per user would be 29,41 euros, still much
more than the 0,22 cents per user of the Autohoje website. However, this would not be entirely correct because, when counting four weekly issues per month, we’d be considering
unique users per month in the website and duplicated readers in the print edition.
Either way, what this means is that – just like in any other traditional media company –
the amount of revenue that Autohoje manages to extract from its print edition is far greater
that the corresponding amount of money that in can generate from its digital ventures, mostly
focused on its website. Ultimately this means that the professional structure that supports the
information brand Autohoje will not be sustainable if the ongoing audience transfer for digital
channels proceeds and if no alternative business model is devised. To put it another way,
this means that the case-study of Autohoje confirms – in our view – the hypothesis A1 formulated above.
5. THE SOCIAL VALUE OF INFORMATION – EMPIRICAL STUDIES
As exposed in the previous sections, the innovative characteristics of the digital information and communication technologies and the way society organizes in a network of computers connected to one another is something that has huge consequences on the way we
value information in society and therefore also in the way we produce and distribute it. That
is the economic effect of the changes in progress. What remains to determine is which are
the social effects of those changes. The hypothesis we put, it should be reminded, is that the
proliferation of social connections made possible by the profusion of digital communication
channels and the corresponding abundance of information throughout society are two elements that reinforce the social capital of the individuals, of the groups and of the community
as a whole. And that, as a consequence, the network society increases the social value of
information by way of its abundance.
In this section, we will analyze the results of three empirical studies, conducted on
populations with different characteristics, made precisely with the purpose of inquiring if and
how individual’s use of online social networks increases or supplements their social capital.
We chose to analyze studies on online social networks firstly because they are abundant and
secondly because online social networks are a by-product of the new digital information and
communication technologies.
The first of these studies was conducted by Elison, Steinfeld and Lampe in 2007, with a
sample of 287 students from Michigan University who were Facebook users (Ellison, Steinfield & Lampe, 2007). The researchers used several instruments to gather data about the
intensity with which people used Facebook, what kind of satisfaction they drew from that use
and what types of social capital they used (or rendered usable) with that participation. In this
regard, the authors took into account three types of social capital, in line with previous theory
produced on this issue: bridging social capital, a kind of social capital that results from the
establishment of bridges between different network clusters; bonding social capital, a kind of
social capital that results from the strengthening of the bonds between the members of a
network; and maintained social capital, a kind of social capital that results from the preservation of social bonds that otherwise might be rendered inactive by people’s lasting geographic
displacements. As a result, the researchers concluded that the use of Facebook permits individuals to draw advantages from different kinds of bonds as a way to increase the amount of
resources that are available to them, but that online networks are particularly effective to establish bridges between different networks or network clusters, that is, the first of the aforementioned types of social capital. The researchers also concluded that the use of the internet
was not in itself an element sufficient to permit the accumulation of social capital, but the
participation in online social networks was. This means that, according to the data that was
gathered in this study, there’s an accumulation of social capital that is the result of the establishment and maintenance of social connections, in result of the use of digital information and
communication technologies, that otherwise would be lost or would not be activated. This
reaches to the main conclusion that it is precisely the ability to keep open those channels
and those connections that fosters the increasing of the social capital at the disposal of the
connected individuals. A final word to echo yet another interesting conclusion from this study.
Although that is not the main finding we’re interested here, this study also concludes that the
use of Facebook is seen by those who use it as intrinsically gratifying. And that was most
evident in individuals with lower self-esteem and a lower degree of satisfaction with their own
lives. This means the study at hand also answers, at least partially, to the question as to why
individuals engage in online social networks and points to intrinsic motives as well as instrumental ones.
Another empirical study, conducted in 2012 by Bakshy, Rosenn, Marlow and Adamic,
also has relevant and interesting conclusions for the purpose of this paper (Bakshy, Rosenn,
Marlow & Adamic, 2012). Departing from a quantitative analysis of the sharing information
behavior of an extensive population of 256 million individuals that participate in the network,
the researchers concluded that the predisposition to share information was greater if and
when that information was validated by friends or connections of the observed individuals.
The study therefore concludes that what’s in operation here is a kind of social sanction towards the value and validity of a certain piece of information. That social sanction, in consequence, must be seen as increasing the value of some pieces of information in relation to
others. In some cases that is the result of connections that are derived from offline social
interactions of the individuals, but in other cases that “capital of trust” is constructed exclusively online and based on online social interactions. This, for its part, permits us to conclude
that this kind of mediated relationships end up producing a kind of social capital that would
not exist otherwise. And that, consequently, is an increment for the social capital of the individuals and the community as sole result of the use of these digital technologies.
But, even though concluding that the strongest links are the most influential on the process of validation of the information, this study also settles that it’s the numerous weak links
pointed out by Granovetter that are responsible for the massive dissemination of information
that Facebook can provide. This is particularly keen for those information pieces that are
considered to be unknown by the network, suggesting a voluntarism attitude that compels
individuals to seize the opportunities posed by the network and its tools to share precisely
those pieces of information that seem of some utility for the network itself. The information
that is considered “not new” or “less important” is comparatively less the object of sharing.
This has important implications, because it suggests the conclusion that individuals use
online social networks to disseminate information that for them seems to be useful to allow
other individuals in the network to mobilize resources they might need, that is, a kind of information that is directly seen by those who share like a form of social capital that they wish
to make available for others. To put it another way, the individuals studied in this extensive
research denoted not only an acute awareness of the relevance some pieces of information
may have for them, but also of the importance that it may also have for other members of
their network or for the network as a whole. This means that there are two levels upon which
individuals see the sharing of information as enrichment (that is, increase of social value): the
enrichment of the individual himself; and the enrichment of the group or groups that he relates to. These are of course precisely the two levels that were mentioned above in the advanced hypothesis that the increase in the number of communication channels and the correspondent abundance of information was an element to increase the social value of information via the respective effect of producing social capital.
A final word to yet another quantitative study conducted by Ugander, Karrer, Backstrom
and Marlow in 2011 (Ugander, Karrer, Backstrom & Marlow, 2011). Although this study was
mostly directed at analyzing the structure and functioning of the Facebook network, for our
purpose there are two most relevant conclusions. The first is the extremely high degree of
connectivity displayed by the network, The researchers estimate that 99,91% of all the individuals connected to the network are in some way or another connected to each other. If, for
the purposes of this paper, we are to understand each connection as a potential generator of
social capital – and therefore a potential increase of social value - then this means that each
individual has at his or her disposal a potential to generate social value than was unknown in
history. The second conclusion that interests us is that the mediated network that each individual constructs on top of Facebook tends to be highly correlated with his or her offline network in terms of friendships and nationalities. What suggests, of course, that the adoption of
mediated social networks does not occur in opposition to offline social networks but rather
emerging from them. The conclusion that interests us is that what digital technologies associated with online social networks do is precisely increase the reach of the social connections
of the individuals, thus equally increasing the enrichment and value of their social experience.
Synthetizing, these three empirical studies seem to point all in one direction: the online
social network known as Facebook serves the purpose of disseminating information in order
to provide individuals with the social connections necessary to mobilize the several forms of
social capital available to them. And it does so with a reach and an intensity that was unknown until the emergence of online social networks operated with digital technologies. Differently said, the abundance of social connections that individuals can maintain today due to
digital information and communication technologies has the effect of enlarging and diversifying the social bonds they can keep active. What reflects in benefits for the individual and for
the collective, to which he or she belongs, proving that more information circulating in the
network is in itself an element of enrichment for the network and for the individuals that take
part in it. That is, the massive adoption of online social networks – an outpour of modern information and communication technologies – is an element that increases the social value of
information. If the social role of information is to connect the individuals and process the social mobilization of resources, then the massive expansion of connective possibilities allowed
by digital information and communication technologies cannot be discarded as an increase in
the social value of information, which of course is the hypothesis B1 we advanced earlier.
6. CONCLUSION
The use value of information is subjective and therefore impossible to quantify. Its exchange value, for its part, depends on multiple factors and is extremely complex to quantify.
Yet, that is exactly what we’ve tried to do in this paper, using indicators like the price of advertising or the average revenue per user. These quantitative indicators provide us some
insights into the economic value of information, but not into its social value. The social value
of information must be analyzed as a result of its social function.
The starting point for this paper, we should recall, was the changes introduced by the
network society and the migration to digital in the way we produce and distribute information
in society. The first hypothesis was that these new digital technologies and the network architecture upon which they operate necessarily reduce the economic value of information, thus
disrupting the business models of the traditional mass media. And the second hypothesis
was that those same technologies increase the social value of information, by way of its
abundance alongside the proliferation of new communication channels. The literature review
made at the beginning and the empirical data analyzed in the second part seem to confirm
these main hypotheses. First, the abundance of information that is the result of these technologies, side by side with the consumers of information converting into its producers and
distributors, is something that dilutes the economic value of information traditional business
models are able to harvest. And that means the professional structures put in place by the
mass media to produce and distribute information may not be sustainable in the new information and communication paradigm in which we’re living. If this conclusion is correct, that
means the obvious difficulty experienced by the mass media to find alternative business
models is not the result of their own failure or omission, but rather the effect of the new information and communication paradigm and the decrease in the economic value of information that it implies. In and by itself, this fact already carries massive consequences, if we
take into consideration that mass media are the institutional form by which the western market societies ensure the distribution of relevant information throughout society, with very strict
rules and regulations. In the new information and communication paradigm that supports this
society of networked computers, the social distribution of relevant information seems to be
dominated by new actors on the process. No longer the traditional mass media, as producers
and distributers of content, but the “new media”, which are platforms for the search, curation,
manipulation and distribution of information that act as tools for the communicative action of
individuals but are not themselves the producers of the content they search, curate, manipulate or distribute. This means that these new actors have found their “place” in the information distribution process in a way that is coherent with the architecture of the network society mediated by digital technologies. But, if our hypothesis is correct – as we believe to
have demonstrated – these “new media” of the network society are also affected by the referred decrease of the economic value of information and are only viable at the global scale
at which they operate. They are, therefore - and simultaneously - a product and an agent of
globalization.
What about the social value of information? The analysis we’ve made suggests that information still has the same basic social function: it’s the way by which social connections
are activated. The difference to our near past is that the network architecture that now characterizes the communication channels and the abundance of information that circulates in
the network both permit the increase of the number of social connections each individual can
maintain as well as the frequency and easiness with which he or she can activate them. And
that constitutes an increase in the social value that information may have both for the individual and for the groups and communities he or she makes part of and for society as a whole.
A couple of investigation paths that would be interesting to pursue in the future stand
out from this investigation. First, the question of what new business models the media may
adopt to retain their institutional position in society and the role that is reserved for journalism
in that context. The traditional social function of the media, related to the production and distribution of information that is true, relevant and reliable, was framed by a set of conditions
and constraints that were put in place to assure precisely those attributes. Assuming that
truthfulness, relevance and reliability are still necessary attributes of information, one possible line of investigation questions the new conditions and constraints that should be created
in the new digital information and communication paradigm for thos attributes to be maintained. To put it bluntly: if we don’t need journalism, what do we need in its place? Or, if we
still need journalism, of what kind?
On the other hand, the issues of privacy and power that are raised by the participation
of individuals in the new platforms for the production and distribution of information, alongside the relevant social role that those platforms perform in the new communication paradigm, inevitably leads us to question the respective collective control. In that regard, it would
be interesting to investigate new forms of exercising collective control (a form of power),
whether through direct public regulation or through any new system of “commons” that some
authors have been proposing.
Finally, with the greater role of computer intelligence in the process of social information, one has to question whether some of the safeguards for privacy, legality, relevance
or reliability of digital information fluxes should not be put inside the fluxes themselves via
computer algorithms, like some authors have already suggested.
In sum, same as the huge changes the network society and the digital technologies
brought have not yet stalled and continue to produce effects, so the challenges to someone
who wants to study the impact of those changes continues to arise. With this paper on the
economic and social value of information we hope to have contributed to that study.
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