Crowdsourcing, the Long Tail, and Prosumption

A small group discussion guide to crowdsourcing and the “New Economy.”


“Production, Consumption, Prosumption: The Nature of Capitalism in the Age of the Digital ‘Prosumer’”

“The Long Tail in the Entertainment Industry”

“The Rise of Crowdsourcing”

“When the Crowd Isn’t Wise”

“Human Workers, Managed by Algorithm”

For reference purposes:

“The New Economy”

“User-Generated Online Content”

The “gist”: The New Economy has been brewing since the mid-1990s, but its major impacts have until recently been deflected by such things as the dot-com crash, 9/11, and the mortgage meltdown. But the reorganization of business and society since the Great Recession depends, in large part, on ideas introduced in these readings. Uncoordinated, amateur, and naive users are transforming American life on and off the internet. They are also creating value and abundance, possibly without appropriate remuneration.

The economy of the future depends on the creative labor and production of individuals as much as collective enterprise. It is also fiercely competitive as digital transparency (for example, online price comparison) drives profit margins down to near zero. Middlemen are being eliminated by technologies of disintermediation, and whole economies are being bypassed by globalization of commerce. Traditional authorities are increasingly undermined and becoming radicalized (examples: Tea Party members, Islamic fundamentalists, librarians).

Key terms and definition:

The Long Tail – A term coin by Chris Anderson in 2004 framing the phenomena of niche markets composed of products and services in low demand and low sales volume. Reduced marketing and distribution costs in the twenty-first century have made these niches potentially profitable for individuals, challenging the traditional markets for “bestsellers” and “blockbusters.”

Content Aggregator – An organization or individual that collects online media from various sites and repackages it for reuse or resale on another site.

User Generated Content – Media product and recommendations crafted by amateurs rather than recognized experts and professionals.

Virtualization – Changing physical objects into digital products. The movement of music from CDs and CD making factories to digital music download sites is an example.

Molecularization – The transformation of the markets for production, distribution, and consumption of goods and services from the masses to individuals. The new economies of scale are smaller, plural, and austere. Bigger isn’t better anymore.

Disintermediation – The removal of an intermediary, or middleman, from a transaction or communication. The user or consumer gains direct access to information that otherwise would require a mediator, such as a salesperson, a librarian, or a lawyer.  New technologies give users the power to look up medical, legal information, travel, or comparative product data directly.

Prosumption – A portmanteau coined by futurologist Alvin Toffler combining the terms “producer” and “consumer,” emphasizing the falsity of the dichotomy of the two.

Convergence – The combination of old industries into new and vital ones. One example is the combination of newspaper, television, and web companies into “new media” empires.

Wisdom of Crowds – Collective intelligence producing superior (or mediocre) judgment.

Folksonomy – Collaboratively sorting, tagging, or classifying content using internet technologies. Participating in such a venture is sometimes called microvolunteering (see for example Galaxy Zoo or Foldit).

Discussion questions:

Does crowdsourcing produce quality or mediocrity? Can a crowd really defeat experts and professionals at all things? Or is crowdsourcing really best for accomplishing simple or nonserious tasks? Consider the list of 2,000+ crowdsourcing sites at

Who can actually make a living in a crowdsourced business like Amazon’s Mechanical Turk or InnoCentive? Is a system based on large groups of competing workers paid little (or nothing) for their efforts sustainable over the long haul? Is this unethical exploitation of the labor market?

What motivates people to do work for free?

What mundane activities and personal tasks in your daily life would you like to outsource/crowdsource to TaskRabbit? (See

Virtual Companies and the Death of the Permanent Office

Here’s a small group guide for a discussion of virtual companies.


Max Chafkin, “The Case, and the Plan, for the Virtual Company” Inc.

“Workplace Trends” [VIDEO] YNN

The “gist”: Virtual companies get their work done with minimal or no corporate headquarters or dedicated workspace. Sometimes they create cyberspace boardrooms using tools like Skype and ooVoo. Virtual work requires adjustments. Workers must be dedicated to the work itself rather than the social routines of the office. But, he argues, lots of types of work can’t be done efficiently at work anyway, especially tasks that require concentrated effort over long periods of uninterrupted time. As Chafkin notes, the workplace becomes an online market where a “culture of collaboration by a group of competent generalists” is replaced by “one based on specialists who are cheap, efficient, and good at meeting deadlines.” To counteract this negative effect, successful company owners and managers introduce and foster new online and offline collaboration products.

Key terms and definitions:

Mobile Work, Distributed Work – Distributed work reaches beyond the restrictions of a traditional office environment. A distributed workforce is disbursed geographically over a wide area – domestically or internationally. By installing key technologies, distributed companies enable employees located anywhere to access all of the company’s resources and software such as applications, data, and e-mail without working within the confines of a physical company-operated facility.

Virtual company – In virtual companies, employees are distributed but primarily remain unconnected. Such companies employ electronic means to transact business as opposed to a traditional brick-and-mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. Workers telecommute from other locations, and as much work as possible is usually outsourced to non-employee contractors.  Some virtual businesses operate solely in a virtual world.

Work-life balance – Work-life balance is having enough time for work and enough to have a family and personal life. It also means having a measure of control over when, where and how you work, leading to being able to enjoy an optimal quality of life.

Co-working centers – Co-working is a style of work that involves a shared working environment, often an office, and independent activity. Unlike in a typical office environment, those co-working are usually not employed by the same organization. Typically it is attractive to work-at-home professionals, independent contractors, or people who travel frequently who end up working in relative isolation. Some co-working spaces were developed by nomadic Internet entrepreneurs seeking an alternative to working in coffee shops and cafes, or to isolation in independent or home offices. See the recent story on Hacker Dojo (“Silicon Valley Techies Fight to Save a Popular but Illegal Haven”, which local authorities are threatening to close for violations of city regulations governing traditional workspaces.

Collaboration tools – A collaboration tool helps employees collaborate. Today, the term is often used to mean a piece of collaborative software. Conference phone calls are being replaced by asynchronous conferencing, video conferences, IRC or Instant Messaging. Peer review and editing of documents is done through Google Docs, Microsoft Office 365, and Wikis rather than as iterative versions printed out on paper. Board room whiteboards are imitated by online whiteboards that allow telework.

Discussion questions:

  • What do you consider the best place to get your homework done? Why is this a good place to work?
  • Should “distractions” like Facebook and Twitter – and perhaps even email on specific days – be banned at work? Why or why not?
  • Think about a place where you have worked or your parents worked. How could this work be improved (or degraded) by implementing the strategies mentioned in Chafkin’s article or the video?
  • In companies with flexible schedules, how do you manage who picks up the slack during crunch times? Are employees who are parents a special class, and do they get or deserve special treatment? How do you juggle competing interests to work/school tasks and family or home responsibilities?
  • Do managers really distract employees from their work? Do managers tend to mismanage their time and the time of others? What should managers really be doing, and where should they be learning how to be better supervisors?

Additional comments: Urban sociologist Ray Oldenburg in The Great Good Place argues that the best places to gather and get things done informally are what he calls “third places” like coffee shops, libraries, and pubs. He says these places, unlike home and work, represent “neutral ground” are important for civil society, democracy, and civic engagement.

As gasoline gets more expensive and commuting times get longer, virtual work is going to look more and more enticing to companies and their employees. In Iowa, my home state, government has made substantial progress in creating co-working centers in all 99 counties. Iowa is a big rural state with a low population, and workers are already dispersed over large geographical spaces. It makes sense to establish local workplaces where people do their daily jobs and can be gregarious – even when other employees in the building are working for entirely different companies.