April 29

Monetization of Word of Mouth

The method for doing business as an independent musician has been shifting quite a bit over the past few years.  I’ve been trying very hard to diagnose the problem, and how to figure out a solution for it, but it’s a very complicated issue.  I think I’ve figured out one of the sources of problems, and it’s something that I will call “Monetization of Word of Mouth.”

The idea is that prior to social media (and during the beginning years of social media), there was a thing called “word of mouth”, where people who were connected to one another could pass along things that they were excited about, where communication along such routes could build on itself to create what people call “buzz”.  The problem is that the dominant forms of communication are now monitored and controlled by social media corporations, such as Facebook, which pull the double-whammy of downgrading information that people might become excited about, and then charging people to make that information accessible to people who might otherwise become excited about it.  In other words, once social media corporations figured out that people placed value in communicating certain kinds of information to others, since it controlled the pathways along with this communication occurred, it determined that it could monetize that value and the charge for accessibility as a “service” that it offered.  In other words, the monetization of word of mouth.

The role of Facebook in monetizing word of mouth is much like that of a bridge troll that finds an existing source of value, and then seizes control of it, in order to charge a toll to people that need to use it, even though it adds very little of value, thus causing a net reduction in value to society as a whole.

The concept is simple enough, but what’s more difficult to figure out are the vast array of effects that this kind of monetizing behavior can have on the public.  There are externalities associated with this kind of behavior.

A classic illustration of how it can manifest in unexpected ways is the act of “linking in the comments.”  The rumor is that Facebook downgrades posts that have links in the post, because it sees the post as an opportunity to collect, so it downgrades the post, and requests a fee to “boost” the post, if it thinks you have an associated Business page.  This would be an illustration at attempting to “game the algorithm” that Facebook puts in place to downgrade communications.

Another manifestation is the adjustment in singles releases.  As many musicians find it difficult to compete in the music marketplace (especially against well-funded competition), musicians have turned to other methods of distribution to try and generate buzz.  So for instance, many musicians try to release a larger number of singles in order to try and gain Spotify followers, given the impression that the Spotify algorithm does not appear to be a pay-to-play platform.  This would be an illustration of avoidance.

Separate from direct effects on musician behavior, I believe Monetization of Word of Mouth is generally the cause of outlets reducing coverage of non-celebrity musicians, and the tightening of music curation to preferred publicists and labels.  The idea is that given the Monetization of Word of Mouth, outlets are somewhat disincentivized to write about a musician given a presumption that they will have to pay for an article to get sufficient distribution.  Given this, it makes sense on the part of the outlet to have a security in distribution, based on the musician’s social media fundamentals and/or business relationships.  The limitation of publication to musicians that come from trusted publicists and labels is little more than a limitation which provides a guarantee that the musician has the requisite social fundamentals to provide distribution that the outlet would otherwise have to pay for.

Of course, outlets have always had a financial incentive in writing about things that generate profits.  That’s where the concept “if it bleeds, it leads” comes from.  But I think the issue is a bit more problematic than that.  It’s not just that writers have a perverse incentive that affects the content of their writing.  It’s that individuals that can guarantee distribution can more straightforwardly direct what the outlet writes – something more akin to pay-to-play.  What happens is not directly an example of pay-to-play, in which a musician pays the outlet directly to write.  But from an ethical perspective, it’s not clear that it’s that different.  The only difference is that the musician pays the outlet by way of a guarantee on ad-click revenue, and a form of advertisement of the outlet itself – things which the modern economy has already monetized as having a discrete economic value.  The difference is that the payment isn’t made directly by the musician, it’s made indirectly by the musician’s guarantee on ad-click revenue and publicity for the outlet.  The decision to write is still (1) based on a financial guarantee, (2) a guarantee that is made by the musician, (3) where the musician pays for the guarantee.  It’s just that the payment is directly made by a third party.  Kind of like if the President pays his attorney a fee, and the attorney pays a stripper hush money to not disclose infidelities to the press.  The mere fact of indirectness in the exchange doesn’t eliminate the ethical problem – any more than an ethical problem disappears when responsibility for action is distributed to a network of people.  A sort of externality exists then, in that Monetization of Word of Mouth facilities pay-to-play in a new form.

But there are other ways this can manifest.  Think for instance, that because of Monetization of Word of Mouth, music journalism decisions to publish an article have the whiff of financial investment.  And that is very troublesome.  I believe it’s probably the primary cause of the shift in music journalism to celebrity-news, and anniversary-nostalgia pieces that seem to dominate.  Given the above observations about social-media profiles, this shift makes a lot of sense, because celebrities and nostalgia provide a guarantee on distribution.  This is a result of music journalism being viewed as a form of financial investment.

Beyond that, when word of mouth becomes controlled and monetized by a corporation, does that convert public communication in general into a form of financial investment.  And if it does, shouldn’t we be more worried about that?

Think for instance that on Instagram, where there is less of a distinction between business and personal accounts, people can pay to have their communications more effectively distributed to people in their network (and beyond).  Will wealthy people be able to directly purchase greater popularity amongst their friends at the expense of silencing other people in their social circles?  The possibilities make me shudder.