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Summary:

Last week at EconSM, much of the discussion centered around the problems of a business model dependent on someone else’s business — say the…

Last week at EconSM, much of the discussion centered around the problems of a business model dependent on someone else’s business — say the reliance of Photobucket on access to MySpace. I don’t think we spent as much time as we could have on what may be the greatest risk with social media: the users. At its base, no social media business can succeed or survive without user loyalty; those with scale can afford some slippage but nothing wholesale.

Facebook heard that loud and clear last fall. This week, Digg faced it head on as the site learned just what could happen when its users revolt against policy. For the full blow by blow, see Techmeme. The abbreviated version: After Digg was warned by AACS LA that publishing a Linux hack for HD-DVD encryption could infringe intellectual property rights, the site started pulling the stories as covered by its terms of service. Digg CEO Jay Adelson’s explanation — “we all need to work together to protect Digg from exposure to lawsuits that could very quickly shut us down” — only fanned the flames. The result: a massive user revolt and the decision by Digg founder’s Kevin Rose to bow to what some are calling “mob rule” by agreeing to post the stories no matter the consequences. From his declaration of dependence:

“But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying.”

In other words, community first — even when it breaks your own rules, business second. This time. No clue as to what Digg will do the next time it’s faced with a take-down request on another topic but it’s clear who actually holds the power in this equation. What that means for business — not so clear.

  1. This is just the first of many such incidents that will plague Digg and eventually destroy it. In all media there must be some editorial constraint or chaos will ensue (see: Wikipedia & YouTube), but if you build a business where your customers expect no editorial control whatsoever expect that business to eventually fail.

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  2. It seems to boil down to expectations and transparency. Set the expectations up front (ie. nothing illegal will stay, no threats, etc.) and maintain transparency on what you're doing and why. This same "mob" obeys stop signs, drives on the right side of the road……

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  3. Nice piece, Staci.

    What I find most fascinating here is the automatic assumption that chaos is evil. This is a purely modernist perspective, but life itself proves it to be false. Moreover, as JBreed points out, with any form of internal governor — especially if it is dedicated to self-preservation — people will generally obey cultural rules.

    The essential problem with all modernist dogma is the insistence that without a strong external governor (usually belonging to the haves), we'll sink to the Lord of the Flies level. The revolution that's underway in the communications world is arming the mob with the power of information, so I just don't buy the argument that we're all hell bound without "control."

    And you also have to consider the significance of what was driving the mob at DIGG. Was it the HD-DVD hack or being told they couldn't share the hack?

    There is much that can be said about the copyright cartel and how it has stifled creativity in the name of the almighty dollar — and the slight-of-hand evident in publicly stating "it's about the artist" when it's really about stuffing the profit pockets of those who control what you and I watch and listen to.

    But I'll leave that to others.

    Thanks again for your great work. Tell Rafat I said hello.

    Terry

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  4. Nice concise run-down of the story. Regarding what it means for business, I think it means the same thing that annoying Time magazine cover tried to convey – the consumer, or in this case, community, is in control. The fact is they always have been. Only now more people realize it and they have the tools to network and share opinions on a whole new, almost instantaneous level.

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