Prosumer

Prosumer is a portmanteau formed by contracting either the word professional or less often, producer with the word consumer. For example, a prosumer grade digital camera is a "cross" between consumer grade and professional grade. But the "professional consumer" type of prosumer has attempted to educate self on all the purchasing choices, costs and so forth.

The term has also taken on multiple meanings in business and economics: the business sector sees the prosumer (professional–consumer) as a market segment, whereas economists see the prosumer (producer–consumer) as having greater independence from the mainstream economy. These differing meanings often describe the same people; consumers unusually interested in the products. It can also be used to differentiate the traditional passive consumer with an active consumer role more involved in the process, such as activity in the design or customization of the end product.

Definition variations

General meanings

• The term was coined by futurologist Alvin Toffler in 1980 and that meaning is not commonly used today. Loosely, Toffler's "proactive consumer" prosumers were common consumers who were predicted to each become active to help personally improve or design the goods and services of the marketplace, transforming it and their roles as consumers.
  ...And today it is now common to personally custom order our computers from the factory, then further customize our electronic tools and toys with custom-added or personally modified software. Toffler is discussed in depth below.
• By far the most common usage of the term describes the consumers, enthusiasts who buy products (almost always technical) that fall between professional and consumer grade standards in quality, complexity, or functionality. Prosumer also commonly refers to those products. Semiprofessional. "Prosumer" is a well-accepted category for camcorders, digital cameras, VCRs, "and other video playthings."^[1] These advanced product features and higher prosumer expectations lend themselves to increased customizing in Toffler's product-improvement sense.^[2]
• The "producing consumer" prosumer creates goods for their own use and also possibly to sell. Uncommon usage.
• "Professional consumers" prosumers are excellent, better informed consumers who are buying top-grade or best-value products, or think they are. This group also includes a broader target for marketers and advertisers. According to Prosumer-Reports.com this attractive hip, young group "are influencing markets all over the globe. Empowered by new technologies and improved access to information, Prosumers are highly knowledgeable and demanding consumers."^[3] Uncommon or sarcastic usage; "Americans are prosumers." "I'm a professional “prosumer” and shopaholic."^[4]

Producer and consumer

Marshall McLuhan and Barrington Nevitt suggested in their 1972 book Take Today, (p. 4) that with electric technology, the consumer would become a producer. In the 1980 book, The Third Wave, futurologist Alvin Toffler coined the term "prosumer" when he predicted that the role of producers and consumers would begin to blur and merge (even though he described it in his book Future Shock from 1970). Toffler envisioned a highly saturated marketplace as mass production of standardized products began to satisfy basic consumer demands. To continue growing profit, businesses would initiate a process of mass customization, that is the mass production of highly customized products.

However, to reach a high degree of customization, consumers would have to take part in the production process especially in specifying design requirements. In a sense, this is merely an extension or broadening of the kind of relationship that many affluent clients have had with professionals like architects for many decades.

Toffler has extended these and many other ideas well into the 21st-century. Along with recently published works such as Revolutionary Wealth (2006), we can recognize and assess both the concept and fact of the prosumer as it is seen and felt on a worldwide scale. That these concepts are having global impact and reach, however, can be measured in part by noting in particular, Toffler's popularity in China. Discussing some of these issues with Newt Gingrich on C-Span's After Words program in June 2006, Toffler mentioned that The Third Wave is the second ranked bestseller of all time in China, just behind a work by Mao Zedong.^[5]

Don Tapscott reintroduced the concept in his 1995 book The Digital Economy.

Despite several decades of usage, the term only recently began to receive full theoretical elaboration. George Ritzer and Nathan Jurgenson, in a widely cited article, claim that prosumption has become a salient characteristic of Web 2.0. Prosumers create value for companies without receiving wages.

Mass customization has not taken place in most areas of the economy. Mass customization has ruled the food & beverage industry for years. Look at how many choices we are faced with in the grocery stores and supermarkets. Brand extension and dilution are ways companies have sold more under various names, giving us thousands of choices. Most consumption continues to be passive as critics of television, recorded music, and fast food would argue. Indeed, people are generally uninterested in going to the effort of customizing the myriad products that comprise modern consumer culture. In The Paradox of Choice: Why More is Less, Barry Schwartz argues that diminishing returns from a confusing abundance of consumer choice is producing stress and dissatisfaction.³ Still, one key area of high-customization is taking place: highly involved hobbyists.

Professional consumer

With customization focused on leisure pursuits, Toffler's initial combination has been largely supplanted by a second pair of blurring roles: that of the professional and consumer. In particular, hobbyists have become ever-more demanding in the pursuits of their hobbies, often rising above the level of dilettante (an amateur, someone who dabbles in a field out of casual interest rather than as a profession or serious interest) to the point of commanding skills equal to that of professionals. Key examples of such hobbies are:

• home improvement as illustrated by the rise of hardware stores such as Home Depot
• cooking as illustrated by creation of entirely new cable television channels entirely dedicated to the culinary arts such as The Food Channel or Food Network
• photography as illustrated by still cameras and camcorders that, often, are on a par with equipment used by professionals

This professional slant of the prosumer term is most common in photography which is a field that highlights prosumer trends. Access to professional-level equipment and skills is made possible by combination of factors such as:

• high disposable incomes by some sectors of the population
• increased leisure time, again, for some sectors of the population
• continuously falling prices of ever more advanced products (especially electronics)
• media geared towards amateurs and hobbyists:
  • beginning in the 1980s with the advent of desktop publishing, a growing profusion of magazines to satisfy specialized interests
  • beginning in the mid-1990s with the advent of the Internet, an even wider range of websites with online forums to pool experience
• Pertaining to electronics; are considered to be "on the fence" as a product of lower quality than a professional product, and higher quality (sometimes in the form of bells and whistles) than a consumer product. Some examples include:
  • Digital camcorders
  • Still cameras
  • HDTVs

Non-corporate producer and consumer

Yet a third meaning or usage of prosumer is springing up, especially among some activist groups. That is, the producer and consumer roles are being combined so as to exclude (or at least diminish) the role of the corporate producer; thus, rather than generating higher corporate profits from value-added products, producers would, at best, be reduced to supplying lower-profit commodity inputs. Indeed, the more consumer-oriented prosumer spin is irrelevant to many people with diminished disposable income caused by various economic trends such as globalization, automation, and wealth concentration. Identifiable trends and movements outside of the mainstream economy that have adopted prosumer terminology and techniques include:

• a Do It Yourself (DIY) approach as a means of economic self-sufficiency or simply as a way to survive on diminished income
• the voluntary simplicity movement that seeks personal, social, and environmental goals through prosumer activities such as:
  • growing one's own food
  • repairing clothing and appliances rather than buying new items
  • playing musical instruments rather than listening to recorded music
• use of new media-creation and distribution technologies to foster independent media (see Indymedia); many involved in independent media reject mass culture generated by concentrated corporate media
• self-sufficient barter networks, notably in developing nations, such as Argentina's RGT have adopted the term prosumer⁴

These blurrings of the roles of consumer and producer have their predecessor in the cooperative self-help movements that sprang up during various economic crises e.g. the Great Depression in the 1930s.

Influence on a company's R & D budget

A fourth view of the Prosumer is as one who can influence the R & D spending of a company in ways which directly benefit them. For example, say you’re a manufacturer of widgets. One of your customers changes their requirements and asks that all their widgets sing. This customer is important enough that losing them would seriously hurt your bottom line. Based on their request you direct a portion of your R & D budget to solve their specific problem. While the customer didn’t directly make the changes they did influence your company with their design requirements. This arrangement has positive effects for both parties:

For the customer:

• Immediate access to the new technology.
• The technology meets their specific requirements.

For the company:

• Strengthened relationship with the customer.
• Demonstrates a willingness to keep their customers satisfied.
• The company now has a new feature/product/service they can market to other customers.

Prosumerise

In their paper entitled "When the Enterprise becomes the Prosumerise",[1] Widality discusses how the very different IT and mobility needs of the prosumer, consumer and enterprise are all now melding into a common set of requirements, driven by the rise of smartphones and downloadable applications that consumers, prosumers and enterprises are consuming in equal numbers. Solutions providers can now address the "Prosumerise" (i.e. the combined needs of the consumer, prosumer and enterprise) with common solutions. Prosumerise can also be used as a verb to describe the act of prosumerising a technology or market.

Prosumption

In their book Wikinomics: How Mass Collaboration Changes Everything, Don Tapscott and Anthony D. Williams coined the related term of prosumption (production/consumption) to refer to the creation of products and services by the same people who will ultimately use them. The book states criteria that increase the value of prosumers' participation such as openness, sharing, peering, globalizing. But empirically some criteria have inverse relationships. ^[6] Companies and individuals are increasingly utilizing and involving the end-users to develop final products and services. In some instances, end-users are creating products on their own, without the interference or assistance of third-parties (i.e. companies, organizations, etc). For example, Lego Mindstorms allows users to download software from Lego's website so that the users can edit and update software as they wish.

References

1. ^ It's usage grew when "it became associated with the video equipment market." http://www.wordspy.com/words/prosumer.asp
2. ^ For example, the open source Canon Hack Development Kit (CHDK) upgrade has been available for most Canon Powershot prosumer grade cameras since about 2008. That evolving system includes various free, highly customizable time-lapse intervalometers, remote shutter and motion-detect triggers, Raw image format, and various override BASIC scripts and other advanced custom features. See the "CHDK wiki;" http//chdk.wikia.com/wiki/CHDK or the "CHDK forum;" http://chdk.setepontos.com/
3. ^ "What they [prosumers] are doing today, mainstream consumers are likely to be doing six to eighteen months from now." http://www.prosumer-report.com/
4. ^ http://www.prsa.org/Intelligence/BusinessCase/OnTheCaseWith/Cases/view/8773/106/On_the_Case_with_MaryLee_Sachs
5. ^ "C-SPAN - After Words created. Toffler interviewed by Gingrich Episode". C-SPAN. June 6, 2006. http://www.trumix.com/podshows/521309. Retrieved December 5, 2008. 
6. ^ "Studying prosumers' value on innovation products". 2011 - till present. https://spreadsheets.google.com/viewform?hl=en&formkey=dFgxb3hBN2sxbTNaQUpUdk5kc043cFE6MQ#gid=0. 

Lui, K.M. and Chan, K.C.C. (2008) Software Development Rhythms: Harmonizing Agile Practices for Synergy, John Wiley and Sons, ISBN 978-0-470-07386-5

Ritzer, G. & Jurgenson, N., 2010. Production, Consumption, Prosumption. Journal of Consumer Culture, 10(1), pp.13 -36. http://joc.sagepub.com/cgi/reprint/10/1/13?ijkey=KKTk6xYE6Vq1c&keytype=ref&siteid=spjoc&utm_source=eNewsletter&utm_medium=email&utm_campaign=1J22

See also

• Commons-based peer production

External links

• Turns of Phrase: Prosumer - business-oriented definitions of producer/professional and consumer
• February 2004 Datacloud on "Consumer" - relating Toffler/cluetrain and noting examples of corporate prosumer activity
• Review of The Paradox of Choice: Why More is Less - from January, 2004 Christian Science Monitor
• Argentina's RGT - The World's Largest "Usury-Free" Barter and Trading Network - activist-oriented usage of prosumer
• DIY happy - A website devoted to helping people reach economic self-sufficiency through daily coverage of numerous DIY projects.
• Wikihowto - A wiki website aiming to make know-how free, providing consumers another option - not just to buy, but create it themselves.
• widwi = what I did with it - A website for do-it-yourselfers to share 'before' and 'after' pictures of their projects.
• Managing Prosumers - An article from ComputerWorld magazine about prosumers and their influence on wireless devices.
• Prometeus: the future of media - The rise of the Prosumer by a video.
• Prosumer Studies Working Group - A group based in the University of Maryland Sociology Department that publishes on the topic of Prosumption.