Communities, Audiences, and Scale

April 6, 2002

Prior to the internet, the differences in communication between community and audience was largely enforced by media — telephones were good for one-to-one conversations but bad for reaching large numbers quickly, while TV had the inverse set of characteristics. The internet bridged that divide, by providing a single medium that could be used to address either communities or audiences. Email can be used for conversations or broadcast, usenet newsgroups can support either group conversation or the broadcast of common documents, and so on. Most recently the rise of software for “The Writable Web”, principally weblogs, is adding two-way features to the Web’s largely one-way publishing model.

With such software, the obvious question is “Can we get the best of both worlds? Can we have a medium that spreads messages to a large audience, but also allows all the members of that audience to engage with one another like a single community?” The answer seems to be “No.”

Communities are different than audiences in fundamental human ways, not merely technological ones. You cannot simply transform an audience into a community with technology, because they assume very different relationships between the sender and receiver of messages.

Though both are held together in some way by communication, an audience is typified by a one-way relationship between sender and receiver, and by the disconnection of its members from one another — a one-to-many pattern. In a community, by contrast, people typically send and receive messages, and the members of a community are connected to one another, not just to some central outlet — a many-to-many pattern [1]. The extreme positions for the two patterns might be visualized as a broadcast star where all the interaction is one-way from center to edge, vs. a ring where everyone is directly connected to everyone else without requiring a central hub.

As a result of these differences, communities have strong upper limits on size, while audiences can grow arbitrarily large. Put another way, the larger a group held together by communication grows, the more it must become like an audience — largely disconnected and held together by communication traveling from center to edge — because increasing the number of people in a group weakens communal connection. 

The characteristics we associate with mass media are as much a product of the mass as the media. Because growth in group size alone is enough to turn a community into an audience, social software, no matter what its design, will never be able to create a group that is both large and densely interconnected. 

Community Topology

This barrier to the growth of a single community is caused by the collision of social limits with the math of large groups: As group size grows, the number of connections required between people in the group exceeds human capacity to make or keep track of them all.

A community’s members are interconnected, and a community in its extreme position is a “complete” network, where every connection that can be made is made. (Bob knows Carol, Ted, and Alice; Carol knows Bob, Ted, and Alice; and so on.) Dense interconnection is obviously the source of a community’s value, but it also increases the effort that must be expended as the group grows. You can’t join a community without entering into some sort of mutual relationship with at least some of its members, but because more members requires more connections, these coordination costs increase with group size.

For a new member to connect to an existing group in a complete fashion requires as many new connections as there are group members, so joining a community that has 5 members is much simpler than joining a community that has 50 members. Furthermore, this tradeoff between size and the ease of adding new members exists even if the group is not completely interconnected; maintaining any given density of connectedness becomes much harder as group size grows. As new members join, it creates either more effort or lowers the density of connectedness, or both, thus jeopardizing the interconnection that makes for community. [2]

As group size grows past any individual’s ability to maintain connections to all members of a group, the density shrinks, and as the group grows very large (>10,000) the number of actual connections drops to less than 1% of the potential connections, even if each member of the group knows dozens of other members. Thus growth in size is enough to alter the fabric of connection that makes a community work. (Anyone who has seen a discussion group or mailing list grow quickly is familiar with this phenomenon.)

An audience, by contrast, has a very sparse set of connections, and requires no mutuality between members. Thus an audience has no coordination costs associated with growth, because each new member of an audience creates only a single one-way connection. You need to know Yahoo’s address to join the Yahoo audience, but neither Yahoo nor any of its other users need to know anything about you. The disconnected quality of an audience that makes it possible for them to grow much (much) larger than a connected community can, because an audience can always exist at the minimum number of required connection (N connections for N users).

The Emergence of Audiences in Two-way Media

Prior to the internet, the outbound quality of mass media could be ascribed to technical limits — TV had a one-way relationship to its audience because TV was a one-way medium. The growth of two-way media, however, shows that the audience pattern re-establishes itself in one way or another — large mailing lists become read-only, online communities (eg. LambdaMOO, WELL, ECHO) eventually see their members agitate to stem the tide of newcomers, users of sites like slashdot see fewer of their posts accepted. [3]

If real group engagement is limited to groups numbering in the hundreds or even the thousands [4], then the asymmetry and disconnection that characterizes an audience will automatically appear as a group of people grows in size, as many-to-many becomes few-to-many and most of the communication passes from center to edge, not edge to center or edge to edge. Furthermore, the larger the group, the more significant this asymmetry and disconnection will become: any mailing list or weblog with 10,000 readers will be very sparsely connected, no matter how it is organized. (This sparse organization of the larger group can of course encompass smaller, more densely clustered communities.)

More Is Different

Meanwhile, there are 500 million people on the net, and the population is still growing. Anyone who wants to reach even ten thousand of those people will not know most of them, nor will most of them know one another. The community model is good for spreading messages through a relatively small and tight knit group, but bad for reaching a large and dispersed group, because the tradeoff between size and connectedness dampens message spread well below the numbers that can be addressed as an audience.

It’s significant that the only two examples we have of truly massive community spread of messages on the internet — email hoaxes and Outlook viruses — rely on disabling the users’ disinclination to forward widely, either by a social or technological trick. When something like All Your Base or OddTodd bursts on the scene, the moment of its arrival comes not when it spreads laterally from community to community, but when that lateral spread attracts the attention of a media outlet [5].

No matter what the technology, large groups are different than small groups, because they create social pressures against community organization that can’t be trivially overcome. This is a pattern we have seen often, with mailing lists, BBSes, MUDs, usenet, and most recently with weblogs, the majority of which reach small and tightly knit groups, while a handful reach audiences numbering in the tens or even hundreds of thousands (e.g. andrewsullivan.com.)

The inability of a single engaged community to grow past a certain size, irrespective of the technology, will mean that over time, barriers to community scale will cause a separation between media outlets that embrace the community model and stay small, and those that adopt the publishing model in order to accommodate growth. This is not to say that all media that address ten thousand or more people at once are identical; having a Letters to the Editor column changes a newspaper’s relationship to its audience, even though most readers never write, most letters don’t get published, and most readers don’t read every letter.

Though it is tempting to think that we can somehow do away with the effects of mass media with new technology, the difficulty of reaching millions or even tens of thousands of people one community at a time is as much about human wiring as it is about network wiring. No matter how community minded a media outlet is, needing to reach a large group of people creates asymmetry and disconnection among that group — turns them into an audience, in other words — and there is no easy technological fix for that problem. 

Like the leavening effects of Letters to the Editor, one of the design challenges for social software is in allowing groups to grow past the limitations of a single, densely interconnected community while preserving some possibility of shared purpose or participation, even though most members of that group will never actually interact with one another.


Footnotes

1. Defining community as a communicating group risks circularity by ignoring other, more passive uses of the term, as with “the community of retirees.” Though there are several valid definitions of community that point to shared but latent characteristics, there is really no other word that describes a group of people actively engaged in some shared conversation or task, and infelicitous turns of phrase like ‘engaged communicative group’ are more narrowly accurate, but fail to capture the communal feeling that arises out of such engagement. For this analysis, ‘community’ is used as a term of art to refer to groups whose members actively communicate with one another. [Return]

2. The total number of possible connections in a group grows quadratically, because each member of a group must connect to every other member but themselves. In general, therefore, a group with N members has N x (N-1) connections, which is the same as N2 – N. If Carol and Ted knowing one another count as a single relationship, there are half as many relationships as connections, so the relevant number is (N2 – N)/2.

Because these numbers grow quadratically, every 10-fold increase in group size creates a 100-fold increase in possible connections; a group of ten has about a hundred possible connections (and half as many two-way relationships), a group of a hundred has about ten thousand connections, a thousand has about a million, and so on. The number of potential connections in a group passes a billion as group size grows past thirty thousand. [Return]

3. Slashdot is suffering from one of the common effects of community growth — the uprising of users objecting to the control the editors exert over the site. Much of the commentary on this issue, both at slashdot and on similar sites such as kuro5hin, revolves around the twin themes of understanding that the owners and operators of slashdot can do whatever they like with the site, coupled with a surprisingly emotional sense of betrayal that the community control, in the form of moderation. 

(More at kuro5hin and slashdot. [Return]

4. In Grooming, Gossip, and the Evolution of Language (ISBN 0674363361), the primatologist Robin Dunbar argues that humans are adapted for social group sizes of around 150 or less, a size that shows up in a number of traditional societies, as well as in present day groups such as the Hutterite religious communities. Dunbar argues that the human brain is optimized for keeping track of social relationships in groups small than 150, but not larger. [Return]

5. In The Tipping Point (ISBN 0316346624), Malcolm Gladwell detailed the surprising spread of Hush Puppies shoes in the mid the ’90s, from their adoption by a group of cool kids in the East Village to a national phenomenon. The breakout moment came when Hush Puppies were adopted by fashion designers, with one designer going so far as to place a 25 foot inflatable Hush Puppy mascot on the roof of his boutique in LA. The cool kids got the attention of the fashion designers, but it was the fashion designers who got the attention of the world, by taking Hush Puppies beyond the communities in which it started and spreading them outwards to an audience that looked to the designers. [Return]

Help, The Price of Information Has Fallen And It Can’t Get Up

Among people who publish what is rather deprecatingly called ‘content’ on the Internet, there has been an oft repeated refrain which runs thusly:

‘Users will eventually pay for content.’

or sometimes, more petulantly,

‘Users will eventually have to pay for content.’

It seems worth noting that the people who think this are wrong.

The price of information has not only gone into free fall in the last few years, it is still in free fall now, it will continue to fall long before it hits bottom, and when it does whole categories of currently lucrative businesses will be either transfigured unrecognizably or completely wiped out, and there is nothing anyone can do about it.

ECONOMICS 101

The basic assumption behind the fond hope for direct user fees for content is a simple theory of pricing, sometimes called ‘cost plus’, where the price of any given thing is determined by figuring out its cost to produce and distribute, and then adding some profit margin. The profit margin for your groceries is in the 1-2% range, while the margin for diamonds is often greater than the original cost, i.e greater than 100%.

Using this theory, the value of information distributed online could theoretically be derived by deducting the costs of production and distribution of the physical objects (books, newspapers, CD-ROMs) from the final cost and reapplying the profit margin. If paying writers and editors for a book manuscript incurs 50% of the costs, and printing and distributing it makes up the other 50%, then offering the book as downloadable electronic text should theoretically cut 50% (but only 50%) of the cost.

If that book enjoys the same profit margins in its electronic version as in its physical version, then the overall profits will also be cut 50%, but this should (again, theoretically) still be enough profit to act as an incentive, since one could now produce two books for the same cost.

ECONOMICS 201

So what’s wrong with that theory? Why isn’t the price of the online version of your hometown newspaper equal to the cover price of the physical product minus the incremental costs of production and distribution? Why can’t you download the latest Tom Clancy novel for $8.97?

Remember the law of supply and demand? While there are many economic conditions which defy this old saw, its basic precepts are worth remembering. Prices rise when demand outstrips supply, even if both are falling. Prices fall when supply outstrips demand, even if both are rising. This second state describes the network perfectly, since the Web is growing even faster than the number of new users.

From the point of view of our hapless hopeful ‘content provider’, waiting for the largesse of beneficent users, the primary benefits from the network come in the form of cost savings from storage and distribution, and in access to users worldwide. From their point of view, using the network is (or ought to be) an enormous plus as a way of cutting costs.

This desire on the part of publishers of various stripes to cut costs by offering their wares over the network misconstrues what their readers are paying for. Much of what people are rewarding businesses for when they pay for ‘content’, even if they don’t recognize it, is not merely creating the content but producing and distributing it. Transporting dictionaries or magazines or weekly shoppers is hard work, and requires a significant investment. People are also paying for proximity, since the willingness of the producer to move newspapers 15 miles and books 1500 miles means that users only have to travel 15 feet to get a paper on their doorstep and 15 miles to get a book in the store.

Because of these difficulties in overcoming geography, there is some small upper limit to the number of players who can sucessfully make a business out of anything which requires such a distribution network. This in turn means that this small group (magazine publishers, bookstores, retail software outlets, etc.) can command relatively high profit margins.

ECONOMICS 100101101

The network changes all of that, in way ill-understood by many traditional publishers. Now that the cost of being a global publisher has dropped to an up-front investment of $1000 and a monthly fee of $19.95, (and those charges are half of what they were a year ago and twice what they will be a year from now), being able to offer your product more cheaply around the world offers no competitive edge, given that everyone else in the world, even people and organizations who were not formerly your competitors, can now effortlessly reach people in your geographic locale as well.

To take newspapers as a test case, there is a delicate equilibrium between profitibility and geography in the newspaper business. Most newspapers determine what regions they cover by finding (whether theoretically or experiemntally) the geographic perimeter where the cost of trucking the newspaper outweighs the willingess of the residents to pay for it. Over the decades, the US has settled into a patchwork of abutting borders of local and regional newspapers.

The Internet destroys any cost associated with geographic distribution, which means that even though each individual paper can now reach a much wider theoretical audience, the competition also increases for all papers by orders of magnitude. This much increased competition means that anyone who can figure out how to deliver a product to the consumer for free (usually by paying the writers and producers from advertising revenues instead of direct user fees, as network television does) will have a huge advantage over its competitors.

IT’S HARD TO COMPETE WITH FREE.

To see how this would work, consider these three thought experiments showing how the cost to users of formerly expensive products can fall to zero, permanently.

  • Greeting Cards

Greeting card companies have a nominal product, a piece of folded paper with some combination of words and pictures on it. In reality, however, the greeting card business is mostly a service industry, where the service being sold is convenience. If greeting card companies kept all the cards in a central warehouse, and people needing to send a card had to order it days in advance, sales would plummet. The real selling point of greeting cards is immediate availability – they’re on every street corner and in every mall.

Considered in this light, it is easy to see how the network destroys any issue of convenience, since all Web sites are equally convenient (or inconvenient, depending on bandwidth) to get to. This ubiquity is a product of the network, so the value of an online ‘card’ is a fraction of its offline value. Likewise, since the costs of linking words and images has left the world of paper and ink for the altogether cheaper arena of HTML, all the greeting card sites on the Web offer their product for free, whether as a community service, as with the original MIT greeting card site, or as a free service to their users to encourage loyalty and get attention, as many magazine publishers now do.

Once a product has entered the world of the freebies used to sell boxes of cereal, it will never become a direct source of user fees again.

  • Classified Ads

Newspapers make an enormous proportion of their revenues on classified ads, for everything from baby clothes to used cars to rare coins. This is partly because the lack of serious competition in their geographic area allows them to charge relatively high prices. However, this arrangement is something of a kludge, since the things being sold have a much more intricate relationship to geography than newspapers do.

You might drive three miles to buy used baby clothes, thirty for a used car and sixty for rare coins. Thus, in the economically ideal classified ad scheme, all sellers would use one single classified database nationwide, and then buyers would simply limit their searches by area. This would maximize the choice available to the buyers and the cost able to be commanded by the sellers. It would also destroy a huge source of newspapers revenue.

This is happening now. The search engines like Yahoo and Lycos, the agora of the Web, are now offering classified ads as a service to get people to use their sites more. Unlike offline classified ads, however, the service is free to both buyer and seller, since the sites are both competing with one another for differentiators in their battle to survive, and they are extracting advertising revenue (on the order of one-half of one cent) every time a page on their site is viewed.

When a product can be profitable on gross revenues of one-half of one cent per use, anyone deriving income from traditional classifieds is doomed in the long run.

  • Real-time stock quotes

Real time stock quotes, like the ‘ticker’ you often see running at the bottom of financial TV shows, used to cost a few hundred dollars a month, when sold directly. However, much of that money went to maintaining the infrastructure necessary to get the data from point A, the stock exchange, to point B, you. When that data is sent over the Internet, the costs of that same trip fall to very near zero for both producer and consumer.

As with classified ads, once this cost is reduced, it is comparatively easy for online financial services to offer this formerly expensive service as a freebie, in the hopes that it will help them either acquire or retain customers. In less than two years, the price to the consumer has fallen from thousands of dollars annually to all but free, never to rise again.

There is an added twist with stock quotes, however. In the market, information is only valuable as a delta between what you know and what other people know – a piece of financial information which everyone knows is worthless, since the market has already accounted for it in the current prices. Thus, in addition to making real time financial data cost less to deliver, the Internet also makes it _worth_ less to have.

TIME AIN’T MONEY IF ALL YOU’VE GOT IS TIME

This last transformation is something of a conundrum – one of the principal effects of the much-touted ‘Information Economy’ is actually to devalue information more swiftly and more fully. Information is only power if it is hard to find and easy to hold, but in an arena where it is as fluid as water, value now has to come from elsewhere. 

The Internet wipes out of both the difficulty and the expense of geographic barriers to distribution, and it does it for individuals and multi-national corporations alike. “Content as product” is giving way to “content as service”, where users won’t pay for the object but will pay for its manipulation (editorial imprimatur, instant delivery, custom editing, filtering by relevance, and so on.) In my next column, I will talk about what the rising fluidity and falling cost of pure information means for the networked economy, and how value can be derived from content when traditional pricing models have collapsed.