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Zynga’s rise and fall

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As we will see, this is not where Zynga’s story ends. For platform operators like Facebook, to grow their platform they need to forge and sustain relationships with both end-users and external developers, or “complementors.” This process of constant change and adaptation is referred to as “platform evolution” (Helmond et al., 2019; Tiwana, 2014). As Zynga became increasingly popular, Facebook users grew less and less tolerant of the annoying FarmVille notifications. To appease them, in 2010 the social network started to limit Zynga’s ability to post content on the News Feed. And in 2012, Facebook de-friended the game developer by severing its “special relationship”; suddenly – to extend the platform’s relationship metaphor – Zynga’s status was “complicated.” The game studio’s stock peaked briefly in 2012 and subsequently declined. It took until the summer of 2020 to get back to its debut share price of US$10.

At some point, every game studio – big and small, old and new – confronts a strategic dilemma similar to that faced by Zynga: whether to latch onto an existing game platform or join a new one.3 As noted in Chapter 1, games are prototypical platform-dependent media: game publishers must choose one or more platforms on which to publish their games. Just as Facebook was going through a phase of rapid growth, the platform opened itself up to cultural producers, providing an ideal opportunity for a start-up like Zynga to break with numerous genre and business model conventions. While providing colorful and accessible gameplay to tens of millions, the company helped to conceal its business logic, namely a highly orchestrated system of “data collection, aggregation, analytics, and monetisation of player activity” (Willson & Leaver, 2015: 155). Indeed, because Facebook granted Zynga access to its Social Graph – its vast trove of user data – the game studio was among the first to adopt such an intensely formalized, data-driven approach to game design.

For news organizations, meanwhile, the decision to “join” a platform such as Facebook has been more fraught (van Dijck et al., 2018; Nielsen & Ganter, 2018). That is, given Facebook’s global reach, news organizations likely feel compelled to distribute and monetize content through the platform. Yet, joining Facebook makes them instantly dependent on the platform’s moderation practices, curating algorithms, and revenue-sharing schemes. As Facebook and other platforms frequently change these features in response to shifts in user engagement, advertiser interests, or societal concerns, it is risky for news organizations to bet their business on platforms (Myllylahti, 2018), let alone on one platform in particular. For this reason, in May 2016 many newspapers expressed frustration when Facebook launched its Instant Articles feature. To keep users immersed in the platform, this new “product” hosted newspaper articles on Facebook’s servers and displayed them in users’ News Feeds. Facebook’s pitch to news organizations was unequivocal: they would receive a share of the revenue generated from ads that appeared alongside the content. In exchange, news providers had to relinquish control as Instant Articles granted Facebook jurisdiction over advertising rates, content visibility, and access to end-user data. In this sense, Facebook’s new product threatened to replace the distribution and monetization framework of news organizations, while thwarting the latter’s attempts to recruit new subscribers. When, after years of experiments, it became clear that this new revenue stream turned out to be rather meager, news organizations quickly lost interest or withdrew altogether (Rashidian et al., 2019).

Similar to news organizations, creators in the social media industries – think of influencers, streamers, and casters – rely on various business models to earn income (Abidin, 2016; Duffy, 2017; Postigo, 2016). When it comes to reaching an audience, creators are typically dependent on one specific platform – especially when they first launch their channels or accounts. But from a business perspective, they participate in a range of income-generating strategies, including sponsorships and donations (Hou, 2019; Johnson & Woodcock, 2019). As they are not necessarily bound by the legacy of business models past, nor by the corporate complexities of multibillion-dollar media conglomerates, creators seem to enjoy a relatively high degree of institutional flexibility (i.e., the ability to work with or for other companies). We use the caveat “relatively” here because, in practice, only those creators who amass a sizeable following will be able to go off-platform when seeking out alternative sources of income. In Chapter 5, we discuss these and other forms of precarity by canvassing the way in which platform-based labor practices take shape.

For creators, the economic calculus to “get on board” with one platform or another is heavily dependent on a platform’s history, the size and composition of its userbase, and the production practices they afford (Gawer, 2020). For example, those who are inclined to stream their game sessions live tend to flock to Twitch, which was acquired by Amazon in 2014 (Taylor, 2018). The streaming platform’s users, its interface, and its myriad of monetization options – ranging from donations to subscriptions – are a good fit to stream live gameplay (Johnson & Woodcock, 2019; Partin, 2020). Similarly, as their moniker suggests, YouTubers have integrated themselves deeply in Google’s streaming ecosystem (Burgess & Green, 2018). In a business sense, this limits the agency of this specific group of entrepreneurs, as the video platform has a decidedly formalized (i.e., centralized, uniform) business model that incentivizes a rationalized mode of production (Bishop, 2020). That is to say, although the creative practices of YouTubers may be informal and diverse, their business practices are anything but. As we have seen in Chapter 1, individual creators have little say over YouTube’s business model, including advertising rates and pay-outs (Burgess & Green, 2018; Cunningham & Craig, 2019; Tomasena, 2019).

As the example of social media creators makes clear, platform markets vary widely, and relationships between platforms and complementors can change on a whim. The next section, then, examines platformization from a perspective that furnishes both a historical and a comparative context. We explore how platform companies compete in capitalist markets and how this competition, in turn, affects the ways in which they operate their own internal markets. The later sections of this chapter reflect on the challenges faced by cultural producers as they navigate the economic asymmetries, opportunities, and uneven power structures that are hallmarks of platform markets. To that end, we discuss a number of key economic concepts: network effects, pricing, and platform evolution.

Platforms and Cultural Production

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