Prosumer

A prosumer is a person who consumes and produces a product. It is derived from "prosumption", a dot-com era business term meaning "production by consumers". These terms were coined in 1980 by American futurist Alvin Toffler, and were widely used by many technology writers of the time. Today it generally refers to a person using commons-based peer production.

"Prosumer" is also a trade term, used from a business perspective, for high-end electronic devices (such as digital cameras), meaning a price point between "professional" and "consumer" devices.

Definitions and origins

This blurring of the roles of consumers and producers has its origins in the cooperative self-help movements that sprang up during various economic crises e.g. the Great Depression in the 1930s.

General meanings of "prosumer" (no relationship to the business term "prosumption")

• 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." These advanced product features and higher prosumer expectations lend themselves to increased customizing in Toffler's product-improvement sense (see the next section).

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. However, in many cases architectural clients are not the only or even primary end-consumers, a distinction touched upon in the H+ Magazine essay 'Prosumption Architecture: The Decentralization of Architectural Agency as an Economic Imperative'.

Toffler has extended these and many other ideas well into the 21st-century. Along with more 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.

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.

In the digital and online world, Prosumer is used to describe today's online buyers because not only are they consumers of products, but they are able to produce their own products such as, customised handbags, jewellery with initials, jumpers with team logos etc.

In the field of renewable energy, prosumers are households or organisations which at times produce surplus fuel or energy and feed it into a national (or local) distribution network; whilst at other times (when their fuel or energy requirements outstrip their own production of it) they consume that same fuel or energy from that grid. This is widely done by households by means of PV panels on their roofs generating electricity. Such households may additionally make use of battery storage to increase their share of self-consumed PV electricity, referred to as prosumage in the literature. It is also done by businesses which produce biogas and feed it into a gas network while using gas from the same network at other times or in other places. The European Union’s Nobel Grid project, which is part of their Horizon 2020 research and innovation programme, uses the term in this way for example.

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 camcorders and still cameras that are often on 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

Toffler’s Prosumption was well described and expanded in economic terms by Philip Kotler, he saw Prosumer/Prosumption as a new challenge for marketers. Philip Kotler anticipated that people will also want to play larger role in designing certain goods and services they consume, furthermore modern computers will permit them to do it. He also described several forces that would lead to more prosumption like activities, and to more sustainable lifestyles, that topic was further developed by Tomasz Szymusiak in 2013 and 2015 in two marketing books.

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.

Prosumer from company perspective

A fourth view of the Prosumer is from the companies' perspective; that is, companies that open up their processes to the end-user, integrating them as prosumers for shared benefits. Such motivated enthusiasts can be, for instance, brought into a company's R&D. Other benefits might include strengthened customer relations and faster feedback cycles. 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 from (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.

Prosumption

In their 2006 book Wikinomics: How Mass Collaboration Changes Everything, Don Tapscott and Anthony D. Williams use the related term of prosumption (production/consumption; also coined by Toffler) to refer to the creation of products and services by the same people who will ultimately use them.

Impact and reception

Adoption

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 open source software movement creates software on their own, prime example is the successful operating system Linux which now dominates the server domain
• Fablab movement, self-fabrication capabilities especially 3d printing
• 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, open, non-profit, "consumer-to-consumer" media and cultures (see Wikipedia, Indymedia, most of Creative Commons); 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

Influence on a company's R & D budget

A fourth view of the prosumer is as one who is aware:

• the fact that the whole wealth of a company (including profits, interests, ads, wages, investments, etc. plus waste, losses, taxes, fines, etc.) comes from the retail prices paid by generations of common consumers
• in a non-(quasi-)perfect concurrence market, all prices are not equitable prices, they are influenced by some violence on wants in the strength rate between demand and supply, the difference between cost and price is the measurement of violence on wants
• the sense of existence itself of the whole economy is to serve the consumer
• retail price payers, or common consumers of the same product (or of different products sold by the same retailer company, or users of the same branch of a supplying line) can:
  • decide together as consumers
  • join, communicate, organize both locally or via the Internet, so that they can publish petitions offering the company:
    • ways to improve a product and its supply service
    • ways to help the company stop wasting its main resource, its consumers
    • how to improve the marketing (as often oligopolistic marketing is "hostile marketing", exploiting and manipulating retail price payers)
    • ways to improve positive motivations to work
  • influence the R & D spending of a company in ways which directly benefit them;

For example, a manufacturer of widgets has a customer who changes their requirements, asking that all their widgets sing. This customer is important enough that losing them would seriously hurt the company's bottom line. Based on this customer's request, the company direct a portion of its R & D budget to address this requirement. While the customer didn’t make the changes directly, they did influence the company's design requirements. This arrangement has positive effects for both parties;

for the customer

• immediate access to the new technology
• technology that meets their specific requirements

for the company

• a strengthened relationship with the customer
• a demonstration of willingness to keep their customers satisfied
• a new feature/product/service they can market to other customers

See also

• Commons-based peer production
• Creative consumer
• Read/write culture
• Cost the limit of price
• Participatory culture
• Power user
• Produsage

References

• Chen, Katherine K. "Artistic Prosumption: Cocreative Destruction at Burning Man." American Behavioral Scientist Vol. 56, No. 4 (April 2012): 570-595. [1]
• Kotler, Philip. (1986). Prosumers: A New Type of Customer. Futurist(September–October), 24-28.
• Kotler, Philip. (1986). The Prosumer Movement. A New Challenge for Marketers. Advances in Consumer Research, 13, 510-513.
• 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
• Michel, Stefan. (1997). Prosuming-Marketing. Konzeption und Anwendung. Bern; Stuttgart;Wien: Haupt.
• Nakajima, Seio. "Prosumption in Art." American Behavioral Scientist Vol. 56, No. 4 (April 2012): 550-569. [2]
• Ritzer, G. & Jurgenson, N., 2010. Production, Consumption, Prosumption. Journal of Consumer Culture, 10(1), pp. 13 –36.
• Toffler, Alvin. (1980). The third wave: The classic study of tomorrow. New York, NY: Bantam.
• Xie, Chunyan, & Bagozzi, Richard P. (2008). Trying to Prosume: Toward a Theory of Consumers as Co-Creators of Value. Journal of the Academy of Marketing Science, 36(1), 109-122.
• Szymusiak T., (2013). Social and economic benefits of Prosumption and Lead User Phenomenon in Germany - Lessons for Poland [in:] Sustainability Innovation, Research Commercialization and Sustainability Marketing, Sustainability Solutions, München. ISBN 978-83-936843-1-1
• Szymusiak T., (2015). Prosumer – Prosumption – Prosumerism, OmniScriptum GmbH & Co. KG, Düsseldorf. ISBN 978-3-639-89210-9

External links

• Turns of Phrase: Prosumer - business-oriented definitions of producer/professional and consumer
• Prometeus: the future of media - The rise of the Prosumer by a video.