Prosumer
Encyclopedia
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
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...

) as a market segment
Market segment
Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function...

, whereas economists see the prosumer (producer–consumer) as having greater independence from the mainstream
Mainstream
Mainstream is, generally, the common current thought of the majority. However, the mainstream is far from cohesive; rather the concept is often considered a cultural construct....

 economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

. 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.

General meanings

  • The term was coined by futurologist Alvin Toffler
    Alvin Toffler
    Alvin Toffler is an American writer and futurist, known for his works discussing the digital revolution, communication revolution, corporate revolution and technological singularity....

     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." These advanced product features and higher prosumer expectations lend themselves to increased customizing in Toffler's product-improvement sense.
  • 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." Uncommon or sarcastic usage; "Americans are prosumers." "I'm a professional “prosumer” and shopaholic
    Shopaholic
    Shopaholic is a series of novels written by the UK author Sophie Kinsella, who also writes under her real name Madeleine Wickham. The books follow protagonist Becky Bloomwood through her adventures in shopping and life. As of September 2010, there are six books in the series. The entire series has...

    ."

Producer and consumer

Marshall McLuhan
Marshall McLuhan
Herbert Marshall McLuhan, CC was a Canadian educator, philosopher, and scholar—a professor of English literature, a literary critic, a rhetorician, and a communication theorist...

 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
The Third Wave (book)
The Third Wave is a book published in 1980 by Alvin Toffler. It is the sequel to Future Shock, published in 1970, and the second in what was originally just a trilogy that was continued with Powershift: Knowledge, Wealth and Violence at the Edge of the 21st Century in 1990...

, futurologist Alvin Toffler
Alvin Toffler
Alvin Toffler is an American writer and futurist, known for his works discussing the digital revolution, communication revolution, corporate revolution and technological singularity....

 coined the term "prosumer" when he predicted that the role of producers and consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...

s would begin to blur and merge (even though he described it in his book Future Shock from 1970). Toffler envisioned a highly saturated marketplace
Marketplace
A marketplace is the space, actual, virtual or metaphorical, in which a market operates. The term is also used in a trademark law context to denote the actual consumer environment, ie. the 'real world' in which products and services are provided and consumed.-Marketplaces and street markets:A...

 as mass production
Mass production
Mass production is the production of large amounts of standardized products, including and especially on assembly lines...

 of standardized
Standardization
Standardization is the process of developing and implementing technical standards.The goals of standardization can be to help with independence of single suppliers , compatibility, interoperability, safety, repeatability, or quality....

 products began to satisfy basic consumer demands. To continue growing profit
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...

, businesses would initiate a process of mass customization
Mass customization
Mass customization, in marketing, manufacturing, call centres and management, is the use of flexible computer-aided manufacturing systems to produce custom output...

, 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
Design
Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...

 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 architect
Architect
An architect is a person trained in the planning, design and oversight of the construction of buildings. To practice architecture means to offer or render services in connection with the design and construction of a building, or group of buildings and the space within the site surrounding the...

s 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
Revolutionary Wealth
Revolutionary Wealth is a book written by futurists Alvin Toffler and his wife Heidi Toffler, first published in 2006 by Knopf . It is a continuation of the 1980 The Third Wave, which itself is a sequel to Future Shock....

 (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
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

. Discussing some of these issues with Newt Gingrich
Newt Gingrich
Newton Leroy "Newt" Gingrich is a U.S. Republican Party politician who served as the House Minority Whip from 1989 to 1995 and as the 58th Speaker of the U.S. House of Representatives from 1995 to 1999....

 on C-Span
C-SPAN
C-SPAN , an acronym for Cable-Satellite Public Affairs Network, is an American cable television network that offers coverage of federal government proceedings and other public affairs programming via its three television channels , one radio station and a group of websites that provide streaming...

'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
Mao Zedong
Mao Zedong, also transliterated as Mao Tse-tung , and commonly referred to as Chairman Mao , was a Chinese Communist revolutionary, guerrilla warfare strategist, Marxist political philosopher, and leader of the Chinese Revolution...

.

Don Tapscott
Don Tapscott
Don Tapscott is a Canadian business executive, author, consultant and speaker, specializing in business strategy, organizational transformation and the role of technology in business and society. Tapscott is chairman of business strategy think tank New Paradigm , which he founded in 1993...

 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
George Ritzer
George Ritzer is a sociologist who studies American patterns of consumption, globalization, metatheory, and modern and postmodern social theory...

 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
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...

, recorded music, and fast food
Fast food
Fast food is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with preheated or precooked ingredients, and served to the customer in a...

 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
Diminishing returns
In economics, diminishing returns is the decrease in the marginal output of a production process as the amount of a single factor of production is increased, while the amounts of all other factors of production stay constant.The law of diminishing returns In economics, diminishing returns (also...

 from a confusing
ConFusion
ConFusion is an annual science fiction convention organized by the Stilyagi Air Corps and its parent organization, the Ann Arbor Science Fiction Association. Commonly, it is held the third weekend of January. It is the oldest science fiction convention in Michigan, a regional, general SF con...

 abundance of consumer choice is producing stress
Stress (medicine)
Stress is a term in psychology and biology, borrowed from physics and engineering and first used in the biological context in the 1930s, which has in more recent decades become commonly used in popular parlance...

 and dissatisfaction.3 Still, one key area of high-customization is taking place: highly involved hobbyists.

Professional consumer

With customization focused on leisure
Leisure
Leisure, or free time, is time spent away from business, work, and domestic chores. It is also the periods of time before or after necessary activities such as eating, sleeping and, where it is compulsory, education....

 pursuits, Toffler's initial combination has been largely supplanted by a second pair of blurring roles: that of the professional
Professional
A professional is a person who is paid to undertake a specialised set of tasks and to complete them for a fee. The traditional professions were doctors, lawyers, clergymen, and commissioned military officers. Today, the term is applied to estate agents, surveyors , environmental scientists,...

 and consumer. In particular, hobby
Hobby
A hobby is a regular activity or interest that is undertaken for pleasure, typically done during one's leisure time.- Etymology :A hobby horse is a wooden or wickerwork toy made to be ridden just like a real horse...

ists 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
    Home improvement
    Home improvement, home renovation or remodeling is the process of renovating or making additions to one's home.-Types of home improvement:...

     as illustrated by the rise of hardware
    Hardware
    Hardware is a general term for equipment such as keys, locks, hinges, latches, handles, wire, chains, plumbing supplies, tools, utensils, cutlery and machine parts. Household hardware is typically sold in hardware stores....

     stores such as Home Depot
  • cooking
    Cooking
    Cooking is the process of preparing food by use of heat. Cooking techniques and ingredients vary widely across the world, reflecting unique environmental, economic, and cultural traditions. Cooks themselves also vary widely in skill and training...

     as illustrated by creation of entirely new cable television
    Cable television
    Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...

     channels entirely dedicated to the culinary arts such as The Food Channel or Food Network
    Food Network
    Food Network is a television specialty channel that airs both one-time and recurring programs about food and cooking. Scripps Networks Interactive owns 70 percent of the network, with Tribune Company controlling the remaining 30 percent....

  • photography
    Photography
    Photography is the art, science and practice of creating durable images by recording light or other electromagnetic radiation, either electronically by means of an image sensor or chemically by means of a light-sensitive material such as photographic film...

     as illustrated by still camera
    Camera
    A camera is a device that records and stores images. These images may be still photographs or moving images such as videos or movies. The term camera comes from the camera obscura , an early mechanism for projecting images...

    s and camcorder
    Camcorder
    A camcorder is an electronic device that combines a video camera and a video recorder into one unit. Equipment manufacturers do not seem to have strict guidelines for the term usage...

    s 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 income
    Disposable income
    Disposable income is total personal income minus personal current taxes. In national accounts definitions, personal income, minus personal current taxes equals disposable personal income...

    s by some sectors of the population
  • increased leisure time, again, for some sectors of the population
  • continuously falling prices
    Deflation (economics)
    In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% . This should not be confused with disinflation, a slow-down in the inflation rate...

     of ever more advanced products (especially electronics)
  • media geared towards amateurs and hobbyists:
    • beginning in the 1980s with the advent of desktop publishing
      Desktop publishing
      Desktop publishing is the creation of documents using page layout software on a personal computer.The term has been used for publishing at all levels, from small-circulation documents such as local newsletters to books, magazines and newspapers...

      , a growing profusion of magazine
      Magazine
      Magazines, periodicals, glossies or serials are publications, generally published on a regular schedule, containing a variety of articles. They are generally financed by advertising, by a purchase price, by pre-paid magazine subscriptions, or all three...

      s to satisfy specialized interests
    • beginning in the mid-1990s with the advent of the Internet
      Internet
      The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

      , an even wider range of website
      Website
      A website, also written as Web site, web site, or simply site, is a collection of related web pages containing images, videos or other digital assets. A website is hosted on at least one web server, accessible via a network such as the Internet or a private local area network through an Internet...

      s with online forum
      Internet forum
      An Internet forum, or message board, is an online discussion site where people can hold conversations in the form of posted messages. They differ from chat rooms in that messages are at least temporarily archived...

      s 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
    • HDTV
      High-definition television
      High-definition television is video that has resolution substantially higher than that of traditional television systems . HDTV has one or two million pixels per frame, roughly five times that of SD...

      s

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
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...

 producer; thus, rather than generating higher corporate profits from value-added products, producers would, at best, be reduced to supplying lower-profit commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....

 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
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...

, automation
Automation
Automation is the use of control systems and information technologies to reduce the need for human work in the production of goods and services. In the scope of industrialization, automation is a step beyond mechanization...

, 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
    Independent Media Center
    The Independent Media Center is a global participatory network of journalists that report on political and social issues. It originated during the Seattle anti-WTO protests worldwide in 1999 and remains closely associated with the global justice movement, which criticizes neo-liberalism and its...

    ); many involved in independent media reject mass culture
    Popular culture
    Popular culture is the totality of ideas, perspectives, attitudes, memes, images and other phenomena that are deemed preferred per an informal consensus within the mainstream of a given culture, especially Western culture of the early to mid 20th century and the emerging global mainstream of the...

     generated by concentrated corporate media
    Concentration of media ownership
    Concentration of media ownership refers to a process whereby progressively fewer individuals or organizations control increasing shares of the mass 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
Self-help
Self-help, or self-improvement, is a self-guided improvement—economically, intellectually, or emotionally—often with a substantial psychological basis. There are many different self-help movements and each has its own focus, techniques, associated beliefs, proponents and in some cases, leaders...

 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",http://www.widality.com/prosumerise.pdf 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
Wikinomics
Wikinomics: How Mass Collaboration Changes Everything is a book by Don Tapscott and Anthony D. Williams, first published in December 2006. It explores how some companies in the early 21st century have used mass collaboration and open-source technology, such as wikis, to be successful...

, Don Tapscott
Don Tapscott
Don Tapscott is a Canadian business executive, author, consultant and speaker, specializing in business strategy, organizational transformation and the role of technology in business and society. Tapscott is chairman of business strategy think tank New Paradigm , which he founded in 1993...

 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.
Companies and individuals are increasingly utilizing and involving the end-user
End-user
Economics and commerce define an end user as the person who uses a product. The end user or consumer may differ from the person who purchases the product...

s 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
Lego Mindstorms
The LEGO Mindstorm series of kits contain software and hardware to create small, customizable and programmable robots. They include a programmable 'Brick' computer that controls the system, a set of modular sensors and motors, and LEGO parts from the Technics line to create the mechanical...

 allows users to download software from Lego's website so that the users can edit and update software as they wish.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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