Internet and Digital Economics: Information goods and online communities

Digitization and virtualisation of information goods gradually moves the value of these goods from their physical layer towards the social process which generates and prepares a demand that suits them best. At the same time, ICTs (Information and Communication Technologies) are currently challenging the top-down model that channels information from producers to final consumers through the massmedia system and the retail network. On the Internet, new structures of interaction between consumers (virtual communities) are already shaping efficient ways to initiate and develop the demand for information products. This paper presents three types of virtual communities which jointly play a significant role in the emergence of a bottom-up model: (a) file-sharing communities (like Napster), that challenge the top-down editorial model; (b) experience-sharing communities (like Amazon.com), that help consumers to estimate ex ante experience goods characteristics; these communities trigger the value migration from information to meta-information; (c) knowledge sharing communities (like free software user lists), that help consumers to understand complex goods and customize them to their needs ; these epistemic communities could lead information goods designers to better apprehend the consumers' usage constraints. Virtual communities are original interaction structures: they are characterized by very weak ties or even no interpersonal relations; they centre around an information corpus, built and used by anybody for his or her own sake. The survival of these communities does not depend mainly on the altruism of the participants but rather on the structure of the corpus (the file sharing utility, the reviews, the forum or the user list, etc.). As a regulation model for final markets, virtual communities could lead to a wider variety and a greater adaptability of final goods. Classification JEL : D12, L15, L82 Information goods and online communities Michel Gensollen – May 2004

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