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Explosive growth of file-sharing groups not sure sign of success, scholar says
Mark
Reutter, Business & Law Editor
217-333-1085
9/28/2006
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CHAMPAIGN, Ill. —
Online file-sharing communities have experienced explosive growth in
recent years. YouTube, started in May 2005 so that people could share
and download videos, now attracts 100 million visitors a day, while
Gnutella and Kazaa, for music sharing, are attracting users at an increasing
pace.
These sites differ from traditional chat-room and other message-based
Internet communities in two ways, according to Mu Xia, a professor of business administration at the University of Illinois at Urbana-Champaign.
“Users in these communities have no social ties before joining
the community, and there is little or no verbal communication between
users,” Xia said. What communication exists mainly comes from
users observing the activities of other users.
Such loose ties among members make the sustainability of such networks
difficult to evaluate, Xia said. For example, a poster child of the
Internet bubble, theglobe.com, boasted 9.3 million registered users
and its stock price surged by 600 percent at its initial public offering
(IPO). Within three years, the site was closed.
“Even when a community experiences growth as explosive as YouTube,
it is not clear how these communities work,” Xia said. “For
investors, valuing the long-term investment prospects of these communities
requires understanding how its members’ behaviors and interactions
affect the site.”
To study this question, Xia and colleagues Wenjing Duan from George
Washington University and Yun Huang and Andrew B. Whinston from the
University of Texas at Austin collected data from music-sharing networks
based on the Internet Relay Chat (IRC) protocol. They analyzed data
from more than 300 million individual user activities between March
2001 and May 2006.
They discovered that IRC sharing networks hosted two types of users.
“Sharers,” who provided content, had a dominant influence
on the growth of the site. “Free riders” never contributed
and are thought to negatively affect a site’s viability.
But Xia’s group found that the impact of free riders depended
on their numbers and how frequently they downloaded. The more free riders
used a site, the more likely a sharer would continue to share content.
But the more free riders download, the more likely it is that a sharer
stops sharing.
The commercial implication of these findings was that creators of online
sharing sites “should encourage all types of users to join, even
if some of them may not contribute any content,” Xia said. “The
mere existence of free riders will be a reason for potential contributors
to join. At the same time, the operator of the site should carefully
monitor free riders’ download activities and should consider imposing
an upper limit to their download volume or bandwidth.”
Xia also recommended that sharing sites provide more ways for contributors
to interact with other users. “For example, recognition of some
sort always has a positive impact on sharer retention, even if it is
as simple as adding a special mark in front of user names.”
The researchers’ working paper is titled, “Unravel the Drivers
of Online Sharing Communities: An Empirical Investigation.”
