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.

The term has also taken on multiple meanings in business and economics: the business sector sees the prosumer (professional–consumer) as a market segment, whereas economists see the prosumer (producer–consumer) as having greater independence from the mainstream economy. 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.

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.