The social media scene, so integral to hosting online discussion and the rapid spread of information (and misinformation), will likely look quite different by year’s end.
Facebook and Twitter, the two social platforms that have dominated the English-speaking world for the best part of 15 years, had a trainwreck of a year in 2022 – for quite different reasons.
Facebook owner Meta has two major problems. First, growth in its three core social media platforms, Facebook, Instagram and WhatsApp, has peaked and will likely sink into negative territory this year. Second, the company is also being financially drained by founder Mark Zuckerberg’s expensive plans to build the Metaverse, a 3D virtual world he sees as the natural end-game for social media users, but which is years away from being ready for mass adoption.
The reality is that Meta’s lock on user engagement is being slowly eaten away by nimbler competitors, notably the short video platform TikTok, which better caters to the priorities of Gen Z and millennial social media users. Still, Facebook ended the third quarter of 2022 with around two billion daily active users by its own measure, making it the world’s largest social media network.
Looking for an exit plan
Twitter’s problem is also its supposed saviour – Elon Musk.
The billionaire vastly overpaid for the loss-making platform with the US$44 billion (NZ$70.3b) acquisition he committed to in a much more favourable economic climate, so a laser focus on business fundamentals in 2023 should be his top priority. However, Musk’s chaotic approach to managing the company thus far, with erratic content moderation and flip-flopping over platform features, has alienated users, advertisers and Twitter’s remaining employees alike. Twitter ended 2022 with around 450 million monthly active users but with a growing cohort of once-loyal users looking for an exit plan.
The MySpace story is a reminder of just how quickly the dominance that Meta and Twitter enjoy can evaporate. In late 2010, before the widespread use of smartphones and much lower international broadband use, MySpace was riding high with 100 million monthly active users. But 2011 marked a seachange in its fortunes. Users plunged to 60 million early in the year and by the end of February, only 38 million people were using the website each month.
Users were flocking to up-and-coming Facebook, which offered a tool making it very easy to migrate a MySpace user profile to the platform. Within the year, MySpace had effectively collapsed and sold for US$35m, a fraction of the US$500m News Corporation had bought it for in 2005. Zuckerberg and Twitter founder Jack Dorsey studied the demise of MySpace carefully, determined not to repeat its key mistakes of being tightly focused on music and entertainment and offering a horrible, ad-cluttered user experience. But years of pent-up dissatisfaction with bad behaviour on the part of Facebook and Twitter has set the scene for a similar exodus – if fledgling rivals play their cards right.
“Today, it’s getting harder to believe that these networks will last forever,” is how Cory Doctorow, the sci-fi writer and internet commentator put it earlier this week. “In the blink of an eye, they’ve gone from unassailable eternal mountains to shifting sands that might blow away at any time. Users are scrambling to download their data and tell their friends where they can be found if (when?) the service disappears.” The ‘network effect’ which allowed Facebook and Twitter to become entrenched as they added more users, could start to work against them if much smaller networks like Mastodon can make it easier for disgruntled users to switch allegiances.
A genuine alternative
As Doctorow puts it, the early days saw Facebook and Twitter deliver a surplus of value to us as users. We weren’t bombarded with adverts, we weren’t manipulated by behaviour-mining newsfeed algorithms. But as the network effect kicked in, the real business model of social media emerged. “Because they had so many of the people that mattered to us trapped inside them, and because they made it so hard to leave, they could really treat us like garbage without risking our departure.
They cut the surplus to the bone,” writes Doctorow. Ultimately, Mastodon and its contemporaries will need to offer a genuine alternative and a better way of migrating content and user profiles, something which Facebook and Twitter are naturally unwilling to facilitate. Mastodon’s open-source protocols and advert and algorithm-free user experience have great appeal. But Mastodon is a small not-for-profit, and its decentralised system relies on a large network of volunteer administrators who are responsible for managing users and content moderation on each server in the Mastodon network.
They are like the equivalent of Wikipedia editors, giving their time to a worthy cause. That’s unlikely to work on a massive scale and Mastodon’s founder, Eugen Rochko, has said he doesn’t want to take on venture capital funding for fear of turning into “everything you hate about Twitter”. Maybe the donation-based Wikipedia model can work for social media, too. I’d certainly pay a monthly fee for an ad-free experience and to support a network committed to the users’ interests.
The TikTok question
The other big factor this year will be what happens to TikTok.
Its ownership by the Chinese company ByteDance is seen as increasingly problematic by the US government and its use by federal government workers has already been banned. The fear is that ByteDance is a massive ‘psyops’ and data-harvesting platform for the Chinese Communist party, which has tight links to every large Chinese corporation. A US ban on advertising on TikTok or an order to have the app kicked off the Google and Apple app stores, could open up the social media field dramatically in 2023. Challenging the incumbents This is all relevant to us here in Aotearoa because our social media use exclusively takes place on these networks, which we have no control over.
At least Mastodon opens up the prospect of social media communities being controlled by New Zealanders but connected to the international network of servers. We won’t necessarily see a MySpace-style implosion of the social media incumbents this year. More likely, we will witness the exponential growth of smaller rivals, just as Telegram, Signal and others have rapidly gained new users alongside WhatsApp and Facebook Messenger. But frankly, all bets are off, particularly when it comes to Twitter. Before Christmas, NZ Herald technology editor Chirs Keall asked in a LinkedIn post which Kiwi tech leader would be a good candidate to replace Musk as Twitter’s CEO.
I suggested Xero founder Rod Drury. “I’d ban you for that thought immediately,” Drury retorted in the comments, before going on to pen a compelling list of action points if he ever found himself in control of the troubled platform.
Maybe Musk should slide into Drury’s DMs …
10 things Rod Drury would do to right the Twitter ship:
1. APIs (application programming interfaces) so Twitter becomes a true platform.
2. Add a long-form, ‘click into’ product (buy Medium?) to provide enough text signals for relevant ads in the big-read product.
3. Push verification hard, and provide a filter for users to live in verified land.
4. Work harder to remove bots.
5. Small monthly fee for verification, add more premium services for more $.
6. Enterprise sentiment/brand tools.
7. $10k plus per month – features so every corporate feels compelled to pay to monitor brand.
8. Extend tag datasets for Financial Twitter [Twitter use to discuss investing].
9. Charge to post longer form video (recover cost-to-serve $). Commercial agreements with other providers to play native in stream.
10. Appoint a real board.
Originally published on BusinessDesk.
PETER GRIFFIN 