Future Of Social Media – Positive Sustainable Business Models?

In this week’s article, we conclude our two-part series on The Future of Social Media. 
In today’s article, we explore ideas around new business models and platforms for social media. Is it possible to create a more positive sustainable  business model that doesn’t just hoover up our data and sell to the highest bidder?
In last week’s article, we looked at whether social media is a force for good or bad? The evidence pointed towards lots of examples where social media was unfortunately amplifying some of our worst traits.
We had the examples of body-shaming on Instagram, and most worryingly, violence against refugees being correlated with heavy Facebook usage in Germany.
 
Jaron Lanier on How Social Media Ruins Your Life

We shared this video in last week’s article but it is a very good starting point for this week.

In the video, when Lanier explains why we should not use current social media, under its current business models, he offers a glimpse into an alternative future.
What’s wrong with current social media, he argues, is that the big platforms have been set up to operate against our interests. Their business model is about creating advertising revenues. As public companies, it is therefore their duty to try to grow this revenue as much as possible, to increase profits.
To do this, their job is to attract as many users to the platform as possible, keep them there for as long as possible, and find out as much information as possible.
This ‘portalization’ of social media, whereby social media sites become their own portals with search engines, games, and news, happens through social media platforms continually adding new features and functionality to keep users on their site.
In addition, as Lanier explains, these sites use psychology to keep people addicted to certain aspects of their platform. The developers of social media have created interactions that work on our dopamine producers in our brain, in essence to keep us hooked and coming back for more.
As shown through this study, ‘social media is a dopamine gold mine’ whereby this neurochemical receptor, known as the ‘reward molecule’ is constantly re-engaged via our posting and interactions. They trick us into feeling loved, part of a wider community, and keep us trapped with addictive actions.
Of course, this is only one side of the equation as there are many positive sides to social media, but if we take these negatives, what can new social media do to make things better?
 
Jimmy Wales on a Business Model for Social Networking

This video from way back in 2012, is interesting simply because not only is it shot in 4:3 ratio (haha!) but also because it harps back to a more innocent age of social media.

In the video, Jimmy Wales, founder of Wikipedia, alludes to how social media sites might struggle to monetize their users due to the pressure from advertising versus user experience. He mentions this specifically about why he dislikes MySpace. And yes, to our surprise, it still exists…
The interesting part for this video, though is when he talks of ‘network externalties’. This is the term he gives to the difficulty of changing social networks because that is where all your friends are. If all your friends are on Instagram, it is difficult to get them all to switch to something else.
One comment on this would be that this video belongs to a bygone era, and we’ve gone through quite a lot of sophistication and evolution in social media since. People are used to being members of lots of social media whether networks or instant messaging platforms. This has become the standard due to the ease of installing apps on cell phones.
The challenge does still remain, however, for new models of social media, how to bring over enough users to incentivize and motivate others to also jump ship?
 
Social Media Platforms Can Be Built Around Quality, Not Scale
This Harvard Business Review article by Lydia Laurenson offers a peak into some solutions, and business models for future social media platforms.
Social media companies that chase ‘vanity metrics’, like impressions and pageviews, may not be sustainable. To sustain them you are needing to scale constantly and monetize. She gives the example of a hugely creditable platform, Medium, (co-founded by Evan Williams of Twitter fame), having to lay off a number of workers in January 2017. They realized they wanted to do things differently. Rather than just chase impressions and ad revenue, they wanted to build something more sustainable based on quality.
So, what is the answer? Laurenson gives examples of social media platforms becoming more diverse, less centralized, more niche, and less focused on ad revenue. It sounds like an interesting parallel to some of the fixes postulated for unfettered capitalism… Go local, do things in smaller communities, decentralize power…
She offers the examples of smaller scale social media companies that are doing things in new and interesting ways:

Read more at Harvard Business Review
 
Social Media has no Sustainable Business Model…
As a footnote, take a look at this article that argues Facebook and and Twitter don’t have sustainable business models in the long term because people are paying less attention to ads.

“At the end of the day, when Facebook, Google, and Twitter were in their infancy, they realized that (somehow) they actually needed to make money. They started by selling ad units, showing they lacked creativity or a desire for you to succeed as an advertiser (because they don’t work). They, then, began to sell relevant content which they masqueraded as personalized messaging in how they marketed it to you. Facebook is now in a ton of a trouble for their action with respect to collecting all of this data on you when, at the end of the day, there is literally zero value to it to you as an advertiser.” – Brian Ribeck, ‘Contrarian’ Digital Marketer

Read more at Product Coalition
To finish off this series on social media, we invite you to think about the future of social media and what type of social media platform you’d be willing to be part of.
Have you recently left Facebook like many others? What kind of platform would you be willing to join instead? One with more transparency and trustworthiness? Perhaps also something more local or niche in terms of interests and outlook? 
Have you found any specific examples of platforms that are attempting social media in fresh, innovative, and ultimately more benevolent ways? Can you name any?

Related Articles from Nikolas Badminton:

Future Of Social Media – A Force for Good or Bad?

The Future of Work: The 2040 Workplace