What a week on those crazy social media platforms: Meta crashed, Snapchat was smashed, and over at Twitter Elon Musk made quite a splash. For social media, it’s been a monster mash!
And here’s the newsflash: the age of social media platforms is over.
In the future, perhaps, we’ll date it to the mangled takeover of Twitter. Musk strutting into the company’s HQ, sink in hand, will become the metaphor for the fatal hubris of the Silicon Valley elite. But it’s been coming for at least a year.
Here’s a caution: on the internet, things end with not a bang but a whimper. You’re a mere Google search from finding Tumblr or even MySpace.
The media bit of the platforms will carry on, although with ever-diminishing audiences.
But the social community communication bit? That’s done. All the key platforms are trading in the social community building for the lure of attention-seeking content, doubling down on few-to-many distribution to keep their advertising revenues bumping on.
They fell into the trap of believing they could build bigger, rusted-on audiences off the content of power users and influencers than off networking family and friends. TikTok has finely tuned its algorithm to turn that insight into a business model — and the older platforms are desperately trying to catch up.
Leaked documents out of Twitter last week gave us some hard-ish data, with a report by Reuters that so-called “heavy tweeters” (a low bar of more than four or five tweets a week) are just 10% of monthly users. But they generate 90% of all tweets and — more importantly for the platform — bring the attention that delivers half of global revenues.
The social function, meanwhile, has morphed into hard-to-monetise closed messaging systems: WhatsApp, Signal, Meta Messenger, Apple’s iMessage, Zoom (which has achieved that internet marker of becoming its own verb), Slack for business communications, Discord.
The result: giant platforms are shedding the scale that social networking delivers — that you have to be on the platform because everyone else is. Part exhaustion at peak outrage, part harassment from trolls and bots, it’s the tech version of quiet quitting: your phone may be still loaded up with all those apps and accounts, but you’ll tap to open less and less often — and post, share and like even less.
Advertisers have picked their trend and, based on Meta figures, are starting to look elsewhere. How long till that tentative tip-toeing away becomes a stampede?
The market is moving fast to price in the collapse. Exhibit A: the Meta share crash after Wednesday’s report of declining revenues, the overspend on its Metaverse indulgence and an uncontrollable CEO. The share’s late-week slide took the company’s market cap to about a quarter of where it was just over a year ago.
Could be worse: the more innovative Snapchat is now priced at just over 10% of September 2021’s highs. And poor old Musk has been required to overpay by a factor of at least four to take Twitter private.
This is not just a yin to last year’s yang by Wall Street’s trader wide-boys. It’s a hard-headed assessment of where the social media platforms are in what managerial theory calls “the product life cycle”. As the influential Boston Consulting Group matrix explains it, you start as a “what-is-this-thing” question mark, evolve (if you’re lucky) into a high-growth, high-market share star, before maturing into a low-growth high-revenue cash cow — pretty much where the markets are now placing the giant platforms, having stripped the growth premium out of the share price.
The final step: as your share slides, you become a dog. Seems like the old New Yorker gag “on the internet no one knows you’re a dog” ain’t strictly true — the financial markets put plenty of effort into trying to pick that cow-to-dog transition using derivatives like shorting the stock. Right now, that’s where the smaller social media platforms like Pinterest (down over two-thirds of its 2021 peak) and Snapchat are finding themselves.
Musk is trying to paper over the cracks with rhetoric about transforming Twitter into a WeChat-style transactions app (and clipping a percentage on the way through). Maybe. Meta tried. And failed. Colour me sceptical that a controversial billionaire can layer the app with the trust it needs to pull it off.
But before we get excited at the takedown of arrogant big tech, the Musk takeover of Twitter — with his “the bird is free” rhetoric and his immediate firing of the firm’s counsel who banned Trump — suggests there’s still plenty of damage the platforms can do through amplification on the way through, with reports like the one over the weekend that usage of the n-word on the platform increased five-fold after the deal closed late last week.
It’s the increasingly hysterical right-wing media ecosystem leeching into weakened, once-more-mainstream structures. In San Francisco on the weekend, we got a glimpse to see where that ends — with a social-media radicalised attempted assassination of US Speaker Nancy Pelosi.
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