The Business Case for Social Network Subscriptions

Social Network Subscriptions

By Avtar Ram Singh, {grow} Contributing Columnist

For the last few years, there’s been continuous discussion around the negative effects of using a social network.

Perhaps this conversation first kicked off in 2012 when an article surfaced on Psychology Today, with research about the regular dopamine hits users of a social network get from interactions on platforms like Facebook.

Since then, many posts and videos have roamed the web covering this phenomenon, complete with animations, illustrations, and ominous music. They were widely shared and caused a great amount of conversation … on social networks.

In spite of these conversations and coverage, the use of social media has accelerated.

We are however, at a crossroads.

The social network of today is vastly different from what social networks will look like in a decade, and in my view, there will be one key difference.

We will pay to use social networks in the future.

The idea itself isn’t new, but in light of recent events — it’s newly relevant. I had this thought right after listening to the Marketing Companion Podcast’s episode – Is Facebook Evil?

And here are a few reasons that lead me to believe we will pay for social networks … and why social network subscriptions are not necessarily a bad idea.

1. The Spread of Misinformation

Estimates state that close to 126 million Americans were exposed to Russia-linked election content that tried to influence the 2016 American Presidential election.

Perhaps this is the first time the general public has come to terms with the significant societal effect a social network can have on the conscious and sub-conscious decisions we make on a day-to-day basis.

Social Network Subscriptions

This corruption of the political system and manipulation has made a negative impact on society and people’s perception of the role social networks play in our lives.

The most telling, was Facebook’s Founding President Sean Parker’s incredibly candid interview on the topic.

One thing is clear; for today’s social networks, the user is the product and the advertiser is the customer.

2. Today’s Social Networks Thrive on Daily Active Users

If you ask anyone about the greatest success metric of a social network – they’ll tell you that it’s either daily active users (DAUs), or average revenue per user (ARPU).

But is the role of a social network to gather as many people on it as possible on a daily basis? Or how much money it makes off every user?

Perhaps as a business – yes.

Social Network Subscriptions

The core success metric of a social network however, has to be something along the lines of the number of connections people have been able to make on it, or the conversations they’ve been able to have with their friends.

Something true to its core value – why people sign up in the first place.

Has a social network ever mentioned how much closer it got friends together?

As social networks continue to strive for a higher DAU number, the smartest technologists on the planet are going to focus on one objective – to get us addicted to the social network they work for.

The social networks we’re currently using focus on baiting us to continue to use the network, and don’t focus on enabling us to make better connections with our network.

3. The Control of Information

The highest authority that social networks answer to are governments. While in some cases such as in Thailand, where Facebook blocked pages that violated local laws, Facebook has also blocked content from a Pulitzer prize-winning journalist, who documented an expose on the corruption of Malta’s Prime Minister.

Is this in the interest of users?

You can make arguments for and against both cases, but there’s a major takeaway. There’s very little transparency around what gets blocked and why, and whether social networks today have the best interests of their users at heart, or those of governments.

4. Their Business is Data

Social networks make money off of our data. The more they have of it, the better. The goal for social networks is to get us to take as many actions on a social network itself, in order to capture as many data points about us as possible.

Social networks are amongst the least trusted in the world, when it comes to personal data misuse.

That’s one of the key reasons why Facebook is trying to get people to buy products, order food, and watch TV shows and movies – all from within the Facebook ecosystem.

Transitioning from a company that “connects people,” to one that actually harvests data — that’s a massive challenge. The only way a social network’s business grows, is if its data-points about its userbase grows as well.

In fact, Facebook’s investment in original content is said to be in the region of a billion dollars next year. While this doesn’t hold a candle to the amount Netflix spends, it’s still a large amount, and a strong indicator of Facebook’s intent to keep people on the platform.

Their recent deal with Universal Music, seems to be one of the first nascent steps Facebook is taking into becoming the multimedia platform of choice for the world – movies and music combined. Could this evolve into a far more solid entertainment service… perhaps backed by a subscription model?

What will the social network of the future look like?

Looking at just the above points, here’s a possible scenario:

  1. Social networks have to start positioning users as customers, and not as products
  2. The DAU and ARPU metrics are solid from a business point of view, but make more sense if it’s a subscription based service, like Netflix or Spotify
  3. Social networks need to have the best interests of their users at heart, and not those of governments, or advertisers
  4. A social network’s business should not be data, it should be connecting people

Imagine if a social network popped up that allowed you to pay $10-$12/month, and made the following promises to you:

  1. They’ll never serve you ads
  2. They won’t share any of your data with a third-party, ever
  3. Their content regulation and censorship rules will always be 100% transparent
  4. The data they gather on you will only be used to serve you relevant organic content
  5. You have micro-control over websites, people and keywords that you see content about
  6. A radical one: No brands or companies will be allowed on the platform

It’ll Take a Lot Before this Happens

This idea of paying to use a network isn’t new. App.net tried out a pay-to-use model for a social network, and after years of struggle – it didn’t pan out.

I believe they were ahead of their time.

The discontent with social networks wasn’t as high as it is today as it was in 2012, and over the course of the next few years – there are only going to be more issues with censorship, data-sharing and privacy that crop up, as more users flock to the platforms and educate themselves on how they truly work, and what the potential negative effects are.

In light of all that’s happened, and the direction in which social networks are going, would you choose to pay the $10 or $12 per month for a network that promised the above?

avtar-profileAvtar Ram Singh is the Head of Strategy at FALCON Agency, a performance-led, business results oriented marketing agency that operates in South East Asia. He’s built marketing strategies and performance frameworks for brands on global and regional levels, across a variety of industries. You can find him on LinkedIn, and Twitter.

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