In a "shock" (totally predictable) piece of news, Meta is introduced a fee for verification on Facebook and Instagram. whilst it is easy to think that this is a moneygrab following in the shadow of Twitter, I believe it speaks to a few different changes in the Social Platform meta.
pun intended.
Meta has been struggling to hold onto advertising revenue, which accounts for over 95% of their revenue streams, which means that it is very vulnerable to changes in the market. Some of these changes include GDPR rules in Europe, as well as adblock defaults and technologies on mobile and desktop devices. Not only this, the effectiveness of online advertising has also been brought into question and with the economy tanking and retail business suffering as consumer spending reduces, advertising gets cut.
But, there is more to it than ad revenues, as this change is largely targeted to content creators who use the platform to make a living. Because not only do they use Facebook, they are also spread across Instagram, Twitter, TikTok and the rest, and likely, all of them at some point will introduce user charges. This means that just like the streaming services, people will eventually be forced to pick and choose what they subscribe to, effectively locking them into some platforms, letting others slide.
They say that this is for increased authenticity and security, but that is actually an admission of failure to be able to adequately police the platform, something that has been brought into the light more over the last few years. Of course, they don't want to have to police it, because that is a can of worms, so this verification allows them to shirk a little of the responsibility, handing it off to the user instead.
As said, the meta is changing in regard to the digital economy, as it shifts from the centralized platforms having full control to there being more user-driven options. On top of this, users themselves are also finding more ways to monetize across platforms, often having a multipronged approach, using all available channels. This means that the platforms themselves have a problem that their influencers, are also diluting the value of the influence across multiple sources, which compete for ad revenue.
And, it also highlights another issue for these platforms, because $12 for web verification and 15 for Android and iOS (to cover their 30% fees) might not be much for some, but in many countries, that is quite a lot. Which means, verification, which comes with the added benefit of increased visibility, is out of reach. Factor in the costs of all the other subscription services people want to use and it becomes very expensive.
Granted, this is aimed at the content creators who are already earning, but what this in itself means is that the "non-professional" users will likely suffer, as their own content is driven off the platform, with advertising and influencer content taking its place. This could fundamentally change the quality of experience on the platforms, something that has already been reducing for a long time already.
2022 saw the first decrease in advertising revenue at Meta in its history, and while only slight, is likely cause for concern. There is the boost that Covid gave the tech platforms to consider however, as it is still well up on the pre-pandemic numbers.
While the world's largest companies have benefited heavily from the advertising model on the internet, it just doesn't scale long-term and turns into a race to the bottom. Not only that, it also comes with an increasingly difficult minefield to navigate, as advertisers jump on social bandwagons, like Adidas ending its business relationship with Kanye West (or whatever he is called), then realizing it is likely to cost them 1.3 billion in lost sales. Worth it?
And I think that this is going to continually be an issue going forward, where social outcry is going to drive business decisions, which is essentially something that is unwinnable - due to social platforms themselves. Because they have polarized every argument for clicks, people are now far more black and white in their thinking, which is going to affect the way they behave. Whilst this was good initially, once the platforms tied their survival to advertisers, they became enslaved by them, under the constant threat of having revenue withdrawn if the advertisers don't like what someone on a platform says.
Yes, it is possible to demonetize and ban those individuals, but the thing is that it is these types that are a drawcard for the platforms. It is just like how no one wants to watch "good news", they want to see the bad, because it makes them feel better about their lives, or gives them that sense of importance through their fear mechanisms.
It is not that there isn't room for advertising models on the internet, but it doesn't scale to the size it needs to be to support all of these very top heavy companies, which is part of the reason they are paring down their workforces heavily, with more t come. At the end of the day, something has to be produced in order to create value and most of the platforms are simply content buckets, making them reliant on what people are willing to share. If they are unable to keep the attention of creators, they will also be unable to keep the attention of users and if that happens, advertisers won't stay either.
However, the future (in my opinion) is in the move away from the centralized platforms that dictate to users, into the decentralized playgrounds that can be leveraged to support anyone. What happens is that it becomes a place of creativity and value creation, with that value going directly to the community of users, who also leverage the same mechanisms to spruik their product. It creates a far more direct link between creator and consumer, as well as generates value that can be used within the ecosystem, creating a feedback loop of value, where the creator matters, so does the consumer.
Just think, that mobile platform fee is currently about 30 HIVE a month to subscribe to in order to have a verified account - and you own nothing. Do that on Hive and at the end of the year it is 360 HIVE, plus the curation returns, plus what is actually earned. Yet, people still don't see the value in buying and owning a piece of the platform they use.
As said though,
The meta is changing.
Taraz
[ Gen1: Hive ]
