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The commercialisation of our social lives

November 19, 2012

A long time ago, part of every week for me was spent helping put together the community newspaper. In many markets, these kinds of newspapers are still called ‘Advertisers’ due to their solely advertising funded business models.

I’d help bring in the ads, and then we’d have to figure out a way each week to cram all those ads into the next week’s edition while still allowing the Editor to create something that the community would find worth reading.

The only problem with that was in order to keep a reasonable and practical rein on the cost of a freely delivered newspaper (which was distributed to 120,000+ homes), we’d have to fill about 60% and sometimes 80% of the paper with advertising. Not the most compelling read for those who were purely interested in community issues (and not paid advertising), but something we’ve all become accustomed to over time. For the reader, advertising was simply the price you had to pay to access the information about your community freely, and in an accessible way (ie delivered to your home).

Digital platforms and the advent of online communities, therefore, were an enormous opportunity for the producers of content to provide value to their communities without the same burden of cost. That is to say – it was CHEAP to build your own website, or start an online community on any number of social and or community networking websites, and to focus purely on the content and issues that mattered to enrolled members. The cost of distributing content was no longer a big deal, and content creators and readers alike rejoiced.

Eventually, blogging and social networking platforms gave the entire connected world the opportunity to be a completely private publisher. Through platforms like MySpace, eBlogger, WordPress and later – Facebook, we could now create our own communities where we connected only to the people we chose to – and we could share content that was meaningful to only those people, without any burden of cost other than time to produce.  Now, every person on the planet with access to the Internet could publish content without financial cost.

As with all occasions like this, you can see a rather large BUT just over the horizon, can’t you? In this case, that BUT materialises as the cost of scale in technology. On a planet where 2/3 of the population are yet to access the Internet this is nothing to sniff at, and anyone who had a good look at the inside of Google’s data centres recently would realise just the tip of what’s involved in maintaining these kinds of services.

So nothing good in this life, they say, comes for free. Until now, the price to the consumer of using services like Facebook was that you had to share your usage data with them (among other things). The price of using digital services like Amazon, iTunes or Apple TV is that you don’t actually own the ebooks, movies, or music  that you ‘purchase’ from them – you’re just renting the digital rights.

Now however, inflated investment deals like Facebook’s now infamous $100 billion IPO (currently value sitting at just 40% of that), MySpace’s inflated acquisition at $580 million in 2006, and a string of  small-cap startup acquisitions mean that shareholders drive quality consumer platforms to focus on revenue raising products over the various elements of user interactivity, design, and utility that made them worthwhile in the first place.  Mark Zuckerberg himself stated before going to IPO that:

Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.”

Since that IPO, our private online communities – our social network – has become more cluttered with brand messages, advertising, ‘sponsored stories’, and other forms of paid messages – than ever before, as the company struggles to meet shareholder expectations of revenues. In August, they announced a US$1 billion downgrade to 2012 revenue forecasts and were subsequently hit by news just 3 months later that their entire mobile revenue strategy is in doubt due to a pending class action in the United States that would, if successful, give consumers the option to switch off sponsored stories on their mobile news feed – the main source of revenue within Facebook’s mobile plan.

And while Facebook is the obvious target due to its popularity, the key issues of commercialisation are replicated elsewhere – Facebook is going through the same pain of commercialisation that MySpace went through (we all remember how that worked out for them), as with most if not every technology startup that begins with a dream of creating consumer value as a ‘pull’ strategy and ends with a ‘push’ commercialisation in order to return value to shareholders.

So the cycle continues – with the current state of Facebook, we now choose to lead our online social lives with a heavy dose of brand messages thrown in at the mercy and whim of Facebook engineers – or we don’t lead an online social life at all. Eventually a challenger brand or product will rise – personally, I use the Path social network to cut out the clutter and to create a more intimate online social network, but I know that it too, will eventually face the harsh realities of commercialisation.

Although we’ve come a long way from our days of depending on the community newspaper with 60-80% ad content, ultimately the business of  owning a publishing and communication platform – in any form –  will always face the same realities that have always existed.

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