Could the End of Free Come To Social Media?

social media, Twitter, Facebook, GoogleTwitter pulled a cute April Fool’s joke back on April 1st of this year. The joke was that there would be two tiers of service. The free level would remove all vowels and the paid level would include the vowels. While this was good for a laugh, another post caught my eye that asked some interesting questions. Justin Fox asked if users would want to be paid for their contributions and could the major social media sites continue to provide a free platform for the majority of users.

A little background

It’s worth reading Justin Fox’s post, How Long Will You Be Willing To Tweet For Free?. While he wrote about a bet between Nicholas Carr and Yonchai Benkler as his starting point, his focus was on how the big social media sites like Twitter, Facebook and Google could keep offering a free platform for user-generated content (peer production). Curiously, he ties in research on The Prisoner’s Dilemma in which two individuals are told they can earn money if they cooperate but get nothing if they do not cooperate. Fox makes the connection that people will engage in peer-production as long as they perceive they are getting value.

The value for users

The magic or attraction of social media sites lies in the varied content that is created by the users, the peer production. This means you can find something about pie making, gaming or even social media because someone is posting relevant content. For businesses, large and small, have a vehicle to broadcast their message, drive sales and engage with their customers. And it’s for free! You can’t get that with advertising on television or print media.

We have also seen the major social media sites explore various revenue sources such as targeted pay-per-click advertisements, paying for increased visibility of your posts and other options. There seems to be a desire on the part of the social media sites to keep their users happy while trying to find ways to provide actual monetary value to their shareholders. Some of these have been hit or miss, including turning off some users so they cancel their accounts.

An emerging tension

At the end of his post, Fox notes that all of the larger social media sites are heavily involved with Wall Street. The question here is how long can Twitter, Facebook and Google balance providing their free platforms with the demands of shareholders and investors. There is another tension coming from users who are evaluating the return on investment they are getting given the time commitment, level of engagement and ability to broadcast and self-promote. Fox points out a concern that if users perceive the value as failing them, they will abandon the social media sites.

Being paid for contributions or remaining committed to peer production

This is an awkward dilemma. There are many users who are on Twitter, Facebook or Google who use the sites for personal reasons. They may be producing content but it’s not for monetary gain. On the other hand, small businesses and multi-national corporations use the sites for visibility and broadcasting. They might see value in becoming a sort of paid staff when they provide content. After all, finding new ways to increase revenues is certainly a part of business.

The value received from participating on these sites is not necessarily based on monetary gain. There has been some research done on how it effects people. It seems that social media provides a great deal of gratification including activating parts of our brains that interprets rewards. A “like”, “retweet” or positive votes can make us feel very positive.

What is the greatest value that the major social media sites provide?

What sort of mindset is needed to account for the social media site business model(s)?

How would it change your participation if you knew user-generated content was recompensed?

How would it change your participation if you were the one being paid to generate content?

How do you see the major social media sites manage the demand they increase revenues and create profits without losing their “magic”?

About the author:  Elli St.George Godfrey, founder of Ability Success Growth, small business coach and executive coach, is the host of KaizenBiz. I’m passionate about business becoming a more human-centered place so I host this chat to connect business ideas and develop people.This passion shows up in my work with my clients. Whether you are expanding locally or internationally, Ability Success Growth guides established small business owners and executives to unlock the CEO within during times of transition and growth.


2 thoughts on “Could the End of Free Come To Social Media?

  1. The only think not covered her is that sites are using advertising more and more. As a matter of fact, Twitter’s ad platform used to be only available to big corporations with deep pockets, but for a while now they had been testing a more accessible version of this targeted to smaller businesses. They just launched this to everyone just last week.

    We’ll have to see if smaller businesses give it a try and if the ads get too intrusive and if people complain. The quandary may be do you wan to pay, or see more ads, or see the service go away.

  2. While the benefit derived from user generated content for the content host is clear, the benefit to the contributor is less direct. There are various theories behind the motivation for contributing user generated content, ranging from altruistic [1] , to social, to materialistic. Due to the high value of user generated content, many sites use incentives to encourage their generation. These incentives can be generally categorized into implicit incentives and explicit incentives.

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