London, UK - 03 17 2019: Social media icons printed and placed on computer keyboard applications ... [+]
It’s time to admit that most social media companies have not been able to solve their peskiest problem. Namely, how to rely less on advertisers for revenue.
One example of this is how rampant bots have been on X (formerly Twitter) and how bots inhibit revenue growth. Studies from a few years ago estimated that as many as 15% of all Twitter accounts were nameless and faceless bots. Last year, a new report estimated the number as closer to 20% of all accounts.
The problem, of course, is that no one knows for sure. What we do know is that bots don’t have a credit card, and they inflate the perception of any social media network’s vitality. They are dead accounts and they do not buy products. When Elon Musk almost bowed out of the Twitter deal a year ago, it was due to the proliferation of bots and fake accounts and how that stalled revenue. He was right, it seems.
Meanwhile, his company has floundered over the last year. A recent report found the company has lost millions of users — almost 12% since a year ago. In the attention economy, losing users is the same thing as losing revenue.
Bots don’t sign up for subscriptions, and that seems to be the trend lately as a way to deal with the crisis. Musk recently announced a new tier structure for premium accounts, including one plan where you don't have to look at any ads. We might have to live with the fact that social media subscriptions are here to stay.
Will it work? I’m not sure if Elon Musk himself knows the answer to that question.
Meanwhile, Meta is also still considering a subscription plan for Facebook in Europe. That change has more to do with EU regulations than bots, but it also points to a troubling trend related to forcing users to pay for the privilege of using social media (In truth, Meta has not been struggling lately. Revenue has gone up, and the company has rebounded considerably from the dire reports they faced a year ago.)
Still, we will all have to ask ourselves if these apps are worth a subscription fee. While Facebook has rebounded considerably, there’s still the question of how long the company can sustain their advertiser model and when it will start to fail again. X is a good example of what can happen. The user base has shrunk and the bot problem has not been resolved. Meta doesn’t have to look far to see what happens when a social media company starts losing users right and left.
Part of the reason X has faltered has to do with the ungated atmosphere. In my own scrolling lately, I’ve noticed how the feed is a cluttered, confusing, and unfiltered mess. While TikTok can show me videos based on my micro-interactions and instantly adjust to my tastes (sometimes based on mere moments of idle behavior or sustained focus) and Facebook does roughly the same thing with their sponsored content, X is just a random firehose of content.
The core issue with subscriptions is that social media firms need to provide more value before they start charging us. Subscriptions force us to answer the question of value, and so far — at least for me and most of my friends and family — there’s no way we’re going to pay for X’s mindless barrage.
