Controversy sells. For a long time, there has been no place where this is more true than on social media platforms like Twitter and Facebook. Controversy and conflict keep you clicking, commenting, and generating the data about yourself that is used to sell ads. Every day, it becomes more obvious that the intertwined model of conflict, privacy violations, and ad revenue is unsustainable for the companies that own and operate these networks. It’s a lesson that Twitter should be learning as it finds itself deeply exposed and at risk of collapse. While Elon Musk’s flirtation with a subscription-based revenue model is part of the solution, he’s missing the point.
Technology and social media companies that have a subscription model create products and services for the benefit of the subscriber. It’s not surprising that privacy is one of the benefits that most people expect. Those privacy concerns have pushed Apple and policymakers to restrict how social media companies track and use users’ data. While Meta, Twitter, and Snap have cut thousands of jobs and Meta has lost two-thirds of its value, platforms that don’t rely on user data to sell ads can protect user privacy without threatening their core businesses.
When platforms embrace a subscription model, they are no longer incentivized to function as purveyors of conflict and merchants of controversy. It is no coincidence that for the past few years the common social media experience is “doom-scrolling” while our blood pressure steadily rises. Many of us remember a time when we went online to explore our interests with a community of like-minded people. This is an experience that companies can offer when the interests of subscribers, rather than those of advertisers, are the focal point of product design.
So, if subscription-based revenue models offer a path forward for social media companies, why is Elon Musk flailing and failing so publicly as Twitter dabbles in a mix of ads and subscriptions? It’s hard to put your subscribers first when you don’t respect their privacy and continue to serve the same noisy conflict they’ve grown weary of. It also turns out that advertisers and users have limited tolerance for a platform and a CEO so desperately attempting to be the centre of controversy and attention.
The social media landscape is facing the most significant disruptions we’ve seen in its almost 20-year history. We are going to see radical changes in the business models of big social media companies in 2023. As social media companies face increasing challenges with the ad revenue business model, we expect to see more companies making decisions that keep users happy, including value-driven subscription models, decentralization, and more robust privacy policies. Otherwise, they will continue to see the pain they saw in 2022.
Jeffrey Scott Edell is the CEO of the social network MeWe and the former chairman of MySpace.