Social media feeding frenzy
Five years ago, social media seemed blessed with an infinite growth curve. By feasting on the festering yet still fresh corpse of old media, Facebook, Twitter, LinkedIn, YouTube and others grew dramatically each year – exponentially in many cases. There was room at the table for everyone, as attention spans and “hours spent” were siphoned off newspapers, TV, magazines and other old media, like Las Vegas sucking precious drinking water from the Colorado River.
Unfortunately, all good feeding frenzies come to an end. As the easy pickings were gnawed off traditional media, social media growth curves started flattening. Facebook began adding millions instead of tens of millions of users each month. Twitter growth stalled. LinkedIn started having trouble getting users to return regularly. An ugly truth dawned on the world of social media wonks: the party was over, and the war for eyeballs had begun.
Everyone who wasn’t high from huffing E Ink knew social media as a category couldn’t grow forever, if only because of one very simple truth: the amount of available human attention is limited. Buzzfeed articles (“You won’t believe what happens next once this dog realizes it can sniff its own butt!”) might distract you. Facebook’s algorithms might get better at persuading you to spend more time reading your friends’ updates. But by and large, tempting you with linkbait or improving algorithms produces marginal results, and picking at the margins means modest growth at best.
What huffing E Ink may produce….
At this point, the feeding frenzy turns into cannibalism as it shifts to a zero-sum game. When the pickings were easy (thanks to newspapers’ inability to change or magazines’ death grip on a defunct revenue model) players could enter the market at will and share in the feast. Now that all but marginal market share has been carved off these old media, social media have to compete with each other and not with a group of sclerotic old media that last innovated when Roosevelt was in power. So Instagram and Snapchat enter the fray, and MAUs (monthly active users) in the 18-24 demographic plummet on Facebook and Twitter. Twitter retaliates by signing a deal with Google to place tweets in search. LinkedIn sees its growth threatened and opens up its publishing platform to kick content production into overdrive.
Predictably, not everyone can survive. Friendster was a famous first casualty, followed by MySpace not long after. These two owe their decline as much to their inability to innovate or to crappy interface design as much as anything, but their decline shows the fickleness of the social media world. If you want to see who’s next, look to the fortunes of Flipboard, Hipstamatic, RebelMouse and Storify, to name a few. Each of these were once a social media darling, promising unique user experiences and value propositions. None of them have achieved runaway success, and some have become also-rans. Snapchat’s Story and Discover functions undermine Storify and RebelMouse’s model. Instagram body-checked Hipstamatic into the stands. Flipboard doesn’t offer anything you can’t get in the latest version of the Facebook timeline (or even an RSS reader, when you think about it).
Ultimately, this tightening of the market will lead to a change in how social media start-ups are funded. The days when anyone with a hot concept could wander into Santa Clara and come out with a wad of $100s clenched in their teeth are probably coming to a close. Investors will see the increase in failure rate of start-ups in this space (due to the competition described above) and realize that something’s changed.
The other big change will be in the way networks report usage and growth. MAUs will be replaced with ROI and net revenue metrics. Investors with any kind of brain activity will eventually realize that anyone can produce MAUs out of the gate simply through the novelty of the offering and a fat dose of marketing. However, sustaining traffic – or, indeed, getting someone to visit regularly as opposed to the minimum once a month required to achieve a MAU – is damnably hard on account of the fact that you actually have to add value to a user’s life if you want them to use your service regularly. That ability to add value, more than anything, will determine the success of any new networks.
It’s safe to assume no one’s going to discover some previously undiscovered source of attention span, so newcomers to the social media game are going to have to bite attention off an existing network as the feeding frenzy continues.
