Crypto, Elon Musk, TikTok… The underside of the big bang of social networks

Elon Musk played the choirboys to explain his desire to buy back Twitter. “Defending freedom of expression”, “protecting democracy”,… his arguments were (surprisingly) polished. But there is one major one that he has kept to himself: the fact that the sector is in the process of completely reconfiguring itself. The takeover of Twitter has not yet been concluded (certain key variables of the network are still under study), but “there is a place to be taken on social networks”, assures Jean-Christophe Liaubet, partner at Fabernovel, .

What drives this plate tectonics? First, the fact that social networks are built on two big misunderstandings. The first, source of all evil, is the idea that social networks are free. At the time of their creation, it must be said that Internet users pirated films and music to their heart’s content. The idea of ​​paying for a social network is unthinkable and very “old world”. Except that everything is of course paid for in life, and if the networks do not get paid from Internet users, their data is worth gold to advertisers.

Like other platforms, Meta, ex-Facebook, has chosen to build its business model around targeted advertising. Its teams must therefore rack their brains to promote the most addictive content possible. Cute little cats are going strong, posts that anger people even more. A business model which will lead to the abuses that we know and which is now showing some signs of running out of steam.

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For the very first time in its history, Meta saw its number of users fall at the end of 2021. The indicator has since started to rise again, but the state of alert remains, in particular on the segment of young users, so precious for social networks, that Meta has all the difficulty in the world to retain. Fabernovel’s latest Gafanomics report also warned of a sharp slowdown in the group’s advertising revenue, which “is likely to persist for the next few quarters”.

The Twitch UFO is pushing a new business model

Conversely, new models are emerging for social networks, in particular the path of the “creative economy” opened up by the UFO Twitch. This platform on which everyone can film themselves live and interact with their audience has had the flair to offer fun tools to Internet users to fund the people they like. They can subscribe to their streamers favorites or buy them “virtual applause”. A model that is not perfect (part of the streamers consider the commissions taken by Twitch too heavy), but which has the merit of opening up new horizons.

The ancestral subscription concept is also making a strong comeback. “This is what Elon Musk envisions for Twitter,” said Jérôme Colin, associate director of the consulting firm Fifty-Five. If the takeover comes to an end, he intends to halve the weight of advertising in the company’s revenues and to compensate for this drop by increasing, among other things, paid subscriptions to premium options. A risky, but smart bet, because the public, tired of the abuses, is undoubtedly more inclined today to pay for a qualitative offer.

“The business models industry are becoming fragmented,” confirms Neil Mawston, executive director of Strategy Analytics. And that’s not the only upheaval in this sphere. Another “founding myth” has been shattered: the idea that platforms are only hosts, not responsible for the content that circulates (hate messages, defamation, etc.) The networks have long camped on this very practical but fallacious position, because as underlined by the deputy Bruno Studer, former rapporteur of the bill against false information of 2018, “not all content is presented in the same way by social networks, their algorithms highlight some more than others. It is obviously an editorialization that does not say its name”.

And this has a huge influence on the global discussion. An example ? The Covid misinformation that has flooded the web actually comes from a ridiculously small number of people (in the US, 65% came from 12 accounts, according to the Center for Countering Digital Hate). Faced with the seriousness of the stakes, social networks are finally beginning to assume their responsibilities. Politicians leave them, it is true, less and less choice. The Europeans agreed in April on a historic text, the Digital Service Act, which will impose a serious cleaning on the platforms. This could nevertheless be beneficial to them: Internet users too often confronted with harassment on a service have – logically – a tendency to move away from it.

The dreadful puzzle of moderation

The subject is nonetheless a dreadful headache for social networks, whose decisions, poorly understood, often trigger the ire of Internet users. “All my friends on the left ‘woke’ are convinced that social media protects a white supremacist and misogynistic patriarchy, and have plenty of examples of where the platforms have unfairly deleted their posts […]. All my friends on the right are convinced that social networks are sold to a woke agenda – Black Lives Matter – Marxist – LGBTQ”, joked Yishan Wong, the former CEO of the popular social network Reddit last April.

A tense climate that favors the emergence of services, such as Gettr, which proudly claim to let their users say everything, to the delight of the American far right. The historical players, for their part, doubtless regret not having looked seriously at these Cornelian issues sooner. They will now have to tackle it with more vigor, while they must simultaneously focus on two major technological breakthroughs that are emerging in the sector.

The first is the blockchain, which has made a sensational entry into the financial sphere. Even if the sector is currently experiencing a difficult time, cryptocurrencies and NFTs open up the prospect of new, more decentralized social networks where Internet users could monetize their content themselves (videos, photos, etc.), each hold a small piece of ownership of the service and collectively decide on its operating rules. “The main contribution of decentralized social networks is the removal of opaque user profiling techniques aimed at advertisers”, summarizes Hugo Bordet of Adan, the Association for the Development of Digital Assets.

Historical players are watching this bubbling of ideas with as much interest as concern, because what is called Web3 actually calls their entire model into question. They are therefore experimenting with it timidly (Instagram is testing NFTs in the United States) to see how to take advantage of it without sawing off the branch on which they are comfortably seated. The other shift taking shape in the sector is that of the metaverse which “will move from a flat 2D experience to a much richer 3D world”, explains Neil Mawston. Mark Zuckerberg’s group invests fortunes in it and strengthened its equipment in 2014 by buying Oculus. The metaverse war is far from won for him, however.

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Social media has, of course, always been quicksand (China’s TikTok surprised everyone by upending the virtual monopoly of American networks around the world). But, in the metaverse, competition will come from entirely new fronts: the sphere of tech builders and the world of video games. To succeed in the metaverse, it will indeed require three levers: a large community of users, helmets and glasses allowing successful immersion, and the ability to create captivating virtual environments. A hardware pro like Microsoft who gets their hands on the community of an Activision Blizzard and the expertise of its developers in artificial worlds is therefore enough to give Zuckerberg a cold sweat. Without forgetting Apple which is in ambush and will soon draw its virtual reality headset. The game of turning everything upside down in social networks has only just begun.


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Chronic

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