The current generation of platforms is on life support
When Elon Musk stepped into Twitter HQ as its new owner, he came armed with some high-brow humor in the form of a porcelain sink. The rest of the company cringed and braced themselves It was about to enter into a period of the erratic disruption associated with Musk’s brand of entrepreneurship.
In that sense, he hasn’t failed to deliver.
First, he cut over 50% of the staff. They were seemingly decided by throwing darts at employee pictures on the wall rather than by their credentials. Staff reporting they now have no idea who their managers are. The managers likely don’t know what they’re meant to be managing. Whole teams have disappeared. New features have been created in a week, which, while it sounds innovative and exciting, highlighted why features aren’t created in a week. Chaos ensued. Everything from parody accounts to misinformation to disappearing and reappearing official badges reigned free. All while the remaining Tweeps (Twitter employees) scrambled to keep the platform functioning. Even as I type this, the Twitter Blue update is now unavailable again.
It’s been a verified disaster. Musk wrote in a now-deleted tweet, “Please note that Twitter will do lots of dumb things in coming months. We will keep what works & change what doesn’t.”
And if that wasn’t hectic enough, Musk has sounded the alarm claiming that bankruptcy could be looming. He warned that unless the platform generates more revenue from subscriptions, “there’s a good chance Twitter will not survive the upcoming economic downturn.” To drive home how urgent this revenue hole is — the platform loses $4 million a day.
In sum, the man bought the platform for an inflated $44 billion after an immature 420 joke. According to him, its runway to avoid bankruptcy is only months long.
Let that sink in.
But, putting the disruption caused by new management aside, there is a much darker cloud looming over all of the social media platforms.
If you’re unfamiliar with the term, a death spiral is a crazy phenomenon where ants get turned around and end up following each other’s pheromone tracks in an endless circle until they die of exhaustion. In business, it’s a period of continuous downturn that leads to catastrophic failure or complete collapse.
And by those definitions, social media is not just entering its death spiral; it’s been circling to exhaustion for some time. Many of the pioneers have already met their end, like Myspace and Tumblr.
Across the social media landscape, things are looking bleak:
Since the pivot from Facebook to Meta, a tactic to put some separation between the company and the Facebook app — hardly a sign of confidence in the future of social media — Meta’s fall from grace has been staggering. The share price has tumbled, at one point dropping below $100 for the first time since early 2016. Investors want the company to focus back on its core apps because they still make shit tonnes of money. But Zuckerberg is forging ahead in the opposite direction. He is betting that the ship has already started to sail from social media, hence the huge gamble on building the Metaverse. He has good reason to doubt the sustainability of his once-heralded platform;
The other Meta-owned platform is doing no better. Instagram has been trying — and failing — to clone its biggest rival, TikTok, upsetting its power users. Oh, it’s also dangerous for teens, especially teenage girls, something Meta knew about and… didn’t care about. As Frances Haugen said, the company puts “astronomical profits before people.” And now that people are finding out the truth and seeing these platforms for what they are, there is only one eventuality.
Speaking of TikTok, yes, it has a killer algorithm. Yes, younger generations love it. Yes, its user growth exploded. But it’s essentially owned by the Chinese government. Many figures in the US and beyond worry about the implications. Some, like Scott Galloway, even call for it to be banned. It also loses money. Lots of money. Parent company ByteDance enjoyed operating losses of $7 billion in 2021. If the app faced restriction — or total bans — it could be enough to reduce user numbers substantially; those losses would be unsustainable.
The other major player — if we can call them that — is Snap. Which, at least in a stock sense, has been in total free-fall. Its performance consistently disappoints investors, having only made a profitable quarter once since going public in 2017. In its defense, user numbers continue to grow, but its inability to turn any profits — again hampered by ad pullback and a failure to expand product offerings — means the platform is fighting a losing battle.
The human consequences of the decline have already started.
Last week, Meta cut the jobs of 11,000 employees. Zuckerberg admitted it was his fault, but I reckon that’s little consolation. As mentioned, Twitter has fired 1000s, and Casey Newton of Platformer reported that Musk has also fired between 4000–5000 contractors. Snap had already laid off 20% of its full-time workforce in September.
It’s brutal, and it may continue into next year as the world fights recession.
And that recession will only fuel the continued drawback in advertising spending on these platforms, one of the few avenues they can actually make money from. When money was tight, or even when losses were enormous, user growth always let these platforms off the hook. But that growth is drying up, just as ad spend is too. It’s a vicious cycle.
So, if this generation of platforms is hanging on via life support, it begs the question: what would come next?
As we know, Meta thinks — and its bottom line really hopes — the future lies in the Metaverse, where social media merges with virtual reality to create an immersive digital playground, minus the legs. Apps like BeReal think it’s the polar opposite, a throwback to the Instagram days before social pressure made it unbearable to use the app. This especially appeals to the younger generations, who will be the gatekeepers for the future of social media. Though it’s also already seeing its user numbers decline. So, something else? What about undoing the hate, division and discontent stoked by social media by getting people to be nice to each other again, like the recently launched Gas?
Or maybe the next platform can actually figure out how to make social media social, and not a content mill that turns the consumer into the product?
Dream on, dreamer.
In sum, it’s a difficult question to answer. I don’t believe for a second that we will live without social media. It’s so entangled with our lives it is hard to envision how the world would function without them. While we moan about them and worry about the consequences of overusing them, humans are also fickle creatures. While we like to shout about platforms dying — see the countless cries of “I’m quitting” on Twitter — most don’t leave. Most can’t leave. And that’s what the social media overloads are counting on. It may allow them to hang on long after they’ve outstayed their welcome.
To me, the tide is too strong. I’m not sure these platform can untangle their pheromones and navigate a path to safety. Rather, it appears they will continue to spin around in an endless panic until the last one standing finally drops.
