What are the alternatives to today’s attention-economy platform model? Will subscriptions and paywalls prevail?
With congressional hearings and negative public opinion, pressure is mounting for social media companies to change some of their practices. Concerns range from how to regulate speech and stop the spread of misinformation, to whether and how to address antitrust issues, and how to balance data privacy and company transparency.
The business models of social media platforms like Facebook and Twitter are at the heart of the issue. In an “attention economy,” platforms are free but sell user attention to brands, governments, and non-governmental organizations, according to MIT Sloan professor Sinan Aral, Director of the MIT Initiative on the Digital Economy and host of the recent Social Media Summit @ MIT.
Business models that rely on the attention economy are effective, but pose many concerns.
“Does the attention economy inevitably lead to the spread of least common dominators, like falsity, hate, polarization, or can it be addressed to align shareholder value with society’s values?” Aral asked during the summit. Business models built on engagement and popularity often lead to divisive, emotional content, because that is what algorithms tend to favor, Aral noted. A study he co-authored found that false news online is 70% more likely to be retweeted that the truth.
In a panel discussion, Aral and other experts agreed there is no single solution that would improve existing social media business models. But public pressure and the likelihood of regulation, and even criminal penalties, might push companies to start looking at alternatives.
Changing to a subscription-based model is a potential solution that would allow businesses to own the relationship with consumers, Aral noted. It could also reduce “addiction to engagement” and reverse toxic behavior such as hate speech and spreading misinformation and disinformation. At the same time, this would reduce access to job listings and business tools, limit human connection, and might cut off access to important information for those who can’t, or won’t, subscribe.
“There is a danger that if the best, fact-checked, edited, credible, high veracity news is behind a paywall, that probably creates potentially a more dangerous bifurcation,” said Scott Galloway, a professor of marketing at New York University.
Advertising models were built on attention even before the internet existed, said Guy Kawasaki, chief evangelist at the graphic design platform Canva. He noted that that it’s hard to talk about potential inequities when it’s unclear how much social media platforms would charge for a subscription — and either way, small businesses using Facebook for things like advertising would be harmed.
Galloway, who said he doesn’t think Facebook will move to a subscription model, said social media companies could learn from Neeva, an ad-free, subscription-based search engine. The company isn’t incentivized to make money from a user’s search, but instead to direct them to the best content. Moving to this kind of model, would create a “ healthier ecosystem around search,” Galloway said.
Subscriptions are just one idea. Identity verification could filter out things like disinformation and hate speech.
Galloway noted that LinkedIn, which does not allow anonymous accounts, doesn’t have many of the problems of other social networks. On other platforms,anonymous accounts often undermine the credibility of legitimate users. Anonymity could be granted to credible people who need it for security reasons.
Models such as newsletter subscription platform Substack, in which users pay content creators, are promising but don’t address concerns like disinformation. “Just because you’re paying to follow a creator, it doesn’t mean that creator is not amplifying or disseminating problematic content,” said Hilary Mason, a data scientist and CEO and founder of Fast Forward Labs. It’s also unlikely that people will share personal content like baby photos — the draw for many social media platforms — on Substack, she said. “It seems like one option where many options are needed.”
Some suggest giving users control over their own data, and paying them to share it. “What if users owned their data, and then they were paid to give it up and be targeted with that?” Aral asked. While this puts some control back in the hands of users, people give away their data for free all the time, Mason said, and it is unlikely paying users a small fee would cause significant changes.
Mason is interested in solutions similar to MetaFilter, a community blog that charges users a $5 membership fee in order to post comments — enough to discourage bad behavior, but not enough so that it’s inaccessible. Importantly, she said, the company isn’t focused on large-scale growth, unlike many social media platforms. “It just doesn’t work when your goal as a founder is to build a monopoly and extract as much value out of that as possible,” she said.
Reconsidering monolithic platforms and breaking them down into components people value is also helpful, she said. “What it really comes down to, essentially, is that you want people to pay you for something they value.”
Voluntary business model changes are one place to start, but social media companies might eventually be required to make significant changes. Galloway said this could be spurred on by antitrust actions, regulation of social media platforms like public utilities, and taxes on companies that use algorithms to amplify content.
There should also be stiffer penalties for companies that take harmful actions, he said. “Effectively, we have decided to issue parking tickets that cost 25 cents on a meter that costs $100 every 15 minutes,” he said. “We have effectively said: ‘The smart shareholder-driven thing to do is to break the law.’” Galloway proposes criminal charges for social media executives who knowingly lie to Congress or engage in business models that lead to criminal activity, disinformation, and mental health problems.
Galloway said that social media companies should be held more accountable — like broadcast companies that often issue apologies if they’ve shared false information, or banking companies which face strict regulations and have robust, well-paid compliance departments. (Facebook recently hired a chief compliance officer.)
The panelists agreed that there is a growing bipartisan movement against social media companies in the U.S. “There is a change of tide happening, and there’s a major tech backlash,” said Rana el Kaliouby, a former MIT postdoc and CEO and founder of Affectiva. (Affectiva was recently acquired by the eye tracking company Smart Eye). “The role that consumers play can be very strong,” she said. “If consumers can say, ‘I’m going to vote with my feet. I’m going to use this platform, but not this one because this platform adheres to the highest ethical standards,’ … I think that becomes very powerful.”
IDE, MIT. “The Search for New Social Media Business Models.” MIT Initiative on the Digital Economy (blog), June 17, 2021. https://medium.com/mit-initiative-on-the-digital-economy/the-search-for-new-social-media-business-models-a8565242e022.
Now most social media businesses have attention-driven business models that have resulted in many negative outcomes. This article explores other alternatives for selling the attention and data of the users. First It explains the pros and cons of subscription. For instance, in that case, platform would not rely on their user’s attention and data and they would have their own relationships with their users and it could bring a healthier interaction. However, it is possible that huge companies would try to abuse its users in new ways, causing so many new issues that we cannot predict whether they will be less harmful than they are now.
Another important issue raised in this article is how breaking down monolithic social media platforms might reduce the impact of attention-driven business models because not a few corporations would dominate the majority of users. As a result, it would be a little simpler to implement better business models for each social media platform.
Another intriguing idea is to give users the right to sell data and information. Therefore, they would have control over it. And, once again, this would lead to some unpleasant behavior among users and businesses.