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> ... social media and instant messaging giants of the world are incentivised to prefer the captive user over the paying user. What's the incentive though? Tha

> ... social media and instant messaging giants of the world are incentivised to prefer the captive user over the paying user. What's the incentive though? That approximately zero user would ever pay for a social media or messaging app? I think they simply have no other viable business model whatsoever.

strogonoff 6y ago
I don’t think people are any less willing to pay for social media than they are for their phone and it’s time we recognized that. The largest player in social wants to normalize free service and lock-in: this way its users can come but can hardly leave, competition is impossible since no one can undercut it on price, and its leverage with the advertiser approaches infinity. Now, the moment big social is legally obligated to enable feature-complete third-party clients to exist so that users can easily switch social service providers, a company will pop up and say “we don’t make money from advertising; we’re very transparent about all our records; we provide a full API so you can keep using your favourite client app; our subscription starts at $X”. You can count that this new provider will tear out a chunk of WhatsApp’s user base. The next day yet another provider pops up and advertises cheaper subscriptions at $X/2, further eating away at Facebook’s advertising power. FB understands that the earlier it revamps its business model, the more revenue it can generate from actually paying users; so it revises the ToS, adds paid tiers to its services and becomes very good at upselling them.
- goatinaboat 6y ago
  FB understands that the earlier it revamps its business model, the more revenue it can generate from actually paying users Facebook will exploit paying users even more, since a demonstrable willingness to pay makes you a more valuable set of eyeballs for advertising. That’s the fly in the ointment.
  - strogonoff 6y ago
    They would either be legally liable, or must reflect this in ToS—benefitting the next provider with simpler ToS. And remember, they would pretty much lose the ability to show ads (where mined data is used for targeting), since getting rid of them becomes as easy as switching to another client.
Seirdy 6y ago
[Am author] The best alternative is not to need a business model for anything besides sponsoring development; there shouldn't be a single organization that needs a large sum of money to keep a platform alive. From the article: > Not all software needs to rake in billions. Federation allows services and networks like the Fediverse and XMPP to scale up to large numbers of users without forcing a single behemoth to sell its soul to foot the bill. Although anti-domestication business models are less profitable, they still allow the creation of the same technologies that were enabled by user domestication. All that’s missing is an advertising budget; the biggest advertising some of these projects get is long unpaid blog posts. Instead of building a platform that requires one actor to scale up to millions of users, build a platform that's simple enough for it to require less development effort and scale to only a few hundred/thousand users per federated server. Delegate hosting to the 0.05% of users willing and technical enough to run a server. The Fediverse has scaled to millions of users with a grand total of $0.00 VC money. Related: when people first envisioned the ideas that led to networks like the Web, sceptics would ask questions such as "Who's going to pay to make all those hyperlinks? What's the financial incentive to upload a document?" If a system is designed right, there doesn't need to be a financial incentive (i.e., an ROI) to grow.

strogonoff 6y ago

I don’t think people are any less willing to pay for social media than they are for their phone and it’s time we recognized that. The largest player in social wants to normalize free service and lock-in: this way its users can come but can hardly leave, competition is impossible since no one can undercut it on price, and its leverage with the advertiser approaches infinity. Now, the moment big social is legally obligated to enable feature-complete third-party clients to exist so that users can easily switch social service providers, a company will pop up and say “we don’t make money from advertising; we’re very transparent about all our records; we provide a full API so you can keep using your favourite client app; our subscription starts at $X”. You can count that this new provider will tear out a chunk of WhatsApp’s user base. The next day yet another provider pops up and advertises cheaper subscriptions at $X/2, further eating away at Facebook’s advertising power. FB understands that the earlier it revamps its business model, the more revenue it can generate from actually paying users; so it revises the ToS, adds paid tiers to its services and becomes very good at upselling them.

goatinaboat 6y ago
FB understands that the earlier it revamps its business model, the more revenue it can generate from actually paying users Facebook will exploit paying users even more, since a demonstrable willingness to pay makes you a more valuable set of eyeballs for advertising. That’s the fly in the ointment.
- strogonoff 6y ago
  They would either be legally liable, or must reflect this in ToS—benefitting the next provider with simpler ToS. And remember, they would pretty much lose the ability to show ads (where mined data is used for targeting), since getting rid of them becomes as easy as switching to another client.

Seirdy 6y ago

[Am author] The best alternative is not to need a business model for anything besides sponsoring development; there shouldn't be a single organization that needs a large sum of money to keep a platform alive. From the article: > Not all software needs to rake in billions. Federation allows services and networks like the Fediverse and XMPP to scale up to large numbers of users without forcing a single behemoth to sell its soul to foot the bill. Although anti-domestication business models are less profitable, they still allow the creation of the same technologies that were enabled by user domestication. All that’s missing is an advertising budget; the biggest advertising some of these projects get is long unpaid blog posts. Instead of building a platform that requires one actor to scale up to millions of users, build a platform that's simple enough for it to require less development effort and scale to only a few hundred/thousand users per federated server. Delegate hosting to the 0.05% of users willing and technical enough to run a server. The Fediverse has scaled to millions of users with a grand total of $0.00 VC money. Related: when people first envisioned the ideas that led to networks like the Web, sceptics would ask questions such as "Who's going to pay to make all those hyperlinks? What's the financial incentive to upload a document?" If a system is designed right, there doesn't need to be a financial incentive (i.e., an ROI) to grow.