as social media evolves, new business and technology models may be required

Enterprise IT Lead Generation Services
Fuel Your Pipeline. Close More Deals. Our full-service marketing programs deliver sales-ready leads. 100% Satisfaction Guarantee! Learn more.

The social media model has come under increased scrutiny following revelations of data misuse and news of executives reneging on some security commitments. People expecting to change the situation will need to address how social media works.

This means changing not just the business model, which describes how a social media business makes money, but the fundamental technology model too.

The Business Model

You can trace some of social’s troubles to the free use and advertising business model. Leveraging it, the social media companies have developed businesses dependent on easily collecting, dredging through, and analyzing user data. They then sell their insights to vendors eager to approach the public with enticing offers.

Users more or less sign away rights to their data stored on social media systems in return for free use. However, promises made by some social media companies to maintain data privacy have been blithely ignored, even by the businesses that first made the promises.

Free use and advertising are a potent combination that gives social vendors ample amounts of data to leverage. Much has been written about how social applications were used as designed to stir up strong passions during elections, and how unscrupulous parties used social platforms to target specific voter groups.

Social media’s troubles were baked in at conception, both in the business and technology models. It’s doubtful that the situation will improve until social vendors change approaches, starting with these models. That will be difficult, because the current business and technology models are very lucrative.

Still, what would new models actually look like if they’re not based on selling insights into huge numbers of users’ data, like the current ones? The most likely models, which also have some issues to address, likely would be some form of subscription coupled with a more targeted approach to the way users communicate, which I’ll call a “notification model” (see below).

Subscriptions: Back to the Future

We’re all accustomed to subscriptions, and some articles refer to the “Subscription Economy” when dealing with car leases, cellphones, shaving supplies and pet food, plus a lot more. However, moving from a model that’s free to the user — whatever you call it — to one that requires even a modest payment would require a heavy lift by the vendor community. Luckily, the history of the software industry shows that instituting a payment model, while challenging, can be done.

Back in the 1980s, PC software was considered a separate thing from software that ran on mainframe computers produced by big companies. PC developers were considered hobbyists, and their claims to copyrights were ignored consistently.

On the other hand, many felt they were releasing applications to community members with similar interests who might, over time, help to improve their products and release those improvements back to the community.

That model was unsustainable, though. As more people joined the PC revolution, fewer of them knew how to code. They needed help with bugs or just to understand how a given app worked. With little revenue for the developer, there was little or no documentation, and virtually no one to call for help.

Bill Gates, cofounder and CEO of Microsoft, had a different vision. He promoted the idea of PC software licensing. Gates was right, but early. He could charge for a diskette containing his operating system, MS-DOS, but initially he couldn’t do much about someone copying the diskette and simply distributing it to friends. The same was true for PC applications, though it was at least possible to ration service to users who had unique serial numbers.

It would take years for software to reach a point where developers could be certain that they were receiving what was due. Eventually, key codes, cloud computing, and other approaches made it virtually impossible to steal access to applications. So, over time and with changes in business and technology models, software became secure and profitable.

If this worked with PC software, something similar could work to make social media safer and more profitable, beyond using the free use and advertising model. For instance, schemes are already available to support different user types.

Family plans first deployed in the cellphone industry could cover kids and others not able to pay for use. Why not in social media? A free service could still exist, though its functionality might be limited — such as the number of connections a free user could make. Many downloadable apps for mobile devices operate this…