Social Media is it worth it

Recently, Twitter’s share price fell 23% following announcements that the take-up of new accounts had slowed down, and engagement with the social network had dropped. The social network makes huge losses year on year which investors happily overlook while more users are caught in the network’s dragnet. The hope is that they will find a way to monetise the service but if use of the service is in decline, and the trend suggests it is (ever so slightly) the investors run scared.

Given the prevailing wisdom that all software should be free, I wonder how Twitter can make more money for its investors – if they can't hope to get its users to pay for its services. Of course saying that social media is free is a delusion and one that all users subconsciously are happy to subscribe too. After all, we know that these services aren't really free; they let us natter over peer to peer networks, while they mine our personal information for advertising revenue.

While users consciously decry their information being sold-on without their explicit permission, they are also happy to implicitly give their permission for it to be used by logging on for free, knowing as they click-in that their information will be exploited by the service; exploited in ever expanding ways if these companies are ever to make up their losses and provide a real return on their investment.

So what value do we place on social media services, and what value do we place on our personal information?

It would appear that we place a low value on our personal information because, it would seem, we don't value the social media services enough to want to pay for them – so the hidden cost of selling our personal information must mean less to us than whatever annual fee we fear might be levied.

Put another way: many people say they would stop using Facebook or Twitter if they required an upfront fee. So, they’re not worth actual money – so our personal information must mean less to us than money because we will tacitly exchange that for the service.

I suspect that a fee would turn off users less than it would the vendors, as a fee would probably generate less revenue than advertising solicits. Yet, it would be a more honest transaction – pay for the software that enables the services, as that’s the real commodity these companies offer you. It’s a different proposition viewed from the providers’ side, where the users are their commodity and corporations are their real customers.

If social media giants got paid only to provide users with peer-to-peer gossip sharing software they'd not be super-rich. They'd maybe have fewer users too, as a few would keep to their threat and cease to logon. I wouldn't overstate the user drop-off, though, as it’s like a crack addiction, I doubt the buzz wears off after the free sample runs out.

Would it not be better to pay for the service and keep your personal information private, doing away with the pretence that you were ever getting something for nothing?