Policy changes to accommodate a new generation of users
This post documents how demographics and competition shape the goals and policies of platforms by focusing on one type of platform: the social media platforms.
TL;DR: A key motivation for a digital platform to change its features and policies is to accommodate changes in its users’ characteristics. This post documents how demographics and competition shape the goals and policies of platforms by focusing on one type of platform: the social media platforms.
Table of Content
Page 1: Social Media’s Origins as the Young’s’ Place to Chill
Page 2: Who used to use social media, and who uses it now?
Page 4: What to expect in the next few years?
What to expect in the next post?
Page 1: Social Media’s Origins as the Youngins’ Place to Chill
“MY NAME KEVIN, IM ON DIS JOINT CHILLEN, LOOKIN 4 FOR YOUNGINS TO CHILL WIT OR JUS BE FRIENDS. SO IF U FEELIN ME GET AT UR BOY’’
- Kevin Durant’s Black Planet profile, 2004
Social media has been around for so long that its original users -- Millennials like Kevin Durant -- are now concerned about its effect on their parents (Baby Boomers) and their children (Zoomers and Generation Alpha). Instead of a few platforms targeting a relatively homogeneous set of internet-savvy young people, a bevy of platforms both compete and capitalize on the heterogeneity of their users, creating differentiated products in the form of subreddits, Facebook groups, pages — all to help users “find their people.’’
That is, social media platforms have evolved from being multiple singular products aimed at a particular demographic to a varied, differentiated set of products aimed at everyone. Black Planet, where Kevin Durant posted his call for youngins, predated both Facebook and Myspace, and targeted “web-savvy African-Americans”. However, with the aid of tailored feeds and algorithms, most social media platforms seek to individually serve the whole globe.
The evolution is fully expected. It is true that platforms seek to monetize their users by selling advertisers access to as many attentive eyeballs as possible. Attention is maximized when the content served to those eyeballs is as targeted, creating a clear market for a social media experience that is extremely personalized. The tension between platform-wide policies and targeted experiences poses challenges both for regulators seeking to understand the tradeoffs of social media policies and for platforms trying to survive in a competitive landscape. Although the platform experience might be tailored, however, platforms are still monolithic – policies and choices that are made to satisfy one group can have unintended consequences for another.
Page 2: Who used to use social media, and who uses it now?
Pew Research found that 71% of teens aged 13 to 17 used Facebook in 2015. Instagram (pre-merger) and Snapchat held commanding shares of the market, but the plurality of teenagers stated they used Facebook the “most often.’’ Even among teenagers, though, use wasn’t uniform – boys used Facebook more, while girls were more likely to use Instagram and Tumblr the most; younger teens (aged 13-14) in 2015 favored Instagram, while older teens (aged 15-17) used Facebook.
Meanwhile, only about 16 percent of Silent and Boomer adults (born 1964 or earlier) reported using any social media at all in 2015. Since then, however, use of Facebook has grown fastest among older generations, particularly the Silent generation, born 1945 or earlier. For these older Americans, leisure time is now dominated by screen time — even more than socializing and reading.
The Pew Research Center similarly reports that in the U.S. the plurality of Facebook users in 2015 were 18-29 years old (Kevin Durant was 27 years old in 2015) ; now, they are 65 and older. Suffice to say Facebook isn’t where Durant would go to find youngins today!
We’ve thus seen a shift in both the level and the distribution of social media use, and in particular Facebook use. In level terms, more of the population is consuming more social media; in distributional terms, the type of media consumed continues to vary significantly by individuals.
Older adults are increasing their use of the internet, and consequently social media. Younger users switch platforms frequently, with Snapchat, Instagram, and Tumblr holding their own. Older users, however, concentrate their time on Facebook, the oldest currently popular platform.
Such a shift poses a problem to a platform like Facebook. Having a high-quality, monetizable population allows a platform to grow engagement and foster communication between users. Facebook now has “ignore’’ and “unfollow’’ possibilities exactly because it is so popular that it cannot guarantee that a user will see only content they actually want. A college student signing up in 2011 might have seen only her friends’ vacation pictures – but now she might see her uncle’s political opinions and her neighbor’s new dog instead. Amplifying engagement is harder with too diverse a user base, resulting in policies that involve simply tweaks to algorithms and visibility controls – like Facebook’s controversial overweighting of the content from friends-of-friends. As documented last year in the Wall Street Journal’s Facebook Files, the attempts to stay competitive had the unintended effect of increasing a user’s exposure to polarizing, gory, or angry content.
How should a platform adapt as its user base expands to keep its attitude of exclusively and tailoring without sacrificing engagement and growth?
Page 3: Compete or Copy?
The main policy shifts in social media have taken place not because of government policy, but because of competition. Platforms in the past have made changes in response to up-and-coming competitors: Meta introduced Stories into all three of its major platforms (Facebook, Instagram, WhatsApp) after observing the success of Snapchat. More recently, we’ve seen the rise of TikTok, owned by the Chinese Company ByteDance, serving young people nearly perfectly tailored content to the point where “TikTok knows me better than I know myself’’ has itself trended on Tik Tok. As a response, Meta introduced Reels, a copycat feature, onto Instagram. Similarly, YouTube introduced Shorts as a way to attract both short video content creators and short video content consumers.
Acquisition attempts – seizing instead of copying – aren’t off the table. Indeed, Facebook’s acquisition of WhatsApp was itself driven by market research flagging WhatsApp as a startup performing “unusually well.” This was at a time when Facebook was trying really hard (in vain) to make Facebook Messenger the goto smartphone messaging platform.
So far, the competition between incumbents and newcomers to retain existing customers and accommodate new customers has been good overall for consumers.For example, YouTube shorts monetization policy reduces the bar to start earning (For Shorts, creators need lower count of subscribers and hours of videos watched before they become eligible to be accepted as a YouTube Partner). It is true that the major players remain the same, and have the power to stamp out the transformative effect of such competition going forward. Yet, it is still unclear whether platforms are increasingly taking anti-competitive moves “enough” to tighten regulatory overreach.
Most of the copy/acquire moves that platforms take are policy and feature changes to prevent platform switching. The question remains whether there is a link between within-platform policy changes and reduction in platform switching by users. But more importantly, a lot more research is needed to study the impact of policy changes (intended and unintended) on all participants of the platform.
Page 4: What to expect in the next few years?
Platforms evolve rapidly so it is hard to predict what will happen. Yet, two things are more likely to happen: Platforms will continue to grow, spanning geographics and generations. Platforms will continue to change their policies to accommodate the changing geographies and generations.
Can simply copying features of popular upstarts let the market dominators hold their positions? Perhaps, it is likely. The sheer quantity of data amassed by dominant platforms should give them a head start in any competition because of network effects. For instance, Instagram copying Instagram Stories from Snapchat had the intended effect: it was a massive hit in Instagram and resulted in a notable drop in Snapchat usage over time. That said, it is unclear if competition/copying can alone help in this era of algorithms. Copying has costs, and catch-up may be difficult for platforms if they haven’t figured out the algorithm behind the feature and because of which users don’t want to switch.
Can the dominating firm instead simply acquire, absorb the features from the startup as feature changes in the dominating platform and then quash the upstart? Perhaps, it is likely too. While we might expect the best ideas to resist acquisition, firms can also take advantage of the risk-averse nature of startup investors. A startup founder with a hit idea might find it less risky to sell to a dominant platform company than take their chances in the free market, knowing they might go up against some heavy competitors. On the other hand, entrepreneurs do tend to be a risk-seeking bunch, so the best ideas may still escape acquisition. However, this game is a bit tricky since Information Technology is in a low I.P. regime, so it is not too difficult to copy the features. We circle back to the Snapchat example here. Snapchat resisted a multi-billion dollar acquisition attempt by Meta and very soon, Facebook/Instagram released features that were Snapchat clones, harming Snapchat in the process.
Do we see a role for regulation and antitrust activity to determine whether the motive for acquisition is to quash upstart competition or some genuine synergy? Possible. Further, simply acquiring a new product variety might have unintended consequences if the data is used across the rest of the firms’ products – e.g. WhatsApp and Facebook Messenger should be treated differently because they have different user bases, but reputational concerns or privacy policy changes at the Meta level might result in spillovers across platforms. What is clear is that competition must be preserved for existing users to continue to be better served by their options.
What to expect in the next post?
Dominant social media platforms only change when innovation in the space reveals that users want some new feature or type of content – either by acquiring or copying the innovation. Unfortunately, the incentives to keep innovating in the space are not clear: while acquisition can provide innovators a less-risky exit ramp, the risk of being copied does the opposite. In the next post, we’ll discuss how what users want – from dancing videos to privacy policy – has changed over time. Is Kevin still looking for youngins? Spoiler alert: No, he’s now defending himself against haters with a secret Twitter account.
Raveesh is deeply grateful for the research and writing contributions from Amanda Mooney for this post.