Paid vs. Free Social Networks

StrategyApril 4th, 2013

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Thanks to the likes of Twitter, Facebook and MySpace we’re all well and truly familiar with the concept of ad-supported social networking sites. It would appear that we don’t mind the fact that we are the product and the advertiser is the customer, as long as the quality of service that we’re given compensates. Recently, I’ve seen some people ask, “when did our privacy become so cheap?” The fact of the matter is our privacy has always been cheap.

If you’ve ever filled in a survey, questionnaire or entered a competition, chances are that you’ve been giving your details away to market researchers or inadvertently signing up to some lovely direct mail. This has been happening since way back in the days when paper was king. The only difference now is that it all happens much faster.

These days you can give marketers/researchers insights without knowing you’re doing it, and can be served advertising relevant to your interests before you hear the “k” in your mouse click.
We all seem so surprised when Facebook releases a new update that appears to favor the advertiser rather than the user. This is rather odd, as why shouldn’t it improve its service for its customers?

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Let the User Become the Customer

Perhaps there’s another way. New kid on the block has an option where it charges users for the social networking services it provides, upgrading them from the limited functionality of the free version. For $35 per year, the user has the ability to communicate with friends, share photos, form groups and do all the other basic things you would expect to be able to do on a social networking site. According to founder, Dalton Caldwell, a paid service aligns their incentives economically with users and developers. In his original pitch video, Dalton says “If we’re selling a service, our customers are users and our job is to make our users happy. If we have a free, ad-supported service, our customers are advertisers and our job is to make advertisers happy.”

Join the Movement at from AppDotNet on Vimeo.
I used a Facebook poll to try to gauge whether users would be prepared to pay for Facebook. The responses were 6:1 no to yes. Although not exactly a piece of meaty research, this does give us an indication as to what people are thinking. Or does it? If a patent recently filed in the name of Mark Zuckerberg is anything to go by, Facebook seems to think its users might want to pay for profile customization.

It could also be the case that Facebook is just filing this patent to prevent other social networks from doing this. Obviously this is just conjecture, but the times might be a changin’ for the conventional ad-supported model of social networking.

The Futurism Bit

In the next couple of years, we could start seeing a change that will mean paying for a social networking service becoming the norm. Ad-supported networks tend to come and go, being dependent not only on user interest but also advertiser interest. Paid services tend to have a bit more stability about them, quite often garnering a more dedicated and passionate user base. I for one am fed up with investing time and energy into networks that will ultimately fail. Being a serial early adopter, that’s most of them. If I pay for a service I feel like I have more control, and with my rights as a consumer comes the vendor’s responsibility to me. Isn’t that better than a service that can have its plug pulled at any time?

Perhaps 10 years from now, we’ll pay social networking bills in the same way we currently pay telephone bills. Perhaps 10 years from now they will be the same thing.
Lee Stacey on Google+.