Adapt or die
It’s been a rough few months for Social Media companies.
Starting with the U.S. capital riots in January, which ultimately lead to former President Donald Trump being permanently banned from most Social Media platforms, barely a week has passed without some other issue coming to the forefront that has brough bad press for the giants in the field.
So far, the companies have mostly weathered the storm. That’s because we as a society we are addicted to our favourite Social Media platforms.
They’re like junk food for most people – you know it’s probably bad for you, but you can’t help but grab that bag of chips after a long day. You’ll be doom scrolling Twitter while you eat the chips too.
So, the value of the legacy Social Media companies remains high – Facebook (NASDAQ:FB) closed near a 52-week high yesterday at $131.02 USD. Twitter (NYSE:TWTR), meanwhile, hit its $80.75 52-week high mark on March 1 and is only slightly down from that now at $71.22.
So far bulletproof, right?
It would seem so. But, that’s not to say that they should be complacent. The real value in Social Media companies is their users. They need to always attract and maintain them to remain relevant. No one is looking to invest in MySpace, right?
If you are younger than 30 and reading this, MySpace was a very popular Social Media site in the early 2000s and the fact that I need to explain that tells you all you need to know about it now. It became a non-factor because it lost its users who, at the time, flocked to Facebook. Facebook had its ear to the ground then and understood what users wanted. MySpace remained true to its original Internet 1.0 design and concept and all-but died as a result.
As I’ve written before, Facebook seems to be falling trap to similar problems now. It is no longer relevant to many younger users and if that trend continues you shouldn’t expect it to stay on top much longer. The company attempted to address this demographic problem with the purchase of Instagram in 2012.
The Social Media landscape moves fast, however, and what was youthful and cool 9 years ago is starting to show its age a bit now too. Instagram remains popular, but it needs to be more agile to stay that way.
One direct threat it’s facing right now comes from its struggles to get a handle on how to deal with racist postings, particularly in the football world.
Last week, Swansea City’s Jamal Lowe had one of his Instagram posts targeted by a user who responded with the monkey symbol (Lowe is black). That’s par for the course of late, where black players are routinely exposed to racist language and symbols by fans.
This time, however, the club and the player pushed back and are boycotting the Social Media platform (and Twitter, where they faced similar issues) for a week. In isolation that’s not going to do much – Swansea City just isn’t big enough to matter on their own) — but if the football world collectively were to remove themselves from the platform in solidarity then they might start to have a problem on their hands. And, we are starting to see calls for teams and players to do just that. In one example, legendary former player Thierry Henry removed himself from Social Media altogether earlier that year. If more players and teams do the same, it stands to reason that their fans will leave with them.
As stated, this could be a problem.
You see, studies have shown that close to 25% of Social Media users are on the platform to follow their favorite sports teams and players. So, the sports world has power here. And the sports world is clearly telling the companies that they want this issue dealt with.
If the Social Media giants want to remain on top they had best listen. In isolation, it’s not going to end the challenges that they face to maintain users, but it would be a good indication that they have learned some lessons that will allow them to remain relevant.