I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
Paying to Play
This past week something very interesting happened in the world of social media and it’s probably not what you’re thinking.
It has nothing to do with the latest celebrity coupling or uncoupling, MeToo scandal, or ‘people behaving badly’ viral video.
It’s actually something far more insidious.
The dawn of paid social media access.
Just a few weeks ago the hot mess that is the owner of X (formerly Twitter), Elon Musk, floated the idea of charging all users a monthly fee to keep using the platform.
A few weeks later, TikTok said it would rollout a beta of a $4.99 per month ad-free subscription.
Following closely behind that news, Meta proposed its own $14 per month subscription for an ad-free experience in Europe on its two largest platforms, Facebook and Instagram.
The social media universe is taking a note from streaming services and they’re all scrambling to figure out a revenue model that will continue to deliver increased profits.
Why is this happening now?
My guess is that it has something to do with:
- A crackdown on data privacy, especially in the EU,
- The high cost of some serious bad PR and threats of government regulation (or outright bans),
- The explosion of influencer marketing and the creator economy on paid advertising revenue.
So, what does all this mean for your business?
- Brand Engagement
This could significantly affect how and which segments of your audience interact with your brand. It's likely that preferential treatment will be given to content produced by paying members over 'free loaders.'
- Organic Reach
With paywalls in place, organic reach will likely decrease, making it harder to connect with your audience(s) without investing in advertising and/or paid subscriptions.
- Advertising Costs & Effectiveness
With a smaller audience exposed to advertising, the competition for fewer eyeballs may drive up costs while limiting overall impact.
- Social Media Strategy
With limited resources, you will have to make strategic decisions about which platforms warrant your paid patronage via subscription and/or advertising dollars. You'll also need to more closely monitor all the usual metrics to ensure you're investing wisely as paywalls become the norm.
With the high cost of living and belt-tightening still very much hot topics around the world, it's a strange time for social media companies (and streamers) to be making changes that further strain customer budgets and force tough decisions about where and on what we spend our 'disposable' income.
And yet, Netflix saw a net increase in subscribers and profits after it stopped allowing password sharing earlier this year, so maybe they know what they're doing.
Regardless, the new age of paid social media is upon us and social savvy businesses will already be figuring out their counter moves so they don't lose any ground as these changes roll out.
Need some help figuring out your next move? I'm here for you.
Until next time,
PS - If you missed it, last week I was Saving for a Rainy Day.
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I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
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