Comment by 11thEarlOfMar | Hacker News Reader

Comment by 11thEarlOfMar | Hacker News Reader

After being in the business world for 30 years, one truism is that business relationships can only be sustained for the long term if the interests of the parties are aligned. All parties need to contribute and all parties need to benefit, and the contributions and benefits need to be commensurate all around.

Social media and their users are struggling because their (our) interests have not been aligned all along. Initially, the services grew by providing great value. They developed equity through size and usage. Interests were not aligned for the long term because they lost money quarter after quarter. Then came the day they needed to convert the equity into revenue.

At that point, the pendulum swung back the other way. The users had given up privacy and publicized their lives to the world and developed habitual (addictive?) use. The user experience deteriorated, '3rd parties' paid for access and insinuated their banners into our feeds. We've become invested in these platforms, in some cases literally by developing primary income from YouTube, Locals, OnlyFans, ...

Clearly, we still don't have aligned business interests.

How can 'Big Tech' and 5 billion Internet users align our interests for the long term?

> How can 'Big Tech' and 5 billion Internet users align our interests for the long term?

This is a fascinating question, I want to see this discussed more. I'll throw some thoughts to get a conversation started:

I would happily pay for big tech company services - if I'm worth $30 a month in advertising revenues, I'm willing to pay $30 to subscribe to the same services in exchange for privacy. I'm convinced that I'm not the only person who thinks like this. I am waiting for a product to come around and service this market.

<Shut_up_and_take_my_money.jpeg>

While I think this market is definitely there I think the problem is it's the much smaller market so a company isn't going to make a competitive set of services and intentionally alienate the other e.g. 90% of users with it by doing pay only. On the flip side it's been shown that all but a very small fraction of that 10% will use the data sale funded version of these services it's all that's offered.

So it ultimately comes down to "do we create an alternative funding model for that 1 percent of user space" which doesn't seem like much incentive vs trying to find ways to get more more out of the 99% of users.

I think the only way this changes is if that userbase grows significantly, I don't think it's simply been an overlooked/forgotten internet business model.

I suspect it's another micropayment problem. You're actually worth $0.05 in ad revenue (or something like that), but due to payment friction & billing fees you wind up paying monthly Spotify: $10 Facebook: $20 News x4 sources: $40 LinkedIn: $30 HackerNews $5 Various Forums: $50 (etc)

You get the idea- in the end you're paying incredible sums of money for a collection of services that just aren't worth all that much. A conclusion supported by the fact that your use of these services currently generates pennies a day in ad revenue.

We can see this game at play today in news, where you could easily blow $50/mo subscribing to a small selection of decent papers. It's not a big deal if you only had one subscription, but few people read only one paper- or participate in only one social network.

To make matters worse, as seen in the cable industry, paying subscribers by definition have money to spend. This means they are by definition the most valuable advertising targets, which makes the lure of advertising to your subscribers eventually impossible to resist...

> if I'm worth $30 a month in advertising revenues

Per service though, are you willing to spend $30/m each for what facebook was, for what twitter was, for what youtube was, for what reddit was, before ads took over? (that's over $100/m on 4 sm sites... now we're getting into medium, tech news sites, gmail, google search, maps, etc. And what about the people who can't afford a $300/m "internet" bill are they just cut out of this brave new world?

Excellent comment. I'd say there are at least three possible answers to the question you pose at the end of it:

1. As another commenter replied, Big Tech will have to start charging market prices for their services.

2. Big Tech will be unable to charge for their services, and the business relationship between them and their users will collapse, taking Big Tech with it.

3. The relationship between Big Tech and its customers will change from a business relationship to something else, where the truism you stated will no longer applies.

One might argue that (3) has already happened, and the "something else" is more like a manorial or totalitarian relationship, in which the interests of the users are irrelevant.

It seems clear that interests can be very aligned where users are paying for their product. It is only when services are "free" where alignment is an issue.

Free like Signal?

That's a fair comment, but a non-profit that relies on donations (as opposed to selling services to somebody other than me) strikes me as very different than Facebook et al.

It’s a viable model though. WhatsApp had only ~50 employees and already 500m users when it was purchased for ~$20B. They were already profitable on the $1/year after the first year subscription model.

Signal is approaching similar metrics (except it’s supported by a $50m endowment from Brian Acton instead of donations).

It’s easy to say that the mechanics of chat are pretty simple and a global chat service can be maintained by a roomful of engineers, but is the original algorithm-free, chronological Twitter that much more complex? It’s hard to believe there aren’t any other billionaires out there who would be willing to create an endowment securing the perpetual existence of a free social network.

Charging $1 a year like WhatsApp used to wouldn’t be such a bad idea once it got bootstrapped either, since it would make it much harder to run bot armies.

No, gratis like Facebook. Signal is a not-for-profit.

Reply on news.ycombinator.com