In an internet age that has become ever more socially-saturated, devising and delivering something that offers true differentiation is becoming increasingly hard. ‘Pheed’ is the latest social network to launch and whilst the platform itself doesn’t appear to offer anything ‘new’ per se, its business approach is tapping into an increasingly more visible model: paid-for content.
Cited by some commentators as the ‘new Twitter’ (a fact that has allegedly seen Twitter revoke people’s ability to sign into Pheed using Twitter credentials), Pheed offers users the usual range of updates, photos, streams etc. that have become de rigeur for social network platforms. On Pheed however, users have the ability to charge people to subscribe to their ‘pheeds’.
Of course, no-one in their right minds would pay hard-earned money to listen to my inane mutterings (there goes my retirement plan), but celebrities? Public figures? Content producers? Pheed differentiates itself from the opposition by establishing itself as a monetised platform with a business model right from the beginning.
Of course, this will raise the question of whether celebrities actually want to engage and share content with their fans, or use ‘social media’ as a tool through which to ‘sell’ their brand and generate profit from their fans. Whether you choose to pay to subscribe to David Guetta ($4.99 pcm) or Chris Brown ($2.99) is a matter of personal preference. But in a world that grows more digital by the day, is this a glimpse of the future?
On July 2nd, News International introduced a paywall for the online editions of The Times and The Sunday Times: a bold move that many claimed would fail. Would people pay for news that they could get for free elsewhere? The figures can be interpreted in different ways: whilst The Times Online saw figures to its online homepage decline from 21 million to 2.7 million in the first three months after the paywall was introduced, this still showed that 2.7 million of these pageviews were from paying customers.
Spotify – a brand and platform that I love dearly – launched as a free, legal platform to stream music, supported by advertising. Yet this model alone was not enough to support the business, which was posting huge losses. The introduction of a tiered, paid-for subscription model, was floated to generate more revenue for the company. But would consumers pay for content that they could feasibly get for free elsewhere? Again, the answer appeared to be yes: as of August 2012, Spotify had 4 million paying subscribers, generating a revenue of €20 million per month.
Even as recently as a few years ago, digital was seen as a ‘free extension of print and physical media’. But as more and more content producers look to digitise their offerings (The 80-year old US magazine ‘Newsweek’ will cease print publication in December this year ), revenue models have to change.
Netflix? LoveFilm? iPad editions of magazines? Over the past 18 months, consumers have reacted positively to premium and paid-for content; yet until now, this has been entrenched outside of social media and firmly within ‘digital media’. So will Pheed change this? And if so, what are the ramifications for the big players?
Although Facebook claims it will never charge for access to its site, could it? Would you pay a small subscription fee to access Facebook or Twitter each month? There has been a lot of criticism of Facebook’s recent ramping-up of its advertising activity. Would a subscription model offer consumers a different experience? Could social networks become paid-for, media platforms rather than ad-supported channels? And if so, what does this mean for brands?
Pheed raises some interesting questions. Is it ‘the new Twitter’? Time will tell. But even in its infancy as a social media platform, Pheed has got noticed for addressing an area that arguably, Twitter (lack of monetisation) and Facebook (consumer apathy at ad overload) are struggling with.
Are subscriptions the future of social media?