The business model that could save — or destroy — Facebook

A long time ago, back in the internet stone age, I had an account on MySpace, which ruled the internet for a few short years. I loved it, because it gave me a lot of creative freedom: I could customize my page to make it look exactly the way I wanted. Then along came Facebook with its rigid template and destroyed MySpace.

I reluctantly joined Facebook, but recently pulled the plug on my personal profile there. Others are starting to do the same thing, sick of being exposed to toxic trolls or being banned by bots operating at the behest of one man: Facebook uber-czar Mark Zuckerberg.

Zuckerberg is one man who controls the single most influential social media company on the planet, and that’s a problem. This is why Apple and the U.S. government have both gone at him with all guns blazing.

Zuckerberg’s all about control. And he controls a majority of the company’s voting shares, so he can do pretty much what he wants. Sounds like a sweet deal, right? For him, maybe, but it’s bad news for Facebook in the long run. If he continues down this path, he won’t need Tim Cook or Joe Biden to take him down. A savvy competitor will figure out how to do it.

Because, if there’s one thing most consumers agree on, it’s that they want control themselves. That’s really how a successful business survives: by adapting and giving the people what they want. The old saying that “the customer is always right” still holds true, even if it’s often forgotten in the day of cutthroat corporatocracy.

Facebook doesn’t know how to do that. The left and the right are both pissed at Facebook for opposite reasons: The left thinks it promotes hate speech and disinformation; the right thinks it’s Big Brother, censoring material it finds too offensive. Then there are just “regular users,” who think Facebook gives a pass to the rich and powerful, while tossing ordinary folks in “Facebook jail” without a second thought.

Bottom line: Nobody likes how Facebook handles things, and a lot of people would love to change it, but they’re basically held hostage because the platform is the only one to offer access to billions of users. And one person (Zuckerberg) dictates how that platform is run. If Facebook were a country, it would be the largest dictatorship in the world.

It’s no wonder the U.S. government has sued it on the grounds that it’s an illegal monopoly.

Bundle Up

Quitting Facebook is simply not an option if you want to market a product or service to the world at large, and Facebook has integrated itself into other platforms, too. (There are games that only allow you to sign up via Facebook, for example.)

Those who want Facebook to keep a tighter rein on its content, because it behaves as a news outlet. But Facebook argues it’s not like a traditional newspaper or media company. It distributes content, rather than producing it, rather like a cable company: Think Comcast, Charter, or the Dish Network.

Which brings me to my point: Facebook isn’t like a traditional cable company, but it could become like one. And if it did, everyone would be better off.

Facebook accepts content from anyone who wants to provide it. Cable companies, by contrast, contract with specific outlets to provide content on various channels. Compare your 200- or 500-channel cable setup to the 2.7 billion Facebook content providers, and you’ll get an idea of the chasm that exists between them.

Cable is different than Facebook in another key respect, too: It gives its users a choice. You sign up for a basic package or bundle, and you can add more expansive packages, additional bundles, and premium cable channels, and streaming services for additional fees. You can then customize your TV experience to suit your needs and tastes.

The service provider is happy because it’s creating more revenue streams via different bundles and services, and the users are happy because they get to choose what they watch.

One downside for users is the proliferation of add-on services, which can prove cost-prohibitive if you purchase each one. It’s quite possible that the market for entertainment providers such as Disney+, CBS All Access, Apple+ and so forth will become oversaturated, because most of us can’t afford all of them. But for the moment, this kind of service is exploding and proving massively successful.

Imagine what might happen if Facebook adopted a model similar to this one? It could offer “Facebook Basic,” with various opt-outs at no extra charge, then offer various Facebook+ bundles for free or at a premium.

Theory in practice

Think about how this might work.

Some people love Facebook but don’t want to be bothered with messaging, so perhaps Facebook would allow you to opt out of messaging, or offer it as an add-on.

A lot of people hate the political content that has come to dominate many corners of Facebook. So your Facebook Basic plan would give you a politics-free zone, and you could add a Facebook+ politics package to express your views there, just as Fox commentators express their views on their network, not across Comcast’s hundreds of channels.

You might complain that this will drive up costs, turning Facebook from a free service into a subscriber-based operation. And you’d be right... sort of. Facebook Basic would continue to be free under my model, and you’d only pay for add-ons that you want.

Compare this to cable TV, where even the basic service comes with a fee. Sure, you can still get broadcast stations free over the airwaves in urban areas, but relatively few people do that anymore. Plus, more and more seem willing to pay for premium streaming services on top of cable, online viewing, or satellite services, so there’s definitely a market for it.

Facebook could even contract out to other providers to create new packages offering a variety of perspectives, thus insulating itself from the criticism that it’s acting like a news creator rather than a distributor.

Advertising can play a role or not, depending on subscriptions, just as on cable: You get commercials on broadcast networks and some cable channels, but not on premium services. This would allow Facebook to move away from another area of concern: invasion of privacy.

Facebook makes its money now by allowing advertisers to collect data from users and target them with ads. Some people like this: They want to see things they’re interested in. Others don’t: They want to keep their personal information personal, and distrust companies trying to target them for sales.

Again, the cable TV model proves instructive. You can choose to watch broadcast TV, and endure seemingly endless commercials, or you can focus on premium channels that you can watch commercial-free... for a price. The key word there is choice. Facebook doesn’t offer you one, and that’s all its users are asking for. Some don’t mind sharing their personal info; others do. They should have the choice whether to do so or not.

One disadvantage of this approach would be to increase the degree of media fragmentation that has led to increasingly polarized views. But in my view, that’s largely occurred already, and the advantages far outweigh the disadvantages. Political adversaries don’t listen to each other on Facebook anyway.

Advantages

So what about the advantages?

The model I’m suggesting would give users the control they seek, which is something Mark Zuckerberg’s dictatorship currently denies them. It would satisfy users who want to control their own social media experience the way they control their television viewing, and it would ease government regulators’ privacy and monopoly concerns.

Even Zuckerberg would be happy because the government heat would be off and he’d quite possibly be making even more money by following a proven economic model.

To do so, though, he’d have to give up the one thing he’s been loath to relinquish: control.

But if the government breaks up Facebook’s empire, more users start bailing, and a savvy competitor decides to adopt something like the model I’ve suggested here, Facebook could end up on the trash heap of internet history. Just like MySpace did.

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Featured photo: Mark Zuckerberg in Honolulu, 2018, by Anthony Quintano, Creative Commons 2.0.