“I get bored of Instagram within a minute, but I can watch TikToks for hours.” This is a phrase that I heard from at least three friends on three separate occasions in the last month. While TikTok continued to gain traction, everyone around me (including myself) also embarked on the BeReal train. Today, Meta will begin its mass layoffs. Elon Musk, the richest man in the world, finally bought Twitter. Media outlets have been reporting financial trouble in the world’s biggest technology companies for weeks now. Are all these different facts coincidentally happening around the same time, or is the social media and big tech scenario in for a big change?
To start off with, this is the financial trouble big techs are facing right now: Google reported a big decline in profits; Microsoft predicted a slowdown until at least the end of the year; Amazon is hiring fewer employees, putting off plans to open facilities and pulling out of leases; Meta’s profit in the last quarter was over 50% less than the same period last year. That’s only to list some. A major reason for all these issues is a global economic downturn involving inflation, rising interest rates, and a slowdown in spending – especially when compared to the unprecedented boom that these companies saw during the pandemic. However, other important factors should also be taken into account. For Meta and Snap (Snapchat’s parent company), for instance, Apple’s new privacy policy introduced changes that made their ad-reliant business model suffer.
One should definitely not see this as a certain decline of the “traditional” big techs, because they continue to make a lot of money – granted, less than before, but they still earn dozens of billions of dollars. However, the chances of a gloomy future for these companies should not be overlooked. Perhaps, for instance, the business model that depends on digital advertising, and consequently on user data, does not work in today’s scenario where markets and governments attempt to better regulate the usage of said data. The question is: what happens next? Maybe this is where Elon Musk comes in. The aforementioned issues in the big tech world created a gap in the industry, and thus an opportunity for the richest man in the world to become even richer by filling it in.
There is also a likely social layer to all these changes. The rise of BeReal is an indication of reversal on the user’s side – seeing fabricated and modified content on Instagram might not be making people happy (or addicted) anymore. Although the app is too new to compare in relative terms of financial return, the social tendencies seem to show people’s interest in something different than what “traditional” social media has to offer. As the name of BeReal implies, people are seeking an app that is reliant on less curated and “staged” content. Simultaneously, the rise of TikTok indicates that content consumption, rather than content creation, is what users currently seek.
The issues are all happening in American companies, which doesn’t surprise anyone considering they dominate the big tech game. What is interesting to note, however, is that those on the rise are not American – namely TikTok, owned by the Chinese ByteDance, and BeReal, founded by French developers. Therefore, perhaps the change to come will be a strengthening of the position of companies outside the U.S. (e.g. a decline of Silicon Valley).
Although there is currently a lot happening in this sector, the possibilities of what will happen next are endless, one of which is that nothing changes. There might be a big shift in the big tech and social media world in the coming years, and what that change will be is hard to predict right now – as interesting as it is to analyze the possibilities. It is also possible that the current tech giants are just going through a tough patch (as is the whole world’s economy), will eventually recover, and everything will go back to normal in a couple of months or years. Although that is conceivable from a business perspective, it seems unlikely from a social one. In the midst of so much unpredictability, one thing is certain: what we as users want from social media today is not what they have been offering for the past couple of years.
Featured image by: AAA Inovação
