Every six months or a year, a new app reignites a conversation about why people share on social media. I think it is pretty straight forward. Humans are social machines with thousands of years of evolutionary refinement. When we speak, emote or share, we each rapidly run a pretty sophisticated cost-benefit analysis of whether it is in our interest to express ourselves. If we determine that sharing is socially ROI positive—meaning it brings us some value—we share; if not, most of us keep it to ourselves.
So, the real question each time something like Snapchat, Instagram, Periscope or Meerkat arises is whether there is a new technological reality in the economics of sharing that makes the new activity ROI positive when it wasn’t previously. If some sort of economic calculus hasn’t changed, then it is hard to imagine that something that’s been tried and failed will take off.
The Cost-Benefit Analysis of Sharing
A person must overcome two fixed costs to share via social media. First, there is the technical cost of sharing: the time, thought and effort of clicking and composing. While this has dramatically fallen, it’s still non-trivial. Second, there is the cognitive load of coming up with something to share.
On the benefits side, a person who is going to share something has to generate an opinion about how much an audience will appreciate his or her content and the value the person will receive when people comment positively on it. They then need to subtract the costs of interruption and consumption they are leveling on others and the chance people will dislike their content.
Unlike calculating the immediate costs of sharing, calculating the benefits usually requires proficiency in abstraction; you have to model how a given system works and how others will feel about what they share; this is a far more sensitive calculation and needs frequent updating as platforms and norms evolve.
If you take this view of sharing, you can start to map different technologies and products to what part of the sharing equation they change, thereby making them net positive for creators. Below, I’ll apply the formula to some popular old and new services.
What Existing Services Got Right
One of the biggest shifts to the cost-benefit analysis of sharing has been mobile.
In the Web era, before the rise of mobile, the cost side of the equation was much higher. To produce or consume required getting to computers, navigating to websites and lots of typing. So the players that won were the ones that found a way to ensure that the relatively small amount of content produced could be seen as much as possible. In other words, they were the aggregators like YouTube, Twitter and Facebook. All three focused on product improvements around consolidating audiences and squeezing as much exposure as possible out of the relatively small amount of content shared.
The rise of mobile and smartphones changed the physics of sharing by dramatically lowering the cost of production and consumption. This had two effects. First, lower-quality content can still pass the threshold of being valuable, because the costs of creating and consuming it have fallen. Second, content that’s the same quality as before becomes relatively more valuable for the same reason.
This led to the rise of messaging, disappearing messages, and anonymous services that couldn’t generate enough margin-per-interaction to work in the Web. In the past, investing in sharing through the platforms may not have been worth the effort since the audience is small. But as the costs fall, the benefits don’t have to be as great.
Let’s start with the base case, messaging. Mobile phones made the return on messaging faster and gave people the ability to personalize things with more limited appeal. Stickers and emoji, which further drop production and consumption costs, create more social margin from interacting with small sets of people.
Snapchat, which is perhaps the most mobile-native sharing company to date, took the mobile messaging angle and layered photos and temporality on top. Making messages disappear removed the cognitive cost of deciding what to send. All of a sudden, Snapchat gave people explicit permission to send less considered messages and harvest the social margin from the interaction.
Instagram applied the Twitter game to a new world where photos were easier to snap than words were to write. But similarly, the best photos required as much thought as the best Tweets. Also like Twitter, Instagram’s deterministic feed showed everything to everyone. This made it easier to consume the product—all you have to do is scroll—and forced people to only share their “best” stuff they wanted everyone to see.
Apps that let you share anonymously, like Whisper and Yik Yak, are also worth mentioning. Some people find anonymity drops the cognitive burden of sharing and therefore helps people generate more content. I sometimes wonder why mainstream anonymity coincided with mobile, because it doesn’t feel like it had to. Perhaps it’s because mobile made publishing so easy that people were willing to share things they wouldn’t have if they had to get to a computer and navigate all the way to a website. Or, perhaps people didn’t want to consume this sort of content on their semi-public big screens, but were willing to on private phones.
Live Streaming Video
This all brings us back to the app category of the moment: live streaming video. Is it finally time for it to work as a form of social media, in the form of Periscope or Meerkat, or whatever might come next?
I think it might be. First, phones make consuming and producing this content feasible. But the company that wins is going to be the one that figures out the right hacks on top of the sharing economics to change the equation so the benefits outweigh the costs.
Meerkat seems to be better on temporality. Taking a page from the Snapchat playbook and ensuring content doesn’t stick around, you dramatically lower how self-conscious people are about sharing in the first place and increase people’s willingness to share. The question with this approach, of course, is whether the content is good enough that people will keep watching.
Periscope, which is owned by Twitter and was released publicly this week, seems to have a different approach. Saving videos and watching old video is a core feature of the app. This approach sacrifices using temporality to drop stage fright but maximizes the number of people who can see a stream. It seems better suited for a smaller number of quality producers looking to maximize their audience.
Meerkat follows the trend of lowering production costs as much as possible and not worrying about scale all the time. Periscope is more intellectually comparable with Twitter as a platform, which was built in an earlier era and is dominated by a small number of “head” producers.
The jury is still out, of course. And much will come down to teams and personalities and tons of other minutiae. I do believe that these services are changing the cost structures enough to be successful. But it isn’t yet clear how broad the production base will be and which producers and consumers will find it ROI positive for sharing.
Disclosure: I am an investing member in Slow Ventures, which has agreed to invest in Meerkat.