Depressed Economy yet Vibrant Social Media: A Catch-22 Scenario?
The COVID-19 pandemic has seen entire countries going into lockdown and people spending significantly more time on social media. With online content streaming and subscription services showing unprecedented growth, has this created a catch-22 scenario with also unparalleled social consequences?
More than half of the world now uses social media. In just the last 12 months, 346 million new people have gone online, joining the approximately 4.57 billion global active users.
In 2015, the average internet user had about six social media accounts. This number has risen to eight, with users spending an average of 2 hours and 24 minutes a day multi-networking across Facebook, Instagram, Youtube, Whatsapp, WeChat, and TikTok, among others.
But growth doesn’t come without risk. Several studies have linked online social networking use to depression, anxiety, and poorer sleep quality. The platforms themselves are built to create intermittent positive reinforcement and keep users engaged for as long as possible.
Today, more than ever, users are seeking comfort and distraction amid a global crisis that impacts their ability to work and maintain personal relationships. In the context of the pandemic, is social media bringing us together or breaking us apart?
The Social Media Subscription Market
Unlike many other markets deeply affected by the circumstances, the COVID-19 pandemic has boosted the revenue of social media subscription companies. They reached an estimated worth of $64 billion in 2020, and after the market stabilizes by 2023, their growth could reach $103.7 billion at a compound annual growth rate (CAGR) of 16.8%.
Customers all around the world are choosing to watch their content when and where they prefer. This rise in digital consumption has catapulted subscription services for streaming content during the last few months. Once focused on magazines and newspapers, subscription commerce has now embraced everything from recipes and pet supplies to shaving gear and self-care products.
Social media users have skyrocketed this year, and streaming services are doing particularly well.
In 2019, The Walt Disney Company acquired 21st Century Fox for $71 billion. The investment paid off. Last month, Disney+ announced that its streaming service, launched last November, had reached 60.5 million global subscribers, surpassing its five-year streaming goal in just eight months. Hulu now has 35.5 million subscribers to its on-demand service, while ESPN+ has tripled its level from last year, reaching 8.5 million users. These numbers pale in comparison to Netflix and Amazon Prime, with 183 million (25 million added during the pandemic) and 150 million subscribers each.
At the start of July, the number of social media users has surpassed the 3.96 billion mark — that’s just under half of the world’s population. With 2.32 billion active monthly users, Facebook remains the largest platform. And although ad revenue, in general, has been falling, due to brands having to pause their ad spending during the pandemic (in particular those related to live events and sports), Twitter’s Q2 was the best in its entire history, growing 34% compared to the previous year.
Social Media, Isolation, and Depression
Several studies have demonstrated a link between the use of social media and changes in human behavior. In particular, it has been associated with negative effects on well-being such as depression and loneliness, as well as changes in social support, concentration, self-esteem, autonomy, and self-acceptance.
Teenagers and young adults who spend more time on Facebook, Instagram, and other platforms, have shown to have a substantially higher rate of reported depression than those who use the platforms less — although this correlation also seems to have a link with increased smartphone usage.
Some experts argue that the rise in depression could be explained by electronic connections being “less emotionally satisfying” than those created in face-to-face interaction. Alexandra Hamlet, a clinical psychologist at the Child Mind Institute, explains: “The less you are connected with human beings in a deep, empathic way, the less you’re really getting the benefits of a social interaction. The more superficial it is, the less likely it’s going to cause you to feel connected, which is something we all need.”
Studies have also shown a correlation between the time spent on social media and perceived social isolation. A lot of the anxiety associated with social media arises from the feeling of missing out (fear of not being connected to our social world). Social media also facilitates ‘upward social comparisons’ with artfully curated images of others, impacting self-esteem hundreds of times a day as users move from one network to the other.
Fake news and misinformation can also have an effect on mental health. Misleading content offers recontextualized and reworked information that only surfaces from encrypted apps when it explodes onto other parts of the internet. In the context of the pandemic, searching for reliable and accurate information can take users to potentially harmful advice on cures, as well as government conspiracies and anti-Asian propaganda.
The Social Dilemma
The documentary “The Social Dilemma” has recently brought some of these complex issues to light, triggering discussions that most people inside and outside the tech industry consider long overdue.
When Google began working on Inbox, the movie explained, a few dozen designers were in charge of creating an experience that would impact millions of people worldwide. However, nobody had raised concerns about how to make Inbox less addictive. This is one of the core issues in social media today, a principle (or lack of) that has shaped most of its development.
The first tech companies first made profits by selling their products. But most social media companies offer theirs for free. A television advertisement in the 1970s had stated: “If you’re not paying for the product, you are the product.”
The social media marketplace trades in human futures at scale. Everything a user does online is tracked, measured, and fed back into a system that rarely has human components.
The goal is to create models that can predict a person’s actions in order to then offer the kind of content that can keep a person watching. Engagement, growth, and advertising goals are all intertwined and powered by algorithms that get better the more behavior they observe.
These models create a particularly dangerous environment when most of the world is forced to stay home during a pandemic lockdown.
Social media is designed to engage users with constant intermittent reinforcement. When a person is tagged on a Facebook photo, the notification shown on a smartphone won’t have a thumbnail of it but instead prompt the user to engage with the platform. This design choice exploits vulnerabilities in human psychology. For every like, every heart we get on social media, our brain rewards us with a little rush of dopamine. Dopamine not only creates a feeling of pleasure, it also makes us seek it.
Social Media and the Pandemic
The lockdown that has restricted most people to their homes and the negative effects social media has been proven to have on well-being have created a perfect storm.
Due to its addictive nature, users remain in social media to feel distracted and comforted — at least in the short term. This can cause anxiety and depression, which leads to more social media use, which leads to more anxiety and depression. This spiral would be difficult to escape by itself but becomes particularly toxic when considering that these platforms are designed to work this way.
In addition to engagement and growth, social media platforms also have the goal of creating revenue through advertising. This means that on top of the vicious circle of addiction, there’s the specific targeting of users based on models of who they are, how they behave, and what products they’re most likely to buy.
During the first three months of the lockdown, unemployment in the US rose higher than it did in the two years of the Great Recession.
The level of uncertainty generated by the pandemic’s early days provided the perfect circumstances for the distribution of misinformation, a fertile ground for scammers selling everything from coronavirus kits to unsafe and unproven treatments, and unique advertising opportunities for companies to offer their products — usually coupled with fast and cheap door-to-door delivery.
The younger generations have been raised in an online culture that feeds from user observation and manipulation. About 21% of kids aged 8–11 have social media profiles, a number that quickly increases to 71% for the 12 to 15-year-olds.
Half of the world uses social media, and in times when we have to be physically separated from those we love, it can be a tether, a thread bringing us all a little closer. We’ll only be able to see the full extent of social media use during these times of crisis once we manage to leave COVID-19 behind us.
Hopefully, we’ll discover that, amid the difficulties, we’ve managed to feed the algorithms our desire to stay close to the ones we love.
This article was originally published with the title “Depressed Economy, Vibrant Social Media Revenue Numbers” (and a different featured image) in Startup Savant on October 21, 2020. Link: https://startupsavant.com/news/vibrant-social-media-numbers