In this video, Christopher Penn discusses the new trend of public social networks and SaaS based services offering more paid services to generate revenue. He questions the companies’ motivation for moving security behind a paywall and notes that it may compromise data security for non-paying customers. The video suggests exploring alternative social media platforms like Mastodon, Slack, Telegram, and Discord, where the revenue model is clear and basic account security is built-in. The video serves as a warning to consumers to be cautious of public social media companies that are primarily focused on making money from their users.
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What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for watching the video.
In this episode, let’s talk about a different and new phenomenon that we’re seeing with public social networks and with other SAS based services.
So you may have seen recently in the in both on Facebook and on Twitter that these companies are now starting to offer more paid services or more things included with paid memberships that come across as kind of, kind of almost not scammy, but definitely poorly thought out.
So this past week, Twitter started sending notices to people who have two factor authentication turned on their accounts, saying that two factor authentication would only be available to paying members of the Twitter blue membership.
Now, if you recall, two factor authentication, which is where you have a password, and then something like a SMS message or in authenticator app or whatever, is a way for you to make your account more secure.
On the premise that even if someone compromises your password, if they don’t have the app, or they don’t have access to your your text line, they cannot access your account.
And it’s a very common place.
system of authentication is a very good system of authentication, that does dramatically improve security.
And it is ironic that the new management at Twitter would make a judgment like this study a core security feature designed to reduce fraud designed to reduce accounts being compromised and boded etc, we’ll get moved behind a paywall when said new management was talking not so long ago about the problem with bots and things on Twitter as a justification for not wanting to go through with the deal.
So clearly, this is not a a management that is used to consistency of message.
But they’re not the only ones.
This past week, Facebook announced that they were rolling out the meta verified program as well, where for $15 a month, you could get a blue checkmark on your profile, enhance security features, and so on and so forth.
And both of these platforms announcing these services.
It’s understandable why why someone would be doing this.
After all, as advertising dollars soften, which we saw in the fourth quarter on several earnings calls, these companies are naturally looking for more revenue, and what better source of revenue than to get people to pay for your services directly.
This raises an interesting challenge, though, because for the longest time, it has been something of a truism that if you are not paying you are the product, right? If you are participating on social media, you are the product that is sold to advertisers.
And now you are still the product being sold to advertisers in Twitter in its Twitter blue benefits statement says that you will see 50% fewer ads, but you will still you are still being sold to advertisers.
And of course Facebook has announced that these measures don’t improve, you know, your account performance or anything, they only for security and validation that you are you are who you say you are.
And so it now creates this interesting conflict of interest where yes, you are the product, but you are also the customer.
And it remains to be seen how widely adopted these these measures are.
When you look at another service, say like YouTube premium or YouTube premium you buy essentially no ads, you buy that so that you don’t see advertising anymore at all.
And that’s on a per account basis.
So if you happen to have, you know, several YouTube accounts, you will still see ads on your other accounts students, you have to buy it for each account if you don’t want to see ads.
Same is true for Spotify.
If you if you pay for the upgrade, you get no ads.
And so I think people will be watching in with close interests to see how many consumers choose these options.
The reduced ads or just the blue checkmark as the almost a status symbol does have some weight with some consumers, but not with all of them.
More to the point though, it is concerning from a data security perspective that a service would essentially sell something that keeps that service safer.
And when you think about it, it is inherently in that services best interest, so keep their platform secure.
But by moving security behind a paywall they are effectively saying we are okay with a certain percentage of users being less safe because they’re not paying customers.
And as a result again, it changes that balance of power to say okay, if you are not paying then you really are I sort of the the bottom of the barrel.
But even if you are paying, you are still not a premier customer, right you are still not entitled to the benefits that other paying customers on other platforms receive.
So what do we take of this? What do we make of this one? If you haven’t already, it’s probably time to look at other platforms, right look at a platform like Mastodon look at a platform.
Any of the other platforms that are being developed, that will be alternatives to the mainstream social media sites.
Look at private social media.
Go look at Slack and telegram at Discord.
Discord in particular because Discord revenue model is super clear.
Slacks revenue model is super clear, right slack charges you per seat.
There is no ads at all of any kind.
Same is true on Discord.
You pay for your nitro subscription.
But there’s no ads period you pay for nitro because you want to use more emoji and have to upload larger files.
As public social networks and many tech companies in general, start realizing that basic economics still applies to them.
And they have to make up money where they can that will naturally push consumers who are not used to paying for these things to different services where the economics are, are pretty clear.
You know what you’re getting when you buy it.
And you know that some stuff like basic account security is built right.
And in fact, I was seeing I saw the other week that for certain accounts I know on Hubspot and on Slack.
And I believe on Discord.
Now to depending on the server by server, you’re required to have to fire two factor authentication just to be able to use the service for those sensitive situations.
So the takeaway is beware of these public social media companies, right? They still have absolutely no interest in you other than how much money they can make on you.
And their lack of care and their lack of security overall, and their willingness to essentially almost blackmail here for basic account security should be a good indicator that it’s time to move on.
It’s time to move on from them and go to greener pastures where you and I as consumers are more respected.
Thanks for tuning in.
We’ll talk to you soon.
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