Has social media reached its Big Tobacco moment?

technology, digital, digital transformation, future, future of work, business technology,

The two most profitable businesses of the 20th century were oil and tobacco. Big Oil created the largest companies, shaped geopolitics and fostered wars among nations. Big Tobacco minted profits out of an addiction, shaped culture, and made it ‘cool’ for children to smoke. For years, the tobacco majors knew that nicotine was addictive, their internal research showed that it could cause diseases far worse than mere addiction. Brazenly, they took out full page ads claiming that smoking was not a proven cause for cancer, even as they funded their own research with favourable outcomes. They created products targeted at women (Virginia Slims’ “you have come a long way, baby”) and even targeted young children with tobacco’s cool quotient. “Its executives knew about the addictive chemicals in tobacco and yet they did nothing to try and keep the product out of the hands of children,” says Representative Bill Johnson, an Ohio Republican. “They knew that if they could get children addicted early, they’d have a customer for life.” The world started unravelling for them, when an internal ‘enemy’ emerged – a whistleblower from Brown & Williamson Tobacco Corporation, who exposed the industry’s secrets, and revealed to the world what the industry always knew: smoking was addictive, and it could kill.

Now if all this is familiar to you, it is probably because you have been reading about Frances Haugen, a former product manager at Facebook, who has claimed that Facebook failed to act on internal research showing that Instagram was damaging teenagers’ mental health, and of choosing “profits over safety”. Facebook tweaked its News Feed, a product that close to two billion people see every day, to make it more attractive to advertisers, but also amplify ‘divisive content’. Inflammatory content directly contributed to repression in Myanmar, killings in Sri Lanka and India, and likely aided the January 6 th insurrection at the Capitol. Predictably, Facebook came out swinging. Mark Zuckerberg reacted that Haugen’s testimony ‘just did not make sense, was illogical and just not true’. Zuckerberg’s denials have not impressed US Congress which is now mulling strict legislation, with Representatives echoing Johnson’s comment that it is the industry’s Big Tobacco moment. Unlike tobacco, however, social media can also be a power of good. It can make connections, unite people to help others in need , spark movements against repression, help businesses and communities, and unleash the wisdom of crowds to do good. Would a global backlash throw the baby out with the bathwater?

In earlier columns in this publication, I have longed argued for the emergence of a new kind of social network – the Web 3.0 or the Decentralised Web. The World Wide Web was envisaged as a peer-to- peer network of computers where you connect and talk directly with friends. It did start this way, a federated, decentralised entity where all were deemed equal, but soon the Web started centralizing. We started living in the ‘walled gardens’ created by Google, Facebook, Amazon and others, and all our data, information and services started living in their massive clouds. I have asserted that the primary reason for this centralization is the Web’s advertising-dominated business model – it rewards network effects, the big become bigger, and the small guys fall off. It all started when Google developed AdWords, a pay-per-click, auction-based search advertising model, backed by search and monetization algorithms. Google’s revenues rocketed to $2.7bn from $87mn in three years when it went public, and in 2020 it sits at a trillion-dollar valuation. The Internet had been monetized, Web 2.0 was born, our intent, personas and desires identified with laser precision, and sold to willing advertisers. Facebook joined the party, with a different way of dipping into the same advertising honeypot.

While regulation and newer technologies will help, an alternative will not be as much driven by them but by a new business model. A Web 3.0 business model built on a different construct with a different philosophy, which promises to return the internet back to the hands of users, and. One part of the construct is to allow explicit consent over your data, an initiative aided by GDPR-like regulation coming in. The other part is that the rise of the ‘creator economy’, where the creators of the content in the networks get a portion of the revenue generated by the networks, unlike now where the platform takes them all. The advertising business model moves inexorably to a subscription driven one. The technologies it leverages are inherently decentralised and peer-to-peer technologies like blockchains, which are enabled by digital currency micro-transactions.

This revolution has started, with networks like Patreon for artists, Substack for writers, Shopify for ecommerce and Etsy for craftspeople. The big boys are recognizing this change, with YouTube and even Facebook signaling a change to this new business model, and Amazon buying Twitch, which does this in games. Even in India, 3.0 social networks like GoSocial have started gaining traction. While these are perhaps at the same stage of life as Facebook was when Zuckerberg sketched out his algorithm on this dorm wall, the Big Tobacco moment for social media will herald a revolution where the Web goes back to its benevolent democratic roots.

Subscribe To My Monthly Newsletter