What Would Happen If Social Networking Sites Charged
from the a-thought-experiment dept
Well, there's a problem with both Lyons' math and his crystal ball. In cases where companies have gone from free to charging, the numbers I've seen (and, yes, it does range slightly, depending on the service) the rate of uptake is usually somewhere between 0 and 1% at best. Even if we grant Facebook some credit as being a "necessity" for students, I'd be shocked if they could get 5% of people to pay up to use the service -- and they'd find that number dwindle really fast. With only 5% of people using the service, it certainly becomes a lot less useful. Rather than communicating with all your friends, you can now only communicate with the 5% who ponied up. Or, you jump ship to someone else that doesn't charge.
And that's the real issue. The second that Facebook even hinted at charging users for basic service is the second users would start moving en masse to another (very, very happy competitors would be quick to offer themselves as an alternative). I recognize that it was still back in the days when Dan Lyons hated social media and thought social networking and blogs were evil, but he might want to familiarize himself with the history of Friendster. For a while, there were all sorts of rumors that Friendster was about to start charging, and MySpace kicked off a very well coordinated "grassroots" rumor campaign about how Friendster was about to charge, and everyone should switch to MySpace before Friendster put up a paywall.
In other words, not only will a lot less than 50% of people sign up for a pure fee-based Facebook, but everyone will move elsewhere, making that the place to be (for free). That's not to say that Facebook couldn't come up with some additional offerings of value that it could charge for, but the idea of charging for the basic service is really short-sighted and easily debunked if you think through it.