Network Effects on Social Media Platforms
The success of a social media platform is largely dependent on network effects and externalities. More recently, Twitter announced that Vine, a platform for video sharing, is shutting down due to its decreasing popularity in comparison to other sites such as Facebook and Instagram. With the introduction of Facebook Live and video stories on Instagram, Vine has lost its edge against its competitors.
Social media is only as effective as the number of people who use it. For example, there is a positive externality for any given person when their friends and/or idols use a social media platform. The concept of how “the rich-get-richer” also plays a large role in a platform’s success. Twitter recognizes this phenomenon with Twitter and YouTube in particular, whose success if largely dependent on the use by celebrities such as Kim Kardashian and Donald Trump. Due to their use of the social media platforms, they are able attract a large following of their fans to use the sites as well. In turn, friends and family members of a fan’s network is also more likely to use the platform.
Therefore, it brings a question of how social media platforms to continue engage networks and continue to sustain their popularity. Over the past decade, the Internet has seen the rise and fall of other sites such as MySpace, Xanga, and Friendster. Vine has shown that its lack of uniqueness and lack of social media stars has caused the platform to reach it’s ultimate end. Even though it had a particular set of entertainers dedicated to created comedic content for the site, Vine was overshadowed by other sites such as Twitters, which heavily used by celebrities that bring a large following with them.
http://www.forbes.com/sites/stevenrosenbaum/2016/11/02/death-vine-lesson-social-media/#747ca06f1ec2