Reverse Network Effects in Social Media
Link: https://www.wired.com/insights/2014/03/reverse-network-effects-todays-social-networks-can-fail-grow-larger/
Network effects can be key for internet startups looking for fast and large scale growth. On sites like Facebook, LinkedIn, and Youtube the value for the user increases as the number of users does. As online networks continue to grow they can seem almost fail proof but there are also plenty of questions as to how sustainable they are and if they are becoming too large to be useful. To understand how the continued growth of social media will affect the platforms we must understand the value of network effect and how factors could reverse these effects.
As we have covered in class there is a strong correlation between scale and value when looking a products with network effect. The greater the scale of the product (for social media users or user created content) the greater value for the user. This in turn attracts more users leading to a greater value and so on. This cycle can lead to rapid growth once the network event catches on. On social media specifically value can be created through content, connection, and clout. A network with greater scale can provide value in these forms in that a large network will have more prospective connections for users, a larger field of relevant content, and access to a larger follower base which can lead to recognition (clout).
We would expect that at the network continues to grow so does the value but as social media networks grow the value can also drop for users for the same reasons. If too many users join the network it can lower the quality of interactions across the network creating too much noise. The network can fail to manage or curate the growing amount of content and fail to properly personalize it for users. Finally, the network can accidentally bias early users and not give late joiners the same opportunity for clout. All these possible causes of reverse network effect should cause concern for social media platforms the are currently benefitting from rapid growth.