The Importance of The Network Effect to Become Mainstream – Can Mastodon Become the Next Twitter?
Mastodon’s Mascot (Source: Mastodon)
When Elon Musk took over Twitter, and let the sink in (along with a whole slew of changes), many users became concerned for the future of Twitter. Many such users began looking towards alternatives to Twitter, starting with one of the other most developed microblogging platforms, Mastodon. According to a “toot” (the Mastodon equivalent of a “tweet” or post) by Eugen Rochko, the creator of Mastodon, Mastodon gained 489 thousand new users in the days after Elon Musk took over Twitter, and has now reached over 1 million monthly active users. However, as brought up in Kendra Clark’s article “Mastodon hits 1m monthly users amid Twitter upheaval, but experts doubt brands will follow” on The Drum, Mastodon faces an advertiser problem. Unlike Twitter, Mastodon is a decentralized platform, meaning that instead of there being one Twitter where everyone interacts, there are multiple smaller communities which use Mastodon software in order to microblog in their own little community. And on top of that, Mastodon does not have paid advertising the same way that Twitter has paid advertising, so advertisers would have to be participating members of the communities they join in order to promote their brand. From the perspective of advertisers, one of the issues with needing to join multiple smaller communities instead of paying to advertise in one large community is that of the network effect.
As explained in class, the network effect is the effect where one’s value for a particular product, in this case Mastodon, is defined as the intrinsic value for the product, multiplied by how much they value the number of users already on the platform. With Mastodon, the fraction of users already on the platform is still comparatively small compared to Twitter. To make matters worse, each community is a smaller subset of the larger community, meaning that it may be harder to find a community with a large enough fraction of users such that an advertiser’s investment in this community is worthwhile.
This is all not to say that advertisers will not go through the effort of joining communities to promote their brands. In fact, it is very much possible, and the network effect accounts for this too. Since the advertiser’s value for Mastodon is determined by their intrinsic value for the product, multiplied by the number of people using the product, if they intrinsically value the product higher, then the advertiser may still find enough value in joining. For example, in the case of communities which revolve around a particular hobby which this brand caters to.
Aside from the brands, let’s not forget that the users also play a role in the size of the product. Whether or not people jump ship depends on how much value they perceive to gain from joining this nascent platform, whether that value is worth the effort of maintaining a presence on multiple platforms now, or whether it’s more worthwhile to abandon Twitter and just focus on Mastodon.
Time will tell whether enough advertisers and users see enough value in Mastodon to push it past its critical point.
Works Cited:
Clark, Kendra. “Mastodon Hits 1m Monthly Users amid Twitter Upheaval, but Experts Doubt Brands Will Follow.” The Drum, The Drum, 9 Nov. 2022, https://www.thedrum.com/news/2022/11/08/mastodon-hits-1m-monthly-users-amid-twitter-upheaval-experts-doubt-brands-will.
Rochko, Eugen. “Eugen 💀 (@Gargron@Mastodon.social).” Mastodon, 7 Nov. 2022, https://mastodon.social/@Gargron/109300967725833789.