The Decibel - Facebook, Meta and the future of social media

Episode Date: October 11, 2022

The company that owns Facebook might be in trouble. Meta’s stock has plunged nearly 60 per cent this year, Facebook has been losing active users, existing users are consistently complaining about the company’s other social media platform Instagram, and fresh upstarts with their own apps are gobbling up the public’s attention.As Meta executives pour billions of dollars into the virtual reality world they call the Metaverse, The Globe’s technology reporter Temur Durrani explains the problems within Facebook, what they say about the state of social media more broadly, and what social media might look like in the future.Questions? Comments? Ideas? Email us at [e-mail]

Hi, I'm Mainika Raman-Wilms, and you're listening to The Decibel, from The Globe and Mail. How often do you actually use Facebook these days? You might still use WhatsApp or Instagram, which are owned by Meta, formerly known as Facebook Inc. But for a lot of us, we're using Facebook far less than we used to, if we're using it at all. And the company might be in trouble. Since the start of the year, meta stock has plummeted nearly 60%. It's pouring billions of dollars into the metaverse, which is, so far, mostly theoretical. And other social media platforms like TikTok and BeReal are gobbling up more and more of our attention.

Facebook's become the grandfather of these social media apps, and I think that's something that Facebook has to figure out in order to compete and combat and try to find ways in order to be relevant with its younger peers. And that's what we're seeing here. The Globe's tech reporter, Timur Durrani, is back on the podcast. He's here to tell us what's going on at Facebook, what that means for the broader landscape of social media,

and the big question, what should social media look like in the future? This is The Decibel. Tamor, thanks so much for being here today. It's great to have you in the studio. Thank you. Thanks for having me again. So let's just dive right into this. How relevant is Facebook these days? You know, that's a really interesting question now. It depends on who you ask, I think. And that's really the question of why whether Facebook is doing well right now or not can be answered differently depending on the generation. So of course, if you asked a millennial

whether Facebook is doing well or not, if you ask someone from Generation Z or Gen Z, they will give you a very different answer than a boomer who uses maybe Facebook a lot more than they do, say, for example, TikTok. So I think the most relevant and probably the most evidence-based answer will probably tell you from the numbers that we've seen this year from Facebook and how the users that are actually active on Facebook and whether that's translating to any revenue or not. Yeah, so this is an interesting thing because I feel like I don't mean I don't see even many people kind of my age using it, but I don't know if that's actually reflected in the numbers. Like what what are we actually seeing in terms of data there? So Meta this year, just recently in the second quarter, missed its top and bottom line. So it gave a very troubling forecast not only for

the third quarter of the year, but it also reported a steeper than expected drop in revenue. It missed on earnings. It issued a surprisingly weak forecast pointing to a second consecutive decline in year over year sales, which the company said is reflecting a quote, continuation of the weak advertising demand environment. So basically advertisers are no longer or not as much interested in you know advertising on Facebook and marketing their products on Facebook which is a big chunk of how Facebook and companies like it make their money. Even the shares for Meta have been really down this year. They've lost half their value this

year as marketers are pulling back on ad spending which is a very different story than what we saw in the beginning of the pandemic when all of us were using our phones and our devices a whole lot more than maybe we're now using as we're going back to work. Okay, so advertisers are not necessarily spending money on those online ads. What about the number of people who are like actually using Facebook these days? What do we know about that? So there was a really good new report that came out from a Texas-based research firm called GoNet.com, which provides brands and marketers with insights about young people around the world and just really, you know, any sort of information that companies can use to let them know where they should be advertising and where there should be marketing. And the figures that they've reported in that report from GoNet.com are interesting.

They're telling us that Facebook is no longer being used in the same amount of active daily users that say TikTok and Instagram are rising. And so if we were to just before we even jump into what GoNet.com talked about in the Gen Z and millennial side of things, which is a very crucial age group for these companies, because that's who they want to target right now. Let's bring up what these companies themselves have reported in terms of their daily active users. So this year, Facebook has said that the number of daily active users are 1.9 billion, which is a little bit, just a bit higher than late last year, which was 1.94. And now it's 1.98. So not a lot of difference from last year. But say, for example, Instagram has skyrocketed since last year, it's still going up quite a bit. So last year, Instagram reached a new milestone of 2 billion active users worldwide. And this year, it's

expected to go up to 2.5. So Facebook is not growing nearly as fast. It's not growing nearly as much as, say, Instagram. TikTok, on the other hand, is growing a lot. So as of late 2021, TikTok had over 1 billion monthly active users. And that number is predicted to increase to about 1.8 billion this year. So a sizable increase, almost a billion. Companies like Twitter that

some of us use and companies like Snapchat, those companies are only in the millions. So only 217 million people use Twitter and were monetizable daily active users as of this summer. And then as of the first quarter of 2022, Snapchat was 332 million people. But this is just, you know, a lot of numbers really to tell you that these are the kind of people that these companies, these social media companies can make money off of because they use them daily, these apps and websites, and that they can be targeted for ads and advertisements. And in some way, you know, again, this is the kind of numbers that we're talking in terms of whether Facebook is growing or not. So it really shows you that not a lot of people are using it anymore in the same way that Facebook thought they were going to. And so just to complete the circle then

for Facebook, because there's not so many active users, is that why advertisers are pulling out of the platform then? Yes and no, because I think the macroeconomic issues that we're also talking about that are really, you know, kind of affecting everything in every sector, but in tech in particular, are also a big important reason why marketers are no longer putting up the same amount of money that they were doing before. So what are those macroeconomic factors that are, I guess, causing them to pull out then? We're talking about Ukraine. So of course, the big war in Ukraine that is really causing a lot of people to then cut down on their discretionary spending. And then, of course, there's inflation.

And then we're talking, you know, a looming recession. All of these are fears that are kind of allowing ad companies to think about whether it's even worth advertising to people or not, whether it's even worth, you know, for them to try to target people who might not be wanting to spend any money at all. So what are they really going to get out of that? And that's a real question they're asking. So they're basically they're just being more frugal, essentially, than at this point. Okay, so this is this is very interesting

to actually kind of see the reasons behind this then. So Facebook also owns WhatsApp and Instagram, which a lot of people still use, it's still pretty popular. And so I want to talk about this platform specifically, because there have been complaints recently about Instagram shifting to to more videos. High-profile people like Kim Kardashian has complained about this. What changes are actually happening at Instagram then now? I think the most interesting thing right now for anyone who is using social media or, of course, reporting on social media, is what really is the reason why Meta keeps trying to copy

or at the very least mirror all of these other social media apps that are out there. So now Meta, which owns Instagram, has decided to, over the last few years, really try to mirror and copy all these different social media apps. In the case for Instagram, they've tried to copy TikTok in a very, very obvious way. So some of us who use Instagram daily have started to notice why exactly are these reels popping up everywhere when they used to not? Why exactly is every other person that I see on my homepage, someone I don't know?

And that actually, again, as you said, led up to the Kardashians pointing it out. And I think that was the only reason why the head of Instagram, Adam Mosseri, felt it necessary to respond to a video message to users. And his message was that the things you hate about Instagram right now will continue until morale improves and the pivot to video is inevitable. So he made it very sure. He said, quote, I need to be honest. I do believe more and more of Instagram is going to become videos. So, you know, Instagram is thinking that TikTok is doing way too well. All of us are liking it a whole lot more than we would like to, and that it needs to try to match what, you know, TikTok is offering to users and whatnot. Even YouTube, which is by and large the largest social media,

which, you know, it's a word that we might not want to use for YouTube, is the largest social media platform out there in a lot of ways. And even they have tried to mirror a lot of those short clips that we see on TikTok. And so it's interesting to see how and why. But I think another thing is that this isn't the first time Facebook has tried to or Meta has tried to, through Instagram or any other company that they own, tried to mirror another social media app. We'll be right back. So let's get into another example here, Tamor. There's this new app called Be Real, which I was just recently learning about. I think a lot of people, it's new for a lot of people here. What is happening with this app, Be Real?

So let's talk about what Be Real is quickly. Be Real is a new social media app that launched in 2020, but only started gaining popularity earlier this year. Its main feature is that it has a daily notification that encourages users to share a photo of themselves and their immediate surroundings, given a randomly selected two-minute window every day. So basically, the most interesting thing about this app is that it's very authentic. You don't get to choose, you don't get to edit anything, and you quickly send a photo to your friends. And this app has actually gotten very, very popular this year.

In August, it was the most downloaded app. It actually surpassed Instagram and TikTok, which might explain why a lot of other apps are actually worried about it. So who is actually worried about Be Real? It seems like everyone's worried about Be Real at this point. So in August, it was reported that Meta has confirmed it was internally prototyping a new Instagram feature called IG Candid, which allows users to share an authentic photo at a

random time each day. Very suspiciously close to what Be Real is. But while it was thinking about it very quickly, TikTok already launched its own very suspiciously close to Be Real feature called TikTok Now. It launched last month in September, and it's already gotten quite popular. So a lot of people are using it, meaning that, you know, if TikTok's worried about Be Real, maybe everyone else should be worried about Be Real. This isn't the first time that Meta's tried to or has actually absorbed the features of another app that's successful out there into its own, you know, universe of different apps. I mean, Meta has done this with Facebook over and over, over the years. We've seen how Instagram, of course, quickly absorbed the market of Snapchat by copying those features almost entirely.

Yeah. So, I mean, it sounds like Meta is kind of borrowing a lot of ideas here. They're kind of, you know, seeing what is popular and kind of maybe integrating those ideas into their own platforms. What does all this say, though, about Meta's ability to innovate itself? I think it's interesting. Any type of business that you follow or any industry that you try to see, this is seen across the board, right? So anyone who is doing really well and wants to remain really well in that sector will want to keep the edge to itself that, hey, I'm offering something that nobody else in my sector is offering to you. And so Facebook for a very long time has provided that to us. And now very

quickly over the last two decades, Facebook's become the grandfather of these social media apps. And I think that's something that Facebook has to figure out in order to compete and combat and try to find ways in order to be relevant with its younger peers. And that's what we're seeing here. So when you aren't able to provide something new that people are excited about, what do you do? You either try to copy it or you try to buy it out. And in the case of Facebook,

which grew its market cap so much so quickly, it tried the latter. It did try to buy out a lot of companies. In the case of Snapchat, it really, really was a very famous way of asking the company two years into its founding, hey, we wanna buy you out. And Snapchat very famously said, no, we don't want your $3 billion offer in 2013.

And since then, we've seen where Snapchat's gone, right? So that's a really interesting story because starting from 2013, when Snapchat was really the go-to social media app for you to send photos to people or post what's called a story, was that was the app that was offering us that. And now we see stories, which are a way for you to put a photo 24 hours a day that sticks around on your social media profile on every single platform we look at now. So even Twitter tried something last year, which then it had to axe, called Fleets, if you remember.

So there's been a lot of things like that, that companies have tried to mirror each other. But Facebook has been very obviously trying to do this for a while now. And so that's what we're seeing sort of with Facebook, where one company isn't the top dog for a while, and suddenly it needs to try to mirror other apps that are getting attention. And so this isn't a unique problem to Facebook. Yeah. Okay, we have to talk about the metaverse, of course. So meta, which which owns Facebook has been putting a ton of money into into the metaverse, which is essentially a virtual reality space. It has gotten a lot of criticism, though, particularly when they were kind of launching this stuff. And Mark Zuckerberg put out this photo of him standing in front of the Eiffel Tower. And it was just like really bad graphics, like something you would see out of the 1990s.

I wonder what you think about this gamble with the metaverse. Is this a failure? So it's interesting whether Facebook's big gamble into the metaverse will actually work or not. I think it's important to go back to what they're telling us, right? So Facebook's been very clear that it's going to take at least five to ten years for it to become a reality. And I think something that a lot of people, you know, with skepticism should understand is we never thought Facebook would become this big either. And we never thought Facebook would inspire all these many social media apps that we are so used to using on our phones now, right? So who knows in

five to 10 years whether we're all going to jump to the metaverse or not. But what's interesting is whether it's actually happened yet or not and what we know about it. So Facebook says the metaverse is a set of digital spaces, including immersive 3D experiences that are all interconnected and you can easily move between them. It essentially will allow you to do the things that you can't do in the physical world. So you and I could, you know, be having a meeting at the office, so to speak, while we put on our headsets and just at our home. And that's something that Facebook hopes

will be something we'll start doing a lot more. It hopes that a billion people will start using the metaverse in the next decade. And like, have you actually started doing stuff in the metaverse? I'm curious, have you gone shopping or stuff in the metaverse? I'm curious. Have you gone shopping or had meetings or anything like that in that kind of experience?

We've tested it out. At The Globe, Joe Cataldo and I are both reporters that have looked at the metaverse quite significantly. And we've both seen the metaverse in this interesting way, which at first it didn't have legs, and now it's developing legs for humans and bots and whatnot in the metaverse. But, you know, whether it will turn into something for us to go shopping or use for our work or for us to attend concerts is something we have to ask ourselves maybe in a few years from now.

I don't think it will be something we can answer in 2022 based on what meta, of course, Facebook have provided us about what exactly it will look like. Because right now, it still looks very much like a Minecraft game, you know, so to speak. Do you think people will actually buy into this idea of the metaverse? Like from everything you're reading and the people you're talking to, what do you think of what's going on at Facebook right now? I think it's a hard sell, Medica. I think it's a hard sell because it's one of those things where whether it will be a sell to investors is another problem.

But then on the other hand, it's also a problem with us, the regular users that it's trying to target. Are we really wanting to put up headsets on our faces every day and trying to log into something that we're not even sure is going to allow us? You know, the features, is it going to just look like a gaming virtual reality kind of a thing that we've already seen that you said, you know, looks like the 90s? Is that something we really want to do? I'm not sure.

But again, I'm not necessarily as skeptical as a lot of people because I've seen that, you know, these things change so quickly. I think we underestimate how much we'd want to use the same things that our friends and everyone else around us is doing. It takes five people in a group of 10 to really start doing one thing for the other rest of the five

to start doing the same thing. So maybe, you know, if I start using it, Manika, you might want to start using the metaverse too, because you're like, hey, why does Timur get to have all the fun? You know? So I think it's interesting. It's a question that we have to ask ourselves philosophically.

Are we ready to let go of all the different things that we're used to on our phones? Are we ready to let go of what we perceive as the way we interact with each other now through texting and that kind of a thing? Are we wanting to talk to each other in person in the metaverse? So this kind of raises, I guess, the big question

of what does all this tell you about what social media will actually look like in the metaverse. So this kind of raises, I guess, the big question of, of what, what does all this tell you about what social media will actually look like in the future? I think it's interesting. Cause it's like, you know, think about it this way. We're, we,

we want different things from our social media apps, but at some point they've started to blur into one another. Right. And we've started to notice that. And I mean, that was the reason why the Kardashians called it out. You know, when they said,

Hey, Instagram should not be looking like Tik TOK. Cause it's a very different thing that we want from those apps, right? But then they also have to think, we also have to think about, you know, whether the philosophical question of what really is it that we want from our social media apps? How did we get so used to the idea that all of them offer us different things? And that's something that will help us understand maybe what will be the next big social media app. I do think that, you know, in the pushes that we've seen from all these different apps, especially TikTok, it's tried to go towards the community-oriented features and that kind of a basis, right? And so I think that's something that speaks for social media apps and websites as a whole, that they really want you to have smaller communities and then bigger

communities that you interact with. And that's something we'll start seeing a lot more from our social media apps is that they'll find very many different features and ways in which we can all talk to our close group of friends and close group of followers. That will probably remain the main reason why we use social media apps for a very long time. Tamara, it was great to chat with you. Thank you so much. Thank you. Thanks for having me. That's it for today. I'm Mainika Raman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show.

Kasia Mihailovic is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.