How long ago was it that Facebook debuted? I remember my eagerness to create my account in those early days, so I could track and stay in touch with my scattered family and long-ago school friends. At the time, I thought it was wonderful that this new service was available to bring people closer together.

Few people gave any thought to the idea that being a Facebook user wasn't like being an electricity user or water consumer; I certainly didn't. As the reasoning went, you turn on the tap and water comes out. You flip a switch and the light comes on - provided you pay your bills. You log in to Facebook and had access to your loved ones.

And the best part was, unlike household utilities, there was no monthly fee for usage. Oh, how innocent we were, back then! And amazingly enough, there is still no fee for using Facebook or any other social media site.

Which rather begs the question: why aren't they charging for the valuable service they provide?

Make no mistake: for all that FB, Twitter and others are oft-reviled - some refer to them as the death knell of civilisation, they do provide a service and it is valued. Facebook's billions of users worldwide attest to that fact. And who can forget the era of 'governing by tweet'?

Economic theory dictates that, if you have something valuable that people want, you set the highest price for it that consumers are willing to pay. Social media does that.

Social media charges the highest price for their service
Social media collects plenty from its users, all without charging them a penny. Photo by Adem AY on Unsplash

How Facebook Makes Money

Understand that money is not the only currency you have. Your preferences, your connections, your habits and desires; your moods, wishes and political views... all of these and more are personal capital that you possess. They're what you invest in your relationships, they define your professional and community interactions, they inform your political choices and dictate what you buy.

Through your interactions on Facebook, all of that capital is unstintingly collected from you. However, before it can be valuable to anyone besides you, it must be monetised.

Facebook collects all of these random data points about its users and then, sells the accumulated data to third parties -  marketers, advertisers and data analysts who track trends for a variety of reasons, from forecasting fashion to predicting political sentiment.

Often, you can see the results of your data at work.

Let's say you've been gushing on Facebook about a big camping or rafting trip you're planning. You might suddenly notice adverts for tents and other outdoor gear on your homepage. That's how you know that 'someone' is paying attention to you; scrutinising your interactions for clues on how you might spend your money.

And then, they work to influence whose pockets you'll direct your cash.

Facebook makes its money by selling you twice. First, to the analysts, marketers and advertisers who want to know how to sway you, and then by collecting premiums from those same marketers and advertisers for placing their adverts in your feed.

How Twitter Makes Money

Twitter is very public about where its revenue comes from: advertisement and data licensing. The advertising part makes up the lion's share of their income and it works in much the same way that it does for Facebook. Twitter algorithms tell advertisers and marketers who have expressed interest in which topics and products. Those entities then load Twitter users' feeds with the corresponding adverts.

Data licensing is described in distinctly unsavoury-sounding terms.

Companies increasingly realise the value of data as a business asset that should be protected and can be exploited through licensing to third parties. - Thompson Reuters article

Note that the corporate take on data licensing doesn't consider the users whose data is being collected and packaged for resale.

This article states that consumers' data is a business asset - not a personal asset belonging to consumers that should be safeguarded. It should be considered the property of the business that harvests it. Furthermore, it can be exploited - not fairly used or used in exchange for any type of return to the consumer whose data is being exploited.

Setting aside our disgust over such predatory verbiage, let's again focus on Twitter's business model.

For them to have continuous stores of data to license, they must have a steady - and preferably growing flow of users they refer to as mDAUs. That stands for monetizable daily active users. In other words, their business model entails monetising their users' data for their own profit.

All of this is more or less disclosed in users' terms of use agreements. Whether the language is clear and easy to understand - and whether anyone takes the time to read these lengthy declarations is beside the point. If Twitter users, en masse, suddenly become outraged by the blatantly proclaimed exploitation of their personal capital, they have little recourse.

Those user terms are written to deliberately muddy the waters over how their data will be used and, even if they all gathered to take massive legal action... well, they forfeited their right to any remedy simply because agreement to those terms is the prerequisite for using the service.

So they monetise you and you get to use their service. Nothing says you can't monetise their service, though. How about claiming your share of money in the media?

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How Users Can Make Money on Social Media

'Famous for being famous' is not a new concept. The phrase was first featured in an analysis written in 1961 by American sociologist Daniel J. Boorstin. It represents people whose only claim to fame was being renowned, not for any remarkable deed - good or bad, but only because their faces were everywhere.

Paris Hilton is famous for being famous
Paris Hilton is a good example of someone famous for being famous. Source: Wikipedia Credit: Celebboy

Social media influencers are the latest version of people in the mid-60s who were famous for being famous. However, far from past generations of such glitterati, today's influencers are savvy marketers who excel at building and promoting their personal brands. They earn millions in the process.

Being a social media influencer isn't the only way to make money on social media.

Not everyone is keen to market products like many beauty and travel influencers do. Some people earn their living on social media by hosting live streams and podcasts or launching a Youtube channel to post videos on specialised topics such as economics, politics and commentary on current events.

If a channel is well-received, has a lot of subscriptions and consistently high viewership, sponsors are likely to finance the venture. The savviest personalities who go this route maintain a presence across several platforms: Twitter, Insta and others to maximise their online presence.

If that sounds like something you could do, then you too could be making money on social media.

How Media is Financed

Just like Facebook, Twitter and other social media, media in general - print and broadcast media, is financed through adverts. In most countries, the government chips in, too.

Contrary to popular thought, government involvement in the media is not due to any sinister intent but because, historically, keeping the public informed was considered a public service. Thus, like other such services, the government-funded it. They don't (directly) fund social media though, and that's where increasingly more of today's advertising dollars go.

Commercially financed media probably will not suffer much from the slow transition to online productions. Indeed, many such corporations like the UK's ITV and broadcast media elsewhere in the world have already started migrating. Public media like BBC (UK) and PBS (US) don't have the resources to make that transition as quickly.

How media is financed should be of the utmost concern to everyone. Won't you join our discussion to learn more?

Dogecoin was a disaster; what will happen to Twitter?
The same person who provoked the dogecoin fiasco is now sole owner of Twitter. Photo by Crystal Mapes on Unsplash

The Privatisation of Media

Elon Musk now owns Twitter. Should we worry - like many who've long been worried about Mark Zuckerberg being the sole owner of Meta?

Many people just don't care how media is financed and who owns it but, for those who are concerned, their shivers are well-founded. It all comes down to one crucial question: should a single person or corporate entity have absolute control over public discourse?

You might argue that the government controlling the media is just as perilous; your point would be well-proven by recent happenings with Russian broadcast media. We contend that situation is an outlier; for the most part, governments can be held accountable for their actions. Corporations, with their deep pockets and heavy political influence, usually can't be - or simply aren't.

Privatising the media presents a cascade of ethical dilemmas, not the least of which is determining the standards of public trust for corporations that don't have a duty to the public, and questions about massaging the message to sway public sentiment.

To drive that point home, we only need to reflect on how polarised societies have become over the last 20 years, and how that trend has accelerated in just the past half-decade.

The discussion over media privatisation is far too urgent to summarise in such as short blurb. You need to take the full scope of the matter into account.

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Mauritz

Writer and qualified yoga instructor, who is passionate about health and well-being.