Have you notice how much the business model for Facebook appears to be morphing into the “Walled Garden” Media App Stores employed by the Telcos and the handset manufacturers (e.g. Nokia, Apple and Blackberry)?
Today the Facebook economy is a mirror of the Mobile Phone Bling economy we examined months ago in More Eyeballs and More Revenues but is it the future of the mass media?
As we discovered in Media Platform or Fashion Statement? the bulk of the new media sales from the original “Walled Gardens” provided the customers with Music, Ringtones, Wall Papers and Games that enhanced or personalised the handset. Today we are seeing the same thing happening on Facebook.
“Virtual Goods: Insane, but insanely popular. The creation and selling of virtual goods and gifts makes absolutely no sense to people who just use the Internet as a basic communications tool. Try telling someone who isn’t really into Facebook that they could buy a virtual bouquet of flowers for 99 cents and send them to a friend — they’d look at you like you were mad.” – Web Daily Worker
The Facebook business model is morphing into the desktop version of owning the mobile phone network or handset. Own the network or the platform and you’re the new gatekeeper. Once you’re the gatekeeper then its 7 4 U 3 4 Me for anyone who wants access to your subscriber base.
“Today more than 500,000 applications exist on Facebook, and the virtual goods within those applications (particularly games) have become an increasingly valuable part of the user experience…The long-term goal of Facebook Credits is to provide a currency that makes purchasing virtual items across applications fast and simple. To make it easy to buy Facebook Credits we support several different credit cards, fifteen currencies, mobile payments, and now, PayPal.” – Facebook Developers
The “Facebook Credits” is a debit account system just like Apple’s iTunes store and the Telco’s original pre-paid mobile service. It allows Facebook it to build a virtual bank without actually having to deal with the regulatory problems of becoming a bank.
The reason why Mobile Bling and SMS translate into virtual goods, social games and twitter on the desktop web is very simple. It’s because the behaviour of people using Social Media platforms like Facebook and Twitter basically mirrors the behaviour of Mobile Phone subscribers. Sending messages (SMS) and playing games are the two most popular activities on both platforms.
That’s why in Japan Social Media and Mobile Media have morphed into a single Mobile Social Media platform.
The question is how sustainable is Facebook’s strategy once America and the Rest of the World catch up to Japan and embrace Mobile Social Media? Can Facebook still be the gatekeeper in a mobile world where the Telcos and the handset manufacturers already own the keys to profiting from the network and the handsets?
And what happens in the online world if Google decides it should also been in the business of “owning the platform” and introduces the Pay wall to end all Pay walls to allow Media Content Producers and Applications Developers to profit from Google’s web? After all isn’t Google in the business of having a little bit of Google in everybody’s transaction with the Internet? I can just see Google pitching the revolutionary idea to the online world.
That’s 9 4 U 1 4 G.
Imagine a world where you could buy a magazine article or a video clip for 10 cents and send it to a friend. Even if it’s 1 cent most content producers would make more money online with this model than what they will putting ads on the menu.
I guess you have to ask the question. If the object of the game is to amass the largest amount of traffic and then introducing a pay wall so developers and content owners can make a profit this “walled” traffic why hasn’t Google done it already?
After all Google could already be the biggest “Virtual” Banker in the world today if “Walled Gardens” really are the Past, Present and Future of online media.
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