Social Media is changing

Hi friends 👋,

Welcome to the 21st edition of Weekly Olio - your weekly dose of laughter, learning, and maybe a little bit of intrigue.

For our new subscribers, the format is simple. Each post comes with a quote, a tweet, an infographic, a short read and a long read. We also run a column called Publisher’s Parmesan that carries thought pieces on some exciting and relevant developments happening around the world.

Today’s, Publisher’s Parmesan talks about the evolution of social media. From Myspace to Orkut to Facebook and now TikTok, social media has evolved by leaps and bounds in the last 20 years. In this week’s piece, we take a look at eight trends that are shaping this evolution.

Let’s start with the curation, but first, a word from our sponsors.

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The Quote󠀢 💭

The Tweet 🐦

Every December, Indian news outlets are filled with stories of fresh engineers from the haloed Indian Institutes of Technology (IITs) bagging huge packages with top global software firms.

These fancy $$ packages are converted to INR without adjusting for purchasing power parity - making them look inflated and giving FOMO to thousands. This thread busts a few myths about what a $100K salary can and cannot buy in the US.

The Infographic 💹

As the world’s third most consumed beverage after water and tea, coffee is everywhere. As coffee lovers will tell you, each cup of coffee has a complex and nuanced flavour profile depending on where the coffee is sourced from. Here is a cup of coffee showing the top producers worldwide.

The Short Read 📝

What caused the demise of Boeing’s 747 airliner? - by The Economist

The aviation industry bid a bittersweet farewell to the iconic Boeing 747, fondly known as the "Queen of the Skies," as the last jumbo jet rolled off the production line for cargo use only.

This article reflects on the rise and fall of the 747 and the role it played in transforming the aviation industry. From its debut as a game-changer in passenger travel to becoming a burden on airlines due to its size and fuel inefficiency, it discusses how the 747 paved the way for the hub-and-spoke business model, its rivalry with Airbus's A380, and the emergence of more efficient aircraft.

While the end of the 747 era may seem like the end of an era, the article explores how the future of big passenger planes may be looking up, particularly in the post-pandemic world.

The Long Read 📜

I’ve been employed in tech for years, but I’ve almost never worked - by Emmanuel Maggiori

What is happening right now in tech may be one of the greatest market inefficiencies—or even deceptions—in history. Outsiders deserve to know what’s really going on in the field.

The title of this article says I’ve almost never worked when employed in tech. But that doesn’t mean that the author never worked. 😀

In fact, he has worked really hard and been part of amazingly productive teams which delivered top-notch products in record time (and clients loved them). The thing is, this hasn’t happened in a traditional environment, that is, when employed full-time by a mid-sized or large tech company. It was only when working as a freelancer or for early-stage start-ups that he witnessed productive tech work.

The article captures why he thinks that happened, as he hopes some of the features could be exported to the broader tech industry.

Publisher’s Parmesan 🧀

Social Media is changing

From Friendster to Orkut to Facebook and now TikTok, social media has been evolving rapidly over the last two decades. What started as a fun way to connect with long-lost friends is now a significant part of most people’s daily lives. Fortunes are being built by teenagers wielding smartphones and producing 20 second dance videos. Here are eight trends underlying the massive shift in social media propelling this change.

1. Rise of AI-led recommendation engines:

Facebook was built using the iconic friend graph - users could see and connect with what their friends on the platform were doing. Instagram adopted the same approach but with TikTok came the AI-led recommendation engine.

Now social media platforms serve not just what your first or second-degree connections are sharing but anything that can potentially go viral. With Facebook also publicly embracing the recommendation engine, this is a profound change in the way social media networks operate.

In a recent earnings call, Mark Zuckerberg said that he expects AI-recommended content to make up about 30% or more of users’ Facebook and Instagram feeds. With massive investments in scaling up it’s investment in building recommendation engines for Reels, Zuck is walking the talk.

Due to the rise of AI-driven recommendations, anybody can go viral, no matter where you are from and what you do. A creator like Khaby Lame, from Senegal, would not have been conceived even 10 years back. This one single change is has democratised content distribution like nothing else has.

2. Social media as the place for discovery:

The switch to the recommendation engine has led to social media platforms becoming the primary discovery platforms for GenZ. Whether it is music or fashion, discovery on TikTok or Instagram reels is the way to go.

75% of TikTok users say they discover new artists through TikTok and 63% of TikTok users heard new music that they've never heard before on TikTok.

As per the Economist, more than 50% of Gen-Z users in the US have purchased from a brand discovered on social media.

In India, Bollywood movies have added simpler hook steps to their dance sequences to drive virality via Instagram Reels. Big consumer brands are being built on top of social media led influencer marketing. In India, Mamaearth has built a billion-dollar company solely on the back of influencer marketing. Per the latest estimates, it spends almost 39% of its revenue annually on influencer-led sales.

3. Software tools for easy content creation: 

To feed the algorithms, user-generated content has exploded across platforms. This is driven, in part, by the rise of simple and easy-to-use tools to create videos, photos and other content.

When Instagram launched, its easy-to-apply filters were all the rage. TikTok took it a step further making it super easy for anyone to shoot, edit, cut and share videos.

Fast forward to the 2020s, we have a slew of tools designed to make anyone with a smartphone a content creator. Video editing tools like Capcut have risen to the top of global app download charts - making content creation super simple.

The recent influx of generative AI tools has unleashed a new generation of creativity on social media. South Korea and Indonesia already have large companies built on top of so-called virtual YouTubers i.e., digital avatars running their own live streams on Youtube.

We are already seeing the rise of virtual influencers on Facebook and Instagram. Brud, a Los Angeles-based tech company launched Lil Miquela - a virtual Instagram influencer in 2016. Today she has almost 3M followers.

As AI becomes more mainstream, these trends will only accelerate.

4. Everybody can be a content creator:

With easy access to software tools, cheap smartphones and the chance to become a social media superstar, the number of users trying to create content has sky-rocketed in the last few years. The job of a ‘content creator’ did not even exist 5 years back. With the internet, even a tiny niche an be big enough to support several large content creators

While CoVID helped accelerate this trend, the roots were laid even earlier. In a 2019 survey of 8 to 12-year-olds conducted by Lego, almost a third of the students surveyed wanted to become Youtubers when they grew up.

On Youtube, there are only about 51M channels against a monthly active user base of 2.6B. On the other hand, more than 80% of TikTok users have posted at least one video. Driven by recommendation algorithms, everybody has a shot at greatness in today’s social media world, irrespective of their standing in the real world.

5. Emergence of creators as brands:

With the explosion in the number and importance of content creators, we are beginning to see the rise of social media first celebrities. 10 years back, real world celebrities became social media celebrities. Now, it goes both ways. People like Mr Beast or Khaby Lame could not have existed 10 years back.

Creators like Mr Beast are using social media to build strong distribution before branching to build brands linked to themselves. This kind of distribution was earlier limited to movie stars, sports champs or politicians. Mr Beast has leveraged his social media-led presence to launch a constellation of brands. He was reportedly looking to even raise venture capital at a $1.5B valuation to launch more brands and products around the Mr. Beast brand.

As creators become more important, platforms are as dependent on the creators as the creators are on them. Facebook and Tiktok have launched dedicated creator funds to discover and highlight newer creators. As the new age of social media continues, creators will continue to become powerful.

6. Launch of creator monetisation features:

The first-generation social media platforms of the 2000s did not really have creators trying to earn their living off of them and hence there were limited or no ways to monetise. Youtube was an exception, it has allowed creators to monetise via Google ads.

As social media content creation becomes a well-defined career path, platforms have already starting to open creator monetisation options. Twitter has tips and Instagram has launched subscriptions. In addition, we are seeing tools like Substack transforming themselves into social media platforms with monetisation at the centre of the entire experience.

In 2021, Substack reported that the top 10 writers on its platform made more than $20M in revenue. Services like Patreon and OnlyFans also seek to leverage social media presence to monetisation for creators. Now, the platforms themselves are experimenting with tools to allow direct monetisation of content - in an effort to prevent creators from moving off-platform to monetise.

Models around virtual gifting and platform currencies have been used by Asian platforms like Bigo Live and Kumu. TikTok also allows viewers to purchase and send Diamonds to their favourite creators. Once enough Diamonds are collected, creators can exchange them for a cash reward.

A lot of this is new but as content creation takes hold, we can expect more creator monetisation avenues to be launched.

7. Rise of social sellers:

The emergence of social media as a discovery channel has allowed the creation of a whole host of new-age consumer brands. From cosmetics to food to fashion, everything can be sold via Instagram and TikTok. In South East Asia, Tiktok Shop has 4xed its GMV in less than a year.

In Indonesia, there is a whole industry of shops selling Hijabs using TikTok Shop and Instagram. TikTok shop has had massive success across South East Asia since its launch. While Instagram Shop itself has struggled, platforms like LTK - that help connect brands with influencers have continued to thrive.

Youtube announced a partnership with Shopify in 2022 to enable creators to set up product shelves in live videos allowing viewers to purchase products while watching a video from within Youtube. It also introduced a new shopping destination in the Explore tab featuring shoppable relevant content for users in US, Brazil and India.

It is not just brands, a lot of users are also setting up online shops to earn extra income. The recommendation-led nature of products like Instagram reels and TikTok has allowed this explosion in social-led e-commerce. While it may have been optional earlier, no brand can afford to ignore social media in today’s day and age.

8. Unbundling and localisation of platforms:

The first generation of social media platforms like Facebook started off in the US and hence, retained the core features for Western audiences i.e., English first and desktop-led. This approach opened up white spaces, especially in emerging markets like India, LatAm and South East Asia, leading to the development of localised social media platforms.

As newer population segments came onboard the internet and social media, a new type of verticalised and localised platform is emerging. India saw the rise of Sharechat - a vernacular social media platform focussed on non-English speaking Indians.

Koo is another Indian Twitter clone that is betting on its vernacular roots, it is already becoming big in India and Latin America. There are multiple other examples of language-first social media platforms: Kakaotalk in Korea, VKontakte in Russia, Taringa! for Spanish speakers and Skyrock for French speakers.

In addition to language, vertical networks catering to specific user personas have also emerged e.g., Apna is a social media and jobs platform for blue-collar workers in India.

Looking to the future, what new trends do you predict will emerge in the world of social media and how will they shape the way we interact and do business?

Let us know by hitting reply to this email or commenting below.

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Peeyush and Mohit

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