What Hollywood Can Teach Social Media

This piece first appeared on September 9, 2013 in incrunchdata news.

It may come as a surprise to film fans and critics, with the number of recent flops like The Lone Ranger, White House Down and R.I.P.D., that this has been a banner summer for Hollywood, thanks in no small part to audiences outside the United States. Indeed, global moviegoers, particularly those in emerging markets, are increasingly influencing how motion pictures get made; and there is a lesson here for social networks. American movie attendance has steadily declined over the past decade, albeit growing just about everywhere else. Accordingly, international audiences for Hollywood films now account for nearly 70% of global box-office. Thus, major studios are increasingly more inclined to churn out variations of franchises in formats that play well in rising foreign markets, even if they may bomb at home. Sequels, for instance, sell a great many more tickets outside the U.S., which helps explain why Pirates of the Caribbean 5 is now in pre-production.

It may come as a surprise to film fans and critics, with the number of recent flops like The Lone Ranger, White House Down and R.I.P.D., that this has been a banner summer for Hollywood, thanks in no small part to audiences outside the United States. Indeed, global moviegoers, particularly those in emerging markets, are increasingly influencing how motion pictures get made; and there is a lesson here for social networks.

American movie attendance has steadily declined over the past decade, albeit growing just about everywhere else. Accordingly, international audiences for Hollywood films now account for nearly 70% of global box-office. Thus, major studios are increasingly more inclined to churn out variations of franchises in formats that play well in rising foreign markets, even if they may bomb at home. Sequels, for instance, sell a great many more tickets outside the U.S., which helps explain why Pirates of the Caribbean 5 is now in pre-production. Moreover, while the popularity of 3-D is softening here, the biggest hits abroad this summer were all three-dimensional.

2f20132f092fTwitter-Hollywood-Star2So far at least one social network finds itself in a similar situation. Though Facebook’s membership surpassed one billion in 2012, it actually lost 10 million American visitors. What is more, its revenue from new markets is growing at more than twice the rate of North America and Europe. Yet Twitter, Linkedin, Pinterest and Google + are also experiencing considerable growth among active global users because nearly one-in-four people on the planet now use social media. The largest group lives in Asia Pacific, home to more than four times the number of social inhabitants than North America. Greater numbers of users also reside in Latin America, the Middle East and Africa; and their first encounters with social networking often take place on mobile devices.

In fact, this year marks the first time mobile internet users in developing countries will outnumber those in industrial nations. In February, China surpassed the U.S. as the world’s largest iOS and Android market for smartphones and tablets. A significant segment of its online population has leapfrogged personal computers and gone straight to social via mobile systems such as cross-platform instant messaging services WeChat, WeMeet and Weixon.

Consequently, Mark Zuckerberg recognizes that future users will come almost entirely from emerging economies, and like American movie studios, social networks will have to balance diverse needs and interests.

The most immediate challenge is the fact that the majority of the world’s seven billion mobile phones are not yet smart so social networks must find less elaborate ways to engage their owners. To that end, Facebook recently launched Internet.org, its partnership with several handset and infrastructure manufacturers committed to “shaping the networked society” by improving the cost and efficiency of delivering Internet services to even the cheapest phones.

Should they succeed, they will still have to adapt to significant differences in online behavior. Asians, for example, are less protective of their privacy than Westerners. The research firm Forrester, has found that 75% of American social media users are passive spectators or “lurkers,” the opposite is true in markets like China and India, where 76% and 80% of their respective social populations are active content creators.

Then there is the matter of censorship. Like many American films, Facebook and Twitter are currently prohibited in China. YouTube is outlawed in Pakistan. Saudi Arabia has banned WhatsApp. Plus Vietnam has decreed that its citizens can no longer share or discuss news and current affairs online.

As they attempt to balance these differences, will social networks shift their allegiances to adhere to the manners and mandates of growing emerging markets, even at the expense of their domestic users?

It is still too early to tell. Once robust developing economies are slackening and their purchasing power has fallen. Nonetheless, their rate of consumption is expected to grow six times faster than developed markets, and the middle classes in these countries are advancing at record rates, even as their opposite numbers in the U.S, and Europe are in retreat. This is especially significant since the middle class has historically been the most likely to adopt new media and technologies.

Furthermore, Facebook and Twitter still dominate global markets while most new social systems and services are essentially variations of the current leaders. But according to a report by the Royal Society, China is already years ahead of the West in building the next generation Internet, with new means to both enhance and limit online traffic.

Most importantly, American social networks have been successful, in large part, because they have communicated American values. “America’s brand,” as Jonathan Berman, a senior fellow of Columbia University’s Vale Center has labeled it, has promised three distinguishing qualities: opportunity, individuality and liberty. So far, no other country has made a more appealing offer.

Whatever the ultimate outcomes, there is little doubt social media will surely change as it reaches new and ever-widening audiences; and social networks, like their motion picture counterparts, will have to continually adjust. Perhaps Mark Zuckerberg expressed it best during a recent interview when he said: “People often talk about how big a change social media had been for our culture here in the U.S. But imagine how much bigger a change it will be when a developing country comes online for the first time ever.”

Article written by Howard Gross for icrunchdata news New York, NY