I guess it’s serendipity that this post showed up over at Yglesias’s blog this morning. It discusses a paper that argues that deficits actually lead to more demand for government, as shifting costs to the future lowers the public’s sense of the cost of government services, prompting them to consume more. This doesn’t seem very controversial to me (or at least I’m not qualified to say anything interesting about it).
But just yesterday I was thinking about something very similar in the context of the current storm over Twitter. Not so much because of the specific question of how much Twitter client variety we’ll see, but the larger question of the firm beginning to make decisions that will help it generate revenue rather than decisions that will help it generate user adoption.
And it occurred to me that we basically debt finance our social networks. There are a few exceptions, but in general nobody’s willing to pay for social experiences on the web. So instead we’ve arrived at a model where open registration, open APIs and open bars at SXSW are used to attract users. Then, once network effects have given the experience value, and so long as transition costs remain inconveniently high, value can be extracted from those users. Lots of people tell lots of stories about how this can be a positive-sum interaction (usually fairytales about how valuable anonymous usage data is, or how people will suddenly start enjoying the experience of looking at ads if the sales pitch is sufficiently personalized). But in practice it seems to always be the case that user experience is degraded in some way.
This isn’t a particularly great insight, I suppose: that you can goose demand if you shift costs into the future. Discount rates exist; it’s why economists fret about declines in consumer borrowing. It’s why people still smoke cigarettes.
I have an aesthetic aversion to it — a general sense that things would be better if costs were presented up front. That it would be preferable for Twitter to be a protocol like email rather than a service like Facebook. Maybe even that it would be more moral for them to be. That the costs associated with transitioning between social networks every, what, five years are high enough to be worth complaining about.*
But this is probably is just a meaningless prejudice on part. Twitter wouldn’t have become Twitter if those costs had been apparent from the start. To wish it could be otherwise is just to say that you want foolish angel investors to buy you toys for free**. The service will probably remain fine for a long time, and then it’ll get worse, and we’ll all bitch about it and eventually something else will come along.
I just hope that when Google finally decides it needs to make some money off Gmail that they have the class to ask me for it to my face instead of creating some privacy-violating Rube Goldberg device by which other corporations agree to exchange money for making my life very slightly worse, as if I was plugged into the Matrix to power cybernetic tyrants with my mild irritation.
* Whatever this inclination is, it’s closely related to the sense I have that mobile vendors shouldn’t use contracts to subsidize handsets, and that cable TV should be a la carte, and that bandwidth should be billed on a metered basis. In all cases these “innovations” probably facilitate commercial activity that’s desirable, but I’d be happy enough to see it disappear simply to avoid the sense that people are being duped. I guess it’s just pique.
** To be clear, I’m in favor of this.