Facebook is on the way to its journey from a personal social network to virtual reality metaverse. However, of late, it faces challenges. The price of its stock declined by 26 per cent on account of poor financial results. Its business of targeted advertising has become vulnerable due to change in Apple’s privacy policies. It also faces a threat from the legislators in the EU and US who may introduce similar measures.

The Federal Trade Commission (FTC) claims that Facebook followed a ‘buy or bury’ strategy. It acquired WhatsApp and Instagram to protect its monopoly power. It continues to follow buy or bury strategies to move into VR. The FTC offered enough evidence that buys of WhatsApp and Instagram were to neutralise actual and likely future competitors.

However, FTC case faces a convincing argument. Facebook is free and so there is no question of it being a monopoly. What is to be proved that Facebook is charging predatory low prices to drive out competitors. Or alternatively it is prohibitively costly and hurts the consumers. Facebook being free, runs the argument, is harmless. The FTC feels that even a free monopoly could be harmful. It is difficult to prove this. Even then Facebook exercises monopoly power in the market of personal social network.

The suit ties up the company in a legal battle and puts tremendous pressure on the revenues. FB earns close to 99 per cent of its revenues in advertising — say $118 billion in 2021, with $39.4 billion in profits.

The beginning of this millennium was marked by Orkut, a cool social media network. Orkut has become defunct. Currently, we have Facebook and Instagram. However, Facebook too has admitted that for the first time in its 18 year history, it is losing users. It is taking efforts to retain the users; especially the teens and young users.

Many small networks have emerged. These have unbundled the offerings of the big networks. These new apps may not be as big as the Facebook products in terms of reach and size, but they are fast scaling up. Verticalisation of social media has to happen — through format, language, user segments or use cases.

Today’s platforms are broad-based. These are not adequate. There is scope for niche social media platforms. They can penetrate deeper. They cater to diverse segments. They have more nuances in a given segment.

Some user demand is generated by the adverse effects of the existing platforms. And then the innovative pace of the big tech is slow. The youngsters feel that a platform must provide them a real connect. They want a dedicated platform. Existing platforms have a composite audience. A niche should be carved out for them.

There is scope for vernacular platforms. There could be dialect-based OTT platforms. Podcasting falls between full-fledged social media and OTT channels like Netflix. There are others in-between platforms such as YouTube and Kuku FM.

Uable is a social network for teenagers. Swell is a social audio app. Qlan helps users to reach their tribe or squad or community better and faster. India mimics Silicon Valley. It keeps pace with it. It aspires to go ahead of them by noticing the change in behaviour of the audience and change in technology.

BookMyShow business suffered as online ticketing got adversely affected in the last couple of years on account of the pandemic. BookMyShow initiated movie purchases and rent business called transaction video on demand (TVoD). It all started in February, 2021. In a year that followed it streamed 1900 titles. It is estimated that the revenue from this space, i.e. pay-per-view or TVoD is Rs.1890 crore in 2022.

This space falls between the theatrical release and OTT streaming. Hollywood studios too tie up with BookMyShow stream to release their movies. It is a revenue sharing model.

The ticketing app of BookMyShow too hosts the Stream service. Most users are from Metros and A grade cities. They are mostly young. They belong to the larger cohort of SVoD subscribers.

If you miss seeing a movie in a theatre, this is an alternative channel. They are willing to pay for the premium content.

Pricing may not favour TVoD in India. Higher pricing is not an incentive to see the movie. Indian consumers are not willing to pay for online content. There is a threat of piracy too.

What may attract the viewers is the timing of the release. A highly anticipated product may attract viewers. Hollywood studios release on TVoD, but Indian studios are not so enthusiastic. Anyway, it is an extra revenue stream. It follows 6-8 weeks of theatrical window.

Though Metaverse still remains a theoretical concept, Facebook considers it the next phase of internet, and has started doing internal recruitment of manpower for roles in augmented reality and virtual reality. At the same time, it is doing recruitment externally from rivals such as Apple and Microsoft. It has rebranded products like Oculus (virtual reality headsets) with Meta name.

Meta has 68000 plus employees. It has listed 3000 open job vacancies on its website, of which 24 per cent are for roles in AR-VR.

In an anti-trust suit in the US, it has been alleged that Facebook and Google have been involved in ad collusion. Attorneys and other states alleged that the companies had a secret deal that gave them a leg up in the search giant’s online advertising auctions. More details in a new anti-trust complaint have been given about the alleged collusion with Facebook in programmatic ad markets. The project had been codenamed Jedi Blue, which was reviewed at the highest levels of both companies.