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Facebook, the social media Kraken, finally and surprisingly has new challengers across video, text, photo, and audio platform

Lately, the consumer internet, the set of products ascribed to build and monetize large networks of people, has started to feel buzzy. A space that has been primarily emptied out over the past few years has once again begun to hum life.

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These products are compelling and glowing fast enough that legacy social media platforms like Facebook, Twitter, LinkedIn, and others have started to reverse-engineer and copy them.

While it still doesn’t seem real to many, we can see the signs that social media platforms are competitive again.

Today, let’s take a tour of the unique landscape and what does it mean for tech behemoths trying to rein them in.

The End of Competition

If we had to decide when the competition ended among social media platforms, we would choose August 2016. That’s when Instagram rolled out its copy of Snapchat stories (1), blunted the momentum of an upstart challenger, and sent a chill through the startup ecosystem.

While we don’t think that copying features are anti-competitive, it is arguably a sign that the ecosystem is working as intended. However, the aftermath of Facebook copying here was climactic. Snapchat fell into a long dejection, and would-be investors and entrepreneurs got the message. Facebook would seek to acquire or copy any upstart social media production, dramatically limiting its odds of breakout success. Investment fell accordingly.

Last year, after the success of Twitter’s Periscope app, Facebook cloned its live video features, and enthusiasm for both products seems to peter out broadly. When live group video experience success under Houseparty, Facebook cloned that too (2), with Houseparty later being sold to Epic Games for an undisclosed amount.

In the putrid environment, several people believed it had been a mistake to let Facebook acquire WhatsApp and Instagram. The latter matured into the breakout social network of a younger generation, and the former plastered Facebook’s worldwide dominance in communication. A world in which both had resided being independent would have been much more competitive, even if neither had grown to the scale they did following Facebook.

It is the basic argument of the Federal Trade Commission’s antitrust lawsuit against the giant, filed in December last year (3). The United States government contends that Facebook is illegally maintaining its personal networking monopoly via the years-long course of an anti-competitive demeanor. And if it is successful, it would force Facebook to sell WhatsApp and Instagram. And as Ben Thomson explains (4), the government’s endeavor to define the market in which Facebook plays to prove it has a monopoly. It is a tricky case.

The market for social media products became incredibly concentrated over the past few years, with Google and Facebook building a duopoly in digital advertising. Their immense size and unpredictable effects have triggered a global backlash against these two American tech giants.

If you also think that this is a problem, we can argue for one of two basic approaches to fixing it. The first is the government intervention in the form of new regulations or an antitrust lawsuit. It would regulate tech giants’ ability to acquire smaller startups or put up further entry barriers in the market for competing on reasonable terms. The second approach is doing nothing and trusting that the universe’s entropic nature and the endless march of time would eventually reestablish competition.

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If the second choice does sound ridiculous, it is not without an exemplar. In the late 1990s, Microsoft’s dominance over the PC market left the government to seek an antitrust case over its move to bundle its Internet Explorer browser with the Windows operating system. The fear was that such integration would allow Microsoft total power over the consumer PC market forever. Of course, in reality, mobile phones were out there anticipating to be realized, and then Apple came and did just that, and now no one worries much about Microsoft’s power over the PC market.

However, we wish governments worldwide had intervened, especially the US government, around 2016 to explore new regulations for tech giants’ acquisitions and mergers. In the absence of these regulations, we can only bet on entropy, and whichever contrarian capitalists still feel like they could challenge Facebook in the market despite its several advantages.

The great thing is that many contrarian capitalists did that, and lately, they are achieving a lot of success.

The Beginning of the Competition

Facebook’s most significant competitor at present is TikTok, which has been siphoning users from Facebook family apps since it was rolled out in the United States in 2018 after it merged with

TikTok started by making it dramatically effortless for people to create compelling videos, allowing them to have fame and fortune with the main feed that is highly compelling even if one doesn’t even know or follow an individual. Moreover, eventually, it created an entire universe of visual effects, audio means, and community in-jokes.

Several forces have aided TikTok success and have made it difficult for Facebook or YouTube to clone its model.

People will litigate Instagram cloning Snapchat stories feature until the end of time. However, the fact is that format was never going to be some secure channel. Instead, it was a clever new dimension that differentiates social media platforms; still, it was also effortless to copy.

That is why TikTok’s network effects of creativity matter. To copy TikTok, one can not only copy any single feature. Not just the elements, but one needs to copy all of that. It includes how users deploy them and how the final videos and track with one another on the FYP feed. Moreover, one also needs to replicate all the feedback loops built into TikTok’s ecosystem, all of which are interconnected. While one can copy some of the atoms, the magic of TikTok lives at the molecular level (5).

The success of TikTok is a real anxiety for Facebook where employees ask Mark Zuckerberg, the CEO of Facebook, questions about it during nearly every all-hands Q&A sessions. Even though the company has deployed a competitor called Reels inside its Instagram, which may find a way to succeed, the significant point here is that whatever the odds are, Facebook now has to compete against TikTok, or it may be at the peril of succumbing to the next generation.

One probably has already considered that when it comes to mobile short-form video, YouTube and Facebook face a real challenge from TikTok.

So, where does the social media giant suddenly find itself forced to compete?

For starters, there is audio. Even though it is only still available by invitation, Clubhouse recently hit an estimated 10 million downloads (6). Celebrities such as Elon Musk, Tiffany Haddish, Joe Rogan, and Mark Zuckerberg himself have made debuts on the platform and granted it a cultural cachet, which is quite rare for a social media startup that is still less than a year old. Clubhouse clocked money last month at a valuation of 1 billion USD, more than Facebook conclusively paid to acquire Instagram.

Read Also: Meet Clubhouse Setting the Buzz Across the Internet

And since it is an audio app, Clubhouse doesn’t seem to pose quite the existential threat that TikTok does since one can still theoretically browse Instagram or message on WhatsApp while listening to a Clubhouse chat.

Regardless, Facebook seems to have been sufficiently intrigued by the platforms’ quick surge that is now working out on cloning the app, as per a New York Times report (7). Twitter already has a Clubhouse clone called Spaces in beta (8). Even though there is no clarity on how Clubhouse poses a threat to both companies, both of them are taking it as a challenge.

Who Else is Working on Clubhouse Rival?

Other than the obvious Facebook and Twitter, several other social media companies are trying to replicate Clubhouse-like features into their own respective platforms.

For instance, reports suggest that LinkedIn is testing a new audio feature for its platform (9).

Microsoft’s professional networking platform is working on a social audio experience for users to connect with their community. A differentiator for the platform is that unlike Clubhouse or its other counterpart, such as Twitter Spaces, its audio networking feature will be connected with users’ professional identity instead of a social profile.

Suzie Owens, LinkedIn’s spokesperson, told TechCrunch that LinkedIn had witnessed a 50% growth in conversion reflected in video shares, stories, and posts.

The report quoted that the team is doing some early tests to build a unique audio experience connected with one’s professional identities. Moreover, they are now also looking to get how they can bring audio to other parts of LinkedIn such as groups and events to offer the members even more ways to connect with their community.

Another social media platform that is working on a new audio experience is Telegram. The popular messaging service has launched a Clubhouse like feature called voice chat 2.0 (10).

It allows users to conduct live voice chat sessions with unlimited participants. It comes bundled with other features such as recording voice chats, invitational links, hand-raising mechanisms, and voice chat titles. The platform also allows users to cancel messages, listen to voice messages from where they are left off, and replace recipients.

In a blog post last week, Telegram announced a multitude of features that mirrors what Clubhouse offers. It allows admins of channels and public groups to conduct voice calls with unlimited live participants. Previously, the company has also launched the feature but limited only to group chats. Admins can also record voice calls to share with participants of the channel or group who may have missed the live voice call session. Participants can also see when the call is being recorded with the red light next to the voice call’s name.

Like Clubhouse participants, listeners are muted on Telegram and can raise hands to show the admin that they are interested in speaking in the voice chat. The admins can select which listener can participate at his discretion by looking at the listener’s bio.

Telegram allows group antenna elements to create links that would help participants to join the call directly. They can build separate connections for listeners and speakers to monitor who is speaking in the audio-only discussion. The platform also allows celebrities to maintain their privacy by enabling them to join the voice conversation using the channel’s name on the platform.

The platform has also added a feature for Android users to select which action they can configure by swiping left in the chat list. The acts range from pinning, muting, archiving, deleting, marking a chat as read. iOS users also have access to these features, and they can either swipe left or right to access them.

Apart from Twitter, Facebook, Linkedin, and Telegram, Discord also reportedly works on audio experiences (11). On Tuesday, Spotify announced it would also explore a new live audio experience after acquiring the Locker Room creator Betty Labs (12).

What’s More?

After years of making its most pre-eminent investments in technically challenging media, including augmented reality, video, and virtual reality, Facebook is reportedly taking another look at the text. The emergence of Substack over the past year has started to mint a growing number of millionaires, text-based creators while also pulling in millions of people away from their social feeds into the relative calm of the email inbox (13).

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What is interesting here is that Facebook is now looking to open up to the possibility as well. Earlier, we reported that Facebook is developing newsletter tools for writers and reporters.

As with Clubhouse, newsletters are hardly an existential threat to Facebook. However, they both have the potential to bleed time and attention away from its family apps, and in a world where news may not be available on Facebook in some countries, it may be wise for it to have a hedge. We also believe that Twitter also thinks the same way since it acquired Revue, a competitor of Substack last month (14).

Read Also: Facebook’s Intention with its Newsletter Game

It leaves Facebook competing with legitimately rapidly growing and well-funded competitors across different categories. While it is a much earlier stage, we have a solid reason to believe that the social media giant may soon have an exciting competitor in photography as well.

Dispo is another invite-only social app for photos with its own twist (15). Here users can’t see any images one takes with the app until after 24 hours of taking them. The apps send you a push notification to open them every day at 9 a.m. local time, among other things, an excellent way to have to boost daily users.

Founded by David Dobrik, among the world’s most popular YouTubers, Dispo has been around for a year as a basic utility. But last month, a beta version launched on iOS with social features such as shared photos quickly hit the 10,000 person cap on Apple’s test flight software. It had secured 4 million USD in seed funding in October. Considering the buzz continues into a public rollout, we wouldn’t be surprised if Dispo took off in a significant way (16).

Whether it is video, audio, text, and photos, Facebook has never had to stop competing across these dimensions in its history. However, we can’t remember the last time it was fighting so many exciting battles at the same time.

What does it mean?

When we say that social media networks are competing again, we are not implying that Facebook has not enacted in diverse anti-competitive ways throughout its history. We do not believe that Facebook should no longer be subject to the US government’s antitrust committee, and separately a collaboration of the US attorney general should abandon the lawsuits. And considering the new competition, we do not believe that Facebook should be allowed to acquire rival social networks in the future. We also do not think that Facebook will not remain the world’s largest social network for a long time to come or that its business will suffer in the short term.

In fact, we believe that there is an excellent case to be made with that antitrust pressure from the US government; mainly, it is what has allowed competition to return to the social media network landscape in the first place. If Substack or Clubhouse had emerged back in 2013 or 2014, it wouldn’t be hard for us to see Facebook running to acquire them and knock them off the chessboard (17).

However, in 2021, when Facebook faces a formal antitrust review in the United Kingdom over its acquisition of a failing gif search engine (18), the social media giant can only sit back and try to copy what others are doing much better.

If that is the case, it indicates that the half response to Facebook’s growing dominance over the past few years nevertheless has got us. However, belatedly to a better place.

The antitrust pressure has made it extremely difficult for the social media giant to drive acquisitions, which has opened a window just big enough for new entrants to climb through it. Now, it remains to be seen how big any unique challengers to YouTube, Facebook, or Twitter can grow. However, for the first time in a long time, the market is optimistic about their chances.