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What Does This Scary Statistic Mean For Facebook Inc.?

By Chris Kuiper, CFA - Apr 15, 2016 at 9:18AM

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Original content keeps declining; but is this a terrible thing for the social network?

Image Source: Facebook

If you've noticed your Facebook (FB 0.71%) newsfeed is increasingly full of shared articles, links, and YouTube videos, rather than posts from your friends, you are not alone. A recent article from The Information reveals a confidential, and potentially frightening statistic, which shows original content sharing is down 21% year over year, something Facebook is desperately trying to combat.

Facebook talks a lot about how much people share content on its platform. To its credit, total sharing remains fairly stable. But what also matters is the type of content shared on Facebook. It is the "original broadcast sharing" type that is down 21%. This is original content from users such as personal posts (like engagement announcements) or pictures and notes.

Why Facebook wants you to get personal
The other type of content is what we are increasingly seeing in our news feed -- links to an interesting article or story, a YouTube video etc. Facebook would rather have its users posting original content because this drives engagement with more comments, likes, and views, which in turn drives ad sales and revenue.

Approximately 57% of Facebook users post something at least every week, but only 39% of weekly active users post original content. Further, only 6% of weekly active users post to a specific group of friends as opposed to their entire news feed, according to the article.

While the data is from mid-2015, it shows an accelerating negative trend. Last year original content sharing was down only 15%. The problem also seems to be split along age groups with those under 30 posting less original content.

It's not like this has gone unnoticed
What is Facebook doing to combat this? The article notes a team was setup in London less than a year ago to come up with a plan to stop the decline. While it isn't clear what the team explicitly proposed, we have seen some changes that are aimed at fixing this problem.

The introduction of the live video features is one way to get people to start making their own content. Allowing native ads could also help video creators make money, as they currently do on YouTube. With more video content to sort through, Facebook has added video search functionality as well.

The algorithm that decides what gets shown on your news feed has also been tweaked to put more priority on original content. Further, there are more reminders for holidays, birthdays, and the "On this day" feature that tries to get people to reconnect with others. Some features run the risk of annoying people though, such as asking users of the phone app if they want to upload recent pictures as soon as they log on.

Why the decline, and is it really a problem?
One likely reason for the drop-off in original content is it is moving elsewhere. For some of it, it is simply moving to other services within or owned by Facebook, like Messenger or WhatsApp. But Facebook doesn't make any money from these ... yet. More worrisome is the move to Snapchat or other competing services.

The move of original content to more private services also highlights another reason why this is happening. People's networks may be getting too large or they have too many "friends" on Facebook.

The average user now has around 350 friends, but studies show our mental capacity can only support close relationships with around 150 people. Therefore, as our network grows larger, we are less apt to share personal information with those that are near strangers.

This raises the larger question of what the future of Facebook looks like. When Facebook started it was an intimate community, reserved only for those in college and therefore likely your closest friends. As it has grown and added features it is now a place to network, find out about businesses and products, read the news and opinions of others you admire, keep up on celebrity gossip, etc.

The Information article gives the illustration of Facebook as formerly a cool place to hang out with friends, but is now a bustling metropolis. This is not a bad thing per se -- but it is a change. People may welcome the change and use Facebook accordingly, reserving personal content for other services.

This also doesn't mean Facebook will suffer financially, and it could actually bring in more revenue, especially if it monetizes Messenger or related services. What would be a bad thing is if Facebook fails to recognize users are treating the service differently than when if first started, and tries to force them to go back to it.

Trying to take an open platform where the power to shape it is in the hands of the users, and force it to be something it is not, will likely end up driving users away or make them less engaged.


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