I have never been on Bluesky, but I already hate it. The fast growth of this new social media platform seems to be primarily driven by the most annoying and irritating characters on X. But that is also precisely the reason why I believe that Bluesky is more than a passing fad: it has the potential to lastingly change the social media landscape, and even if Bluesky itself does not do that, a platform quite like it will.
Let’s remember how, a little over two years ago, Elon Musk’s takeover of X (formerly Twitter) triggered a debate about the market power of social media platforms, and the appropriate policy responses. Musk’s critics argued that social media platforms were essentially the public square of the 2020s, and that they should be run accordingly – not as the personal plaything or vanity project of a billionaire. They should, at the very least, be heavily regulated by the state, and better still, taken into public ownership.
That argument was, of course, always somewhat self-serving and hypocritical: it was presented by people who had never expressed any such concerns as long as X was under progressive management. But this does not, in itself, make it wrong, and it is certainly not a reason to dismiss it. There was a serious economic argument behind it, which we could steelman as follows:
In economic terms, social media platforms are network goods. A network good is a good characterised by strong network effects and a network effect is when the value of a good increases with the number of its users. E-mail accounts were not especially useful in the mid-1990s, because there was hardly anyone you could have written to. By around 2000, they had become quite useful, because lots of people now had one and another few years later, e-mail use had become so widespread that it was almost indispensable to have an account.
Languages have strong network effects too. The reason why millions of people around the world spend a lot of time, money and effort on learning English as a second language is not that they all want to read Shakespeare in the original. It’s that lots of other people speak English too. Few people put any such effort into learning Icelandic or Faroese, because they lack those network effects.
Other examples of goods with strong network effects are currencies, telephones, software products and market platforms such as eBay.
Network effects can get in the way of competition. You cannot freely choose which network good you want to use: you need to use the one that most of the people you want to interact with are using. This means that you cannot unilaterally switch from one network good provider to another. Your inability to do so can create a lock-in effect, and entrench market power.
Until very recently, you could plausibly have argued that network effects give X a market-dominant status. Yes, there were a number of platforms that were functionally very X-like. But none of them ever came close to being a serious competitor to X.
Now, the rise of Bluesky is rapidly changing that situation. Why is that? Why is Bluesky succeeding where other platforms have failed?
Two reasons. Firstly, as mentioned above, the thing about network goods is that you cannot unilaterally switch from one provider to another. But that does not mean that you cannot switch at all: it means that switching takes some coordination. A large number of people need to make that switch at around the same time, not all individually in dribs and drabs.
In recent weeks, the X-to-Bluesky switchers have not just switched silently, the way you might switch from one café or one grocery store to another. They have made a big song and dance about it. That can come across as very self-important and attention-seeking, but – albeit as an unintentional side-effect – that behaviour fulfils an important economic role: it is a way to get over the coordination problem. This is the way to mobilise the critical mass of people you need to give the new platform some network effects of its own. With previous would-be X competitors, people just switched, and then sat there in their near-empty ersatz-X and wondered why nobody was following them.
Secondly, a big part of the reason why (political) X became so important was that it became a fashion show for political opinions: a virtual catwalk where people showed off their trendy views. If you wanted to be au fait with current ideological fashions, X was the place where you had to be.
In contrast, the X imitators that emerged over the past couple of years immediately acquired a ‘Trumpian’ vibe (indeed, one of them is majority-owned by the literal Donald Trump), and thus an association with unfashionable, low-status opinions. For a social media platform, that is the equivalent of being exiled to Siberia.
The exact opposite is true for Bluesky. As long as Elon Musk was merely seen as a contrarian tech bro, X could still maintain its position as the high-status opinion platform, even if it happened to be owned by the wrong guy. But now that Musk has gone so over the top with his support for Trump, that has tarnished the reputation of the social media platform itself. Switching to Bluesky is now itself a status signal, a way of saying ‘I’m too cool for a platform owned by a right-wing disaster capitalist’.
In terms of absolute numbers, X will probably remain huge for the foreseeable future. But arguably, absolute numbers are the wrong metric. When I say ‘X’, I usually mean ‘Political X’, because for me, that is X. But of course, millions of people use it to talk about completely different things (e.g. sports, music), and those people have no particular reason to switch. Yet if we break things down into more specific market segments, Bluesky is already a serious rival for political X, and whatever the future of Bluesky itself, a precedent has now been set. The rise of Bluesky has already demonstrated that a competitive market in social media platforms is possible. Despite my dislike of the sort of people it attracts, I suppose as a free-marketeer, I should see that as a good thing.
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