maandag 14 september 2015

Empowering the Business and the Consumers


In 2012 Facebook acquisitioned Instagram, followed by WhatsApp in 2014. It might be considered as one of the biggest social media acquisitions in the past few years. However, the WhatsApp acquisition was indeed Facebook’s biggest app purchase since then. The Mark Zuckerberg’s kingdom paid $1 billion for Instagram and $19 billion for WhatsApp[1]. Such a big amount of money spent is a proof that Facebook obviously wanted to empower itself through the convergence.
Despite being labeled as the pioneer in social media phenomenon, Facebook has experienced a a declining number of users[2]. On the other hand, the new kids on the block, Instagram and WhatsApp, are becoming increasingly popular[3].  We can see that, although they have different functions in digital industry, users are still the vital part of their existence. Facebook and Instagram are part of the social media, WhatsApp is a text-based chat application, but all of them have a similar primary function: to connect people. Therefore, the reason why Facebook bought Instagram and WhatsApp is more or less similar: to acquire whoever they see as big rivals and to minimalize potential competition in the future.[4]
This acquisition can be categorized as economic convergence as Facebook looks for new business models as well as wider market. As we mentioned above, before the acquisition, there was a decreasing level of Facebook users. After the acquisition, Facebook users still showed a hesitant rising, but the amount of Instagram users rose to 23% in 2013.[5] Moreover, Instagram now has advertisements. Therefore, not only Facebook as a company grew larger than before (thanks to Instagram and  WhatsApp), a new improved business model was also applied to its sub-companies. Of course, in the end it was all designed to make more profit and to sustain the company.
Facebook, Instagram and WhatsApp are different platforms, with different content and a distinctive presentation. Facebook was established as desktop-based website, with the mobile version arriving later. Both Instagram and WhatsApp are mobile-based applications, with a desktop version that was developed later, yet the system is still primarily mobile based. Therefore, it is clear that actually they are based on different platforms and on how they make use of the technology. They also have different ways to “connect people”. Facebook is a pioneer of sharing stories in the digital era, but if a user specifically loves photography, then Instagram would be his choice. On the other hand, WhatsApp facilitates people for a real-time text and phone chatting, as well as video and audio messaging. The merge of these three company not only has an impact on the economy sector, but also on socio-cultural. The socio-cultural convergence has an impact on how the merge creating transmedia storytelling accross platforms[6].
Facebook is supposed to be to have broader audience, since it can share different contents from photos, videos, links, stories, even places and events. Instagram has a more specific audience because it can only share photos and videos. WhatsApp is a different story as it is a messaging application, not a social medium, and it has also a specific area of service. Instagram and WhatsApp are new players in digital industry, but their growth is something that should be considered. Therefore, we believe a corporate convergence is a really good maneuver to sustain Facebook’s digital power. The merge of different platforms, area of service, and audience creates a  great chance of profit increase as well as cultural influence among their audience.
Another example of media convergence can be seen on various business sectors Fashion TV (FTV) has managed throughout the year. The entertainment company was started by Poland-born Michel Adam. He started with his own club, Café Fashion, in Paris. Due to his close  connection to the fashion industry, he then established a satellite-based fashion and lifestyle broadcasting, Fashion TV in 1997. It is broadcasted in 193 countries across five continents. The company has been expanded to multiple business sectors since then, which include website (fashiontv.com), a mobile application, alcohol and non-alcohol beverage products (F Beverage), love-f-cafe in various European cities, as well as various merchandise products.[7]
From European-based broadcasting media, Fashion TV has been expanding to other countries outside the continent, both in South East Asia and Middle East Asia. It became an international company. The expansion has created a global convergence in which the company distributes its cultural goods multi-directionally around the world[8]. The television channel broadcasts a range of fashion shows, lifestyle events, and jet set parties from around the world. It was able to blur the borders between culture in each country with its world-wide contents without forgetting to highlight the local contents as well.
The expansion of the company to other types of business service was obviously to gain more profit. However, there was also a need to create another business model to support to the recent one. Globalization demands a faster and more practical news distribution, consequently the launch of Fashion TV website was an act to sustain the company mission in distributing its contents. Furthermore, reporting social events and parties are also some of the highlighted contents in Fashion TV. The company saw an opportunity to expand the business and its audience by becoming the hosts of some events, by launching its own cafes (love-f-cafe) and producing its own drinking products (F Beverage). Hence, through a grassroots convergence that the company has established, Fashion TV has empowered the consumers play by shaping an extension of production and distribution[9]. 
Producing drinks and merchandise has created an economic commodity to the company. Fashion TV has not only broadcasting contents from other sources, but it has also created its own intellectual properties to enhance profitability. This is an obviously economic and cultural synergy within the company. The company’s growth has improved the scale of business model within it, as well as developed its textual products[10].
The merge of social media and mobile application (Facebook – Instagram – WhatsApp) as well as the long-term improvement of Fashion TV are supposed to create significant implications in economic, social, and cultural sector within the company. One similar thing we could find on these cases is that both couldn’t resist an expansion to the digital industry. As companies which have a strong connection with creative industries, digital evolution is something that could not be avoided in socio-cultural convergence.

Thesis:
Synergy and convergence are not new, but digitalization is speeding up the process and is enabling businesses to reach an international audience.

Sources

               
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Locatie: Africa

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