A 9000$ facebook, or the long tail of social networks
With the progress in technology, generic products catered to the vast majority of consumers are no longer the way to capture value. Low prices, mass marketing, and market share were paramount of a successful business and used to guarantee long-term competitive advantage, but that is no longer the case. The increase in availability of information and the evolution of production processes has given tremendous impetus to an opposite movement: serving a niche market with products that are perfectly suited for that audience, and demanding a price premium for them.
It is of particular interest to see this trend develop even amongst one of the newest industries, the social network industry. This industry, hardly existing few years ago, has one major generalist incumbent, Facebook, but it is increasing seeing newcomers gain users in differentiated markets. LinkedIn for professionals, Pintrest for creatives, and now even a social network only for rich people, Netropolitan.
How does it work?
Launched last week, Netropolitan describes itself as “the online country club for people with more money than time.” The tag line may seem elitist, but given the 6000 $ signup and 3000$ yearly fee it is clear that the target audience is not the average Joe. “This is 100% real, and I believe there is a need and an audience for this service,” Netropolitan founder James Touchi-Peters told CNN. Touchi-Peters is a composer and the former conductor of the Minnesota Philharmonic Orchestra.
The exclusive club members must be above 21 years of age, avoid any forms of soliciting, and refrain from treating a customer service representative as their personal concierge. Of course, members also must agree not to divulge the identities of other members outside of Netropolitan. In terms of features, the social network is pretty secretive, but it should offer the standard profile, notifications, messages, location, as well as groups and notifications.
As might be expected, the project does not lack detractors. Many claim that the network is useless when other as effective tools are free. Others instead point out that the system simply lacks quality. Its infrastructure is “built with WordPress, BuddyPress, and bbPress, using a $63 Themeforest theme” highlights the WP tavern. Such specifications indicate that Netropolitan may not meet certain quality standards, especially high given the target clientele. Nevertheless, it seems that it has caught the attention of users and the website is already crashed due to the excessive traffic, a mere few days after being officially open.
Will it work?
In times of Occupy Wall Street, Golden Parachutes, and rising income inequality, it is clear that the wealthy are more detached from society and there is growing dissatisfaction with the super-rich. Nevertheless, the luxury industry has always existed and it is hard to question that the high income are a niche with spending potential and that they might have an interest on connecting amongst each other. Whether Netropolitan or another similar platform will do the trick it will be up to the market to determine, but the news is that there surely is a market to be served there.
V. Woollaston (2014). “Facebook for the RICH: Netropolitan costs $9,000 to join – and for $3,000 a year you get file storage and no adverts,” from http://www.dailymail.co.uk/sciencetech/article-2759169/Facebook-RICH-Netropolitan-costs-9-000-join-3-000-year-file-storage-no-adverts.html
A. Kooser (2014). “Social network for rich people costs $9,000 to join,” from http://www.cnet.com/news/social-network-for-rich-people-costs-9000-to-join/
L. Montini (2014), “$9000 Will Get You a Membership to This New Social Network,” from http://www.inc.com/laura-montini/a-social-network-for-really-rich-people-finally-exists.html