The Extremely Profitable Inner Workings of Digital Addiction

This article was originally published by Charles Hugh Smith at Of Two Minds Blog. 

Turn the crank of social media/search (SM/S) and you get highly profitable Digital Addiction and social destabilization leading to disorder and breakdown.

The extremely profitable inner workings of digital addiction are complex, but the business model is simple: collect user data and sell it to advertisers. The more users you addict, oops I mean attract, and the more time they spend on your platform, the more money you make.

The raison d’etre of social media/search (SM/S) is to collect user data to sell to the highest bidder. To maximize profits, the SM/S platforms stimulate users to post more content and spend more time “engaging” (i.e. creating user data) on their platform.

There are three mechanisms to accomplish this goal:

1. Financial incentives. By offering users a tiny share of a third of the trillion dollars in revenue (of just the top three platforms), users are incentivized to post more content and optimize that content to attract more views/engagement by other users.

The share earned by the few who attract an audience of millions is substantial, but the modest revenues shared with users posting content follows a power law distribution: a handful make millions, a few make $100,000 or more annually, a small circle make a middle class living ($60,000 annually), and the vast “long tail” earn a pittance at best.

Your song received hundreds of thousands of downloads? Thank you for the content and engagement. Here is your share of the revenues generated: $17. Your content attracted thousands of views, here’s your share of advert revenue: $73.

The share is a pittance, but it’s enough to drive a Darwinian frenzy that optimizes extremism and clickbait. This extremism can be measured, and as a result of the frenzied competition for attention, extremism is off the charts, with predictably destabilizing social consequences.

2. Self-worth incentives. Given the structure of everyday life, the vast majority of us have little influence or power in the status quo. (For many of us, our power lies not in the status quo but in opting out of the status quo.) Given the zeitgeist of our market-driven global economy, we observe others gaining visibility and income within the digital realm of social media. Since anyone with a phone or laptop/tablet can get online, this digital road to fame and fortune is open to all. This is in marked contrast with the real world, which is characterized by few pathways to fame and fortune, or even being noticed.

I’m worthy of attention is a powerful manifestation of selfhood: if I attract attention/engagement, I’m somebody. Without attention/engagement, I’m nobody.

This self-worth incentive is amplified by glorifying the few winners in the free-for-all competition for attention. No wonder it’s called the Attention Economy: attention = user data = trillions in revenue.

3. Optimizing addiction. The mechanisms of addiction are fairly well understood, and these mechanisms function with profitable precision in endless scrolls of feeds and posts and algorithms that amplify clickbait and extremism, for these arouse base emotions that then increase “engagement,” i.e. collecting more user data.

The net result is Digital Addiction and social destabilization. Turn the crank of social media/search (SM/S) and you get highly profitable Digital Addiction and social destabilization leading to disorder and breakdown.

Digital Addiction has many destructive consequences. Here is one with profound effects stretching across the entire landscape and far into the future: The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness (2024, Jonathon Haidt).