The COVID-19 pandemic has forced many of us to adjust our usual work-life balance. Rather than maintaining the strict division between home and office, individuals have adapted to a new hybrid lifestyle, combining all under one roof. This new lifestyle has afforded many people with additional free time that would otherwise be spent commuting to the office. Unsurprisingly, people are choosing to use this free time to browse their favourite social media platforms. In Q1 of 2020, daily time spent in apps increased 20% on Android devices in comparison to last year.

The COVID-19 pandemic has also led to a greater uncertainty in job security. To combat this uncertainty, many people have turned to advertising on social media or streaming as a way to earn passive income. Although the prospect of turning a social media following into an income stream can be enticing, if your income relies solely on social media or streaming revenue, it would be prudent to understand the risks associated with the platforms. Two such risks are: (i) bans or suspensions; and (ii) lost revenues. On many platforms, a user accepts these risks simply by signing up to use the service.

Bans / suspensions

When joining a social media or streaming website, the user will be required to accept the Terms of Service (ToS). The ToS is a legal agreement between a service provider and a person who intends to use that service. A typical ToS will include terms such as:

  • Limitations of liability
  • Privacy policy
  • Rules and policies

Lost Revenues

Another risk posed to social media users is lack of compensation for lost revenues. Companies looking to pay a user for promotional services consider many different factors when valuing a user's influence. These include:

It is common for a service provider to include a policy regarding suspension or termination (bans) of accounts that violate the ToS. In some cases, the service provider may suspend or terminate an account at any time and for any reason. This termination right poses a risk to the security of future income derived from the platform, as an individual may be exposed to having their account suspended or banned with little recourse for having it reinstated. Whether justified or not, a ban will end a user's ability to reach their audience and derive income on that platform.

  • the type of platform
  • the user's following
  • engagement with followers

For example, when a user accepts Instagram's ToS, they also accept the following:

A user must often accept the risk of lost revenues arising from a suspension or termination of their account before they can use a platform's service. Lost revenues from ads or devaluation may not be compensated by the service, regardless of whether the suspension or termination was justified.

Takeaways

You agree that we won't be responsible ("liable") for any lost profits, revenues, information, or data, or consequential, special, indirect, exemplary, punitive, or incidental damages arising out of or related to these Terms, even if we know they are possible. This includes when we delete your content, information, or account.

  • Depending on the platform, a user's value can be based on views, likes, shares or retweets of their posts. This adds monetary value to every one of the user's posts, even if they are not recent. The deletion of these posts can result in lost revenues for the user, or a devaluation of their engagement level. This risk is often assumed by a user the moment they accept the ToS.

When relying exclusively or in part on social media income, it is essential to understand the risks associated with the platform. Many platforms require the user to sign a ToS that include policies on banning and deleting the content of its users. Any individual or company considering using social media for income must read the ToS of the particular platform carefully and may wish to seek professional advice in order to understand the risks associated with relying on the platform for revenue.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.