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A Social Network that Returns 90 Percent of Advertising Dollars to the People: Send Me an Invitation, Please!

By Ivan Ulchur-Rota

Translated from GKillCity Magazine

At this point, it’s hard to imagine. Mark Zuckerberg’s giant has rapidly established itself as the social network bigwig.  Facebook has bought its competitors like Instagram and by incorporating chat and video messaging has distinguished itself from platforms like Twitter or Linkedin. The network has constructed an empire through advertisements that accompany the content generated by its users. That’s why it’s censorship of every link to the fast-growing social network Tsu.co—that returns 90 percent of all ad revenue to its users—reveals what could become the giant’s Achiilles’ Heel: the redistribution of profit based on content.

Ivan Ulchur-Rota met Sebastian Sobczak, CEO of Tsu, at the Narco News 15^th Anniversary Celebration earlier this month in New York City. Photo DR 2015 by Al Giordano.

When Al Giordano—founder and publisher of Narco News and the School of Authentic Journalism in Mexico—moved to Tsu, he had already been frustrated with Facebook since December 2012. Giordano and the authentic journalism team had utilized the network as an outreach platform and built a community of more than 25,000 members to promote their journalism and school. Then, three years ago, Facebook imposed an “algorithm” to put 95 percent of that community out of reach unless the nonprofit media bought ads to promote the links to its stories there. “The Facebook user quickly got tired of all the ads, so they stopped clicking.” Another social network, Ello, launched as an alternative that did not sell users’ information, but was unable to prosper now that the whole world, it seemed, was addicted to Facebook.  

For Giordano the critical point was the realization that on Tsu nine out of ten dollars generated by advertisements would return to its users. “Facebook had pulled a ‘bait and switch’ on us, using our texts, voices and images to sell ads and kept all the value for itself. If someone had told us in 2007 that we could publish our work their website, recruit our friends and readers to use it, that they’d get money from ads and profit from it, and then we’d have to pay to reach the people we organized to come there, I would have told them to go to hell. But that’s how Facebook tricked everybody.”

Tsu is not playing Zuckerberg’s game. Instead, it has turned the rules upside down. By elevating the user as the main generator of profit, Tsu reinvents both social networking practices and our overall understanding of this type of technology. “When people realize that their content can generate money they generally behave better and the quality of their work improves,” he explains not without recognizing that this can also mean more work to purge the experience from money-seeking parasites and trolls whom the idea might attract as well.  But the project is a radical departure from an established and accepted paradigm.  This explains Facebook’s pre-emptive censorship of Tsu imposed this past month. Not only does Facebook now ban any link to Tsu, but it erased all previous links from its site, including in private messages between its members. When a user types the address of Tsu – dot – co into Facebook he receives an alarmist message that the link is a “security risk.” Perhaps it is for the social network that seeks monopoly status over the global Internet.

This is the censorship message Facebook imposes through a pop-up box now whenever a user seeks to post a link to a story on Tsu or when its upstart competitor is mentioned in private in Facebook messenger chat. It claims that Tsu is an “unsafe” website even after Apple and Google declared the Tsu app – downloaded recently by more than one million people – as safe.

The effort to disenfranchise Tsu reveals that its potential has been recognized. Giordano says it’s enormous. He explains what is happening in the context of the Rogers Curve, which in 1962 was developed by sociologist Everett Rogers to measure the rate of adoption of new technologies. “First come the innovators, who are about one or two percent of the general public, and they greatly influence the development of the new project.” They are followed by another 14 percent of “early adopters” that impact the direction of the innovation even more.

Tsu.co is at the stage of early adopters according to Giordano, who actively participated in the design of Tsu’s new group features and their monetization. The early adopters determine the experience for the “early majority”, the “late majority” and, finally, the “laggards.” According to the Rogers Curve, the arrival of an “early majority” is often very sudden. That’s what happened in 2007 when MySpace was virtually abandoned overnight and everybody woke up on Facebook. In the last six months, Tsu registered over three-and-a-half million users, now growing faster than any other network. When a million people downloaded the Tsu cell phone app in August and September, Facebook lashed out and censored any link to the start-up.

Early adopters therefore face a challenge: To prioritize the importance of quality of content. Much of the work of most active members has been to “weed their garden” from unwanted trolls that seek to make money by uploading trash o leaving meaningless, automatic comments. This consorted effort has resulted in a community seriously committed to generate value through what they share. “There are members who have collected more followers on Tsu than I have but that still don’t earn significant money. They’re not telling stories or putting on a show that keeps those followers coming back every day,” explains Giordano, who’s earned almost $1,500 since May and donated all of it to the Fund of Authentic Journalism and other charities on Tsu.

One very evident difference from Facebook is the way groups are managed. Moderators – who are rank-and-file users of Tsu, are very present in curating comments. Very often, posts within a group need a moderator’s approval to be published. Most groups associated with authentic journalism actively post guidelines on how to make the most of the community and keep it free from trolls. Likewise, because content is monetized, copyright laws are taken very seriously. It’s for example forbidden to post images, text or even lyrics without the author’s explicit permission. In that, Tsu seems to be created for creators.

This last point was critical for Giordano. As a musician who has spent his life surrounded by artists, this matter makes him particularly passionate: since MySpace offered itself as online music gallery, the amount of musicians who do not receive any compensation for their work has incremented significantly. According to a report by alphr, for most of the main digital music distributors the returns for small artists is minuscule. For every 500 000 track plays, payments vary between in three and four dollars. “A return of barely .008 cents for each time a track is played.“ While Spotify’s CEO Daniel Ek argues that no one has done for artists what Spotify has done, for Radiohead vocalist Tom York, Spotify prevents emerging artists from making a living with their craft.

The Internet has created a culture of theft of the arts. Even though it’s easier to distribute and access music, this has only benefitted consumers and the very same distribution platforms. Until the arrival of Tsu, content monetization has been limited to exorbitant audiences like with Youtube, which pays well only when someone’s viewership reaches the millions. According to research by journalist David McCandless in 2010 and 2015, for an artist to gain the equivalent of the US minimum wage on Youtube  ($1,260 dollars) their work had to reach at least four million two hundred thousand views. For Giordano, Tsu marks return to the times of “the agent” who once guaranteed outreach and venues for artists, writers and musicians and received 10 percent of the proceeds.

Tsu also rewards users for recruiting and organizing communities to join the network, putting a percentage of the value each user generate into the income stream of the user who invited him or her. The service is free to join and never asks for money from its users. Once a user has generated $100 dollars in value, he and she can redeem it and Tsu sends them a check. Meanwhile, they can donate smaller amounts they’ve earned to any of the 45 certified charities already on Tsu, one of which is The Fund for Authentic Journalism.

Tsu’s close affiliation to charity organizations sets it apart from any other social media. From the revenue generated in each group page on Tsu, for example, five percent is allocated to an organization chosen by the creator of the group. Al Giordano’s chosen charity is The Fund for Authentic Journalism, which every year gathers journalists, artists and social organizers to learn how to practice journalism for the public good. In that respect, Tsu’s community focus coincides with the Fund’s mission. Now, over 25 group pages on Tsu (groups where fans of Star Wars, NFL and fantasy football, community organizing and other themes gather each declare a nonprofit as beneficiary of five percent of the ad revenues its activity generates) have chosen it as their charity. “Call it a socialist social network”, says Giordano half-jokingly. But if Tsu can indeed make it possible for artists, journalists and nonprofits to live from what they produce, it would be revolutionary.  

Accounts on Tsu are still invite-only. You can use any of the following links as your invitation code:

Ivan Ulchur-Rota 

The Fund for Authentic Journalism 

Al Giordano 

This story originally appeared in Spanish on GKillCity, an online magazine based in Guayaquil, Ecuador. 

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