BeReal: Being Real is Going Broke
By: Renee Wu & Sherry Yang
The Ivey Business Review is a student publication conceived, designed and managed by Honors Business Administration students at the Ivey Business School.
To Be, or Not to BeReal…
BeReal, the French social media platform launched in 2020 as the “anti-Instagram,” was designed as a response to a social media landscape saturated by staged and meticulously curated moments of life. The app demanded authenticity: at a random time throughout the day, BeReal sends a notification, giving users two minutes to take a photo of whatever they are doing, wherever they are. BeReal’s meteoric rise from 10,000 monthly active users in 2021, to 25 million as of November 2023 signals the value authenticity holds amongst its predominately Gen-Z and Millennial user base.
Zooming in on the Problem
In the past few years, BeReal has followed in the early-stage footsteps of social media giants, placing a strategic emphasis on rapid user growth over enhancing the app’s profitability. As such, the company currently has no mechanisms to monetize its users and operates solely through generous – and perhaps overly optimistic – venture capital investments.
However, the problem does not lie in the fact that BeReal is not profitable, but rather that it has no obvious path to generate revenue. This is because the prevailing industry strategies are diametrically opposed to its core value proposition: to be the “authentic” social media platform. BeReal is not designed for users to spend hours on the app. While Instagram and TikTok build algorithms that are designed for addiction, BeReal has built-in time barriers for use such as limitations on quantity and method of photo-sharing. This, paired with a feed that only “unlocks” by posting, forms the basis of BeReal’s authentic experience but also makes the platform a poor host for digital advertisements.
Aside from digital advertisements, incumbent social media giants generate revenue by selling user data, something BeReal reportedly does not do. Pursuing a path of selling data is unlikely to be conducive to the platform’s success. The Washington Post found that 6 in 10 TikTok and Instagram users distrust the companies’ handling of user data and that social media companies are the least trusted in the technology industry purely due to data privacy concerns. This creates a strategic misalignment for BeReal, whose current goal is still reliant on growing the platform through positive customer word-of-mouth promotion.
While BeReal grapples with internal issues, externally they already face challenges of platform envelopment. BeReal’s core photo feature has already been copied by Snapchat’s “Dual Camera” and the now discontinued “TikTok Now.” Ultimately, without successful differentiation and a pathway toward monetization, BeReal would BeBroke.
A Reality Check
Given that paid advertising in an authentic platform is an oxymoron, BeReal should implement a two-step strategy to attract a broader user base that places monetary value on an authentic experience. First, BeReal should expand the platform to make use of the Millennial half of its user base. Not only has this age group demonstrated comfort and willingness to experiment with new social media platforms such as Meta’s “Threads,” but their average disposable income surpassed Gen-Z’s by 55 percent as of 2022.
Second, BeReal should capitalize on its broader user base by introducing a freemium model with features that enhance the app’s authentic experience. Paid features have been successfully implemented into Millennial platforms such as Discord’s $2.99 Nitro Basic. Additionally, other platforms such as TikTok and Instagram have been rolling out premium, ad-free models or subscriptions to access exclusive content and features. BeReal could move existing features such as the “Memories” storage, video BeReals, options to link Spotify, and the “ReCap” – BeReal’s version of the popular annual Spotify Wrapped – to the paid subscription plan. They should also introduce new features that complement existing trends such as monthly “ReCap” collages that could be shared to other social media platforms and personalized RealMojis. This recommendation preserves BeReal’s integrity while creating a path towards revenue and further growth.
Real Recognize (Be)Real
User-generated content (UGC) is any type of content created about a brand, not by the brand itself, but by its customers. It includes everything from Q&A forums to reviews, to photos and videos posted about the brand. It remains so powerful that 57 percent of Millennials have made travel plans, and 56 percent made decisions about a restaurant based on seeing someone they know post about it. UGC is BeReal’s solution to a B2B profitability strategy.
BeReal’s value proposition is daily, authentic user-generated content. Thus, BeReal should concentrate its efforts on forming partnerships with various entertainment venues and establishments, including bars, clubs, amusement parks, and periodic mega-events such as music festivals, in order to offer tailored BeReal experiences. By utilizing the geotagging feature already integrated into BeReal’s infrastructure, the business model could introduce a “Discover” page that aggregates all BeReals posted within a specific geographic radius. This functionality enables event attendees to access BeReals captured by others in the vicinity, providing them with valuable insights such as other attractions or familiar faces in the area. For instance, while exploring an amusement park, guests could discover which rides, shows, or activities other users are currently enjoying and connect with fellow attendees. Additionally, guests could encounter humorous moments captured in BeReals at the location, underscoring BeReal’s untapped meme potential and capacity to generate viral content. Moreover, guests have the opportunity to view BeReals they may have taken with strangers – crowded events such as concerts or bars are prime use cases for this feature.
For an event or entertainment company, having control over the time of day BeReal goes off is powerful. Rather than hoping BeReal happens to go off during their event, a company could be given custom control over what time of the day a BeReal goes off for a certain demographic in a certain geography. Event coordinators could pick the best moment, timing mass photo taking for when the headlining artist goes on stage, when the fireworks go off, and other perfect moments. This creates daily, curated user-generated content that they could use as marketing content. Companies should also keep a pulse on their brand image by monitoring their “Discover” page and reporting offensive content.
Through this business model, BeReal gains a revenue source by licensing its technology out to event or entertainment companies. This revenue stream is more consistent, has higher margins, and is more scalable than selling data or integrating digital ads. BeReal also gains exposure to a greater variety of demographics, ideally resulting in increased user growth that would continue to bolster the platform.
The Real Deal
It is recommended that BeReal partners with Live Nation Entertainment (Live Nation). Live Nation currently holds a monopoly over all stages of live music in North America, with record-breaking earnings of $22.7 billion and ticket sales of 620 million in 2023.
It is logical for BeReal to collaborate with this entertainment firm, considering the strategic synergy between its value proposition and the atmosphere that an entertainment company aims to foster at its events. Partnerships like these have proven successful in the past, as seen with TikTok’s partnership with Eurovision over several years, which capitalized on shared interests in music streaming growth and singer discovery. BeReal's dedication to authenticity and embracing the present moment resonates strongly with events like music festivals, which prioritize similar values. In addition, the large scale of these companies ensures such a partnership is financially feasible.
To put on its concerts in 2023, Live Nation spent $17.2B on direct operating expenses. That means that each ticket holder costs Live Nation around $27.75. If BeReal charged Live Nation Entertainment a price of one percent of the total operating expense per ticket holder for their services, a 100,000-person festival would earn BeReal $27,750. Cost-wise, this is equivalent to $0.28 per piece of user-generated content, which is a great deal for Live Nation when the average nano-influencer (1-10,000 followers) in 2022 can charge $10-$100 per piece of content.
Status Update: It’s Time to BeReal
BeReal has experienced monumental platform growth for a small startup that originated with word-of-mouth marketing. It banked on an untapped desire to be authentic on social media in a way no other platform was offering. But authenticity only goes so far: BeReal is now at a precipice, where it must either scale profitably or BeForgotten in the graveyard of obsolete social media.
By focusing on millennials and adopting a freemium model and B2B service offerings, BeReal pivots their business strategy in a way that ensures financial survival, while aligning with their founding principles. Being real would not mean being broke if BeReal seizes the opportunity to transform authenticity into long-term viability.
