With the recent Facebook scandal with tens of millions of user data supposedly being used to influence the USA presidential election in 2016 we see the usual grandstanding and virtue signaling. We also see again discussion about privacy and even more in the EU with the upcoming implementation of GDPR. It has also become common to develop something first and worry about the question of ethics/morality and protection later (usually after an issue comes up).
Over the years I've grown numb to these data breach news. From people not knowing what they are talking about to using it for their own purposes and staying silent when it benefits them. Nothing unusual here from so many other cases, except probably that apparently users gave their data away themselves. As, like almost everyone, no one reads those pesky info notices about what the website you are connecting to wants to know about you and if it makes sense for what it is doing.
Underneath this scandal are much wider problems that need to be pointed out and discussed. The issue here is the model that Facebook choose to make money. Let's call this the ads model for simplification. As Andrew Lewis said:
If you are not paying for it, you're not the customer; you're the product being sold.
That is not to say that if you are paying for a product your data are not being treated the same as if you gotten it free (source). In this model the service you are using, its main revenue is through selling the user data or using it in some way to sell other products to buyers that can dish out more money, in the most common case ads to be displayed to you. It is a great model which has fueled the biggest Internet companies and given us great services.
But now alternatives are emerging, scandals are mounting. Like with blockchain there is an interest in looking for alternatives. If it is going to translate into something more tangible remains to be seen. After all the vision of millions/billions of $$$ from using the ads system can easily cloud ones judgment. Not to mention it is easier to get users when you offer something for free.
Alternatives to the ads system
As the title suggest I will be talking about publishing and SaaS sites. I will also focus on companies trying to make money and will omit crowd-sourcing. It is also to be noted that there is no best method and it really depends on the service/site what is best for them.
I'm out of hand rejecting the old sell once strategy as it is not really applicable here. With the increasing capabilities and speed of the Internet the SaaS sector has moved away from this model. In publishing even this is questionable at best as you could potentially sell individual stories, but even that is difficult. At best this would be used to sell some one time addons or something of that sort.
Better solution that has been widely adopted is the subscription model. User pays a fixed monthly or annual fee for the services. This is great as it provides relatively stable income for companies. It is often used in so called freemium model, where certain basic features are for free to get users enticed to go and buy the premium subscription.
In theory the company should be making enough money from subscription fees to support its basic functions and some extra. Like with everything it is about getting to the critical mass. The subscription model is great for services of any size where development is ongoing process.
A new player on the block are crypto currencies and utilizing user interactions to make money. It is a promising concept and there are many attempts to utilize it to provide funding for the company without the need for ads and selling user data while also providing the services free for users (or like in case of Steemit users can also make some money of it as well).
Blockchain is promising for publishing sites, even more so than freemium model as a publication's influence comes from the number of their readers and restricting access behind a paywall doesn't help in that. Although great advancement has been made in the technology it still has some way to go. Steem offers Smart Media Tokens and has made it super accessible, but the biggest downside here is that you need to create your own token or are dependent on other crypto currencies which can be quiet volatile in its value. Also if you want to expand this to general users you are currently going to hit a wall as majority still has no clue what it is about, except that they want to become Bitcoin millionaire.
The underlying benefit of these two systems is that they don't require gathering of personal data beyond the bare minimum. Hence any personal data that would be gathered would be strictly for the works of the site.
To compare
Ads
- Requires gathering of a lot of personal data (tracking users everywhere)
+ Can make lot of $$$ on ads and selling personal data
- Data breaches are very dangerous to your users and your PR image
Subscription
+ Great for services that keep on developing product
Blockchain
+ Versatile (can even make money for users)
- Not easy to implement
So what did I forget?
This has been a bit of a rant. I'm sure that I missed other options. With the belated interest of users about their privacy what is the best way forward for publishing and SaaS sites that will ensure revenue flow? For SaaS it seems to be subscription model. Publishing has it much harder. And with all of that will that help increase security for personal data as there won't be as much out there, or do we need something like GDPR worldwide?