Would you pay to use Face­book?

The so­cial net­work be­he­moth is be­ing pressed by some to con­sider a dif­fer­ent busi­ness model, writes David Pier­son and Tracey Lien.

The Dominion Post - - Front Page -

If you’re not pay­ing for the prod­uct, then you are the prod­uct. That busi­ness-world adage has al­lowed Face­book to thrive, at­tract­ing two bil­lion users who choose to trade their per­sonal in­for­ma­tion for no-cost ac­cess to the world’s largest so­cial net­work.

The data they fork over have proven to be a trea­sure trove for Face­book, which re­lies on the in­for­ma­tion to sell ads tar­geted to spe­cific swaths of users.

But af­ter years of ex­chang­ing their pri­vacy for a free feed of news, ads, fam­ily pho­tos and cat videos, some peo­ple are ques­tion­ing whether they’re ac­tu­ally get­ting a good deal.

With Face­book un­der fire for its mis­han­dling of user data in the wake of the Cam­bridge An­a­lyt­ica scan­dal, the so­cial net­work is be­ing pressed by some to con­sider a dif­fer­ent busi­ness model – one that charges users in­stead of ad­ver­tis­ers and, in turn, is not fu­elled by per­sonal in­for­ma­tion.

Face­book ap­pears to be giv­ing it some thought.

When asked about the pos­si­bil­ity of a paid ser­vice dur­ing Sen­ate tes­ti­mony this week, Face­book chief ex­ec­u­tive Mark Zucker­berg said his com­pany would ‘‘cer­tainly con­sider ideas like that’’.

It’s a pro­posal that is win­ning favour among tech­nol­o­gists. Ap­ple co-founder Steve Woz­niak re­cently told USA To­day that he’d rather pay for Face­book than have his per­sonal in­for­ma­tion ex­ploited for ad­ver­tis­ing.

‘‘Users pro­vide ev­ery de­tail of their life to Face­book and... Face­book makes a lot of ad­ver­tis­ing money off this,’’ Woz­niak said. ‘‘The prof­its are all based on the user’s info, but the users get none of the prof­its back.’’

A re­cent sur­vey con­ducted by Re­code and mar­ket re­search firm Tol­una found that 23 per cent of re­spon­dents said they’d be will­ing to pay to use a ver­sion of Face­book that had no ads.

Of those re­spon­dents, 41.6 per cent said they’d be will­ing to pay be­tween US$1 to US$5 per month. The re­main­der said they would be will­ing to pay more.

Sub­scrip­tion com­pa­nies were once an anom­aly on the in­ter­net, where the pre­vail­ing wis­dom was that in­for­ma­tion trended to­ward free. But in re­cent years, suc­cess­ful on­line com­pa­nies that built their empires on free con­tent sup­ported by ad­ver­tis­ing have also been ex­plor­ing pay mod­els.

The gen­eral strat­egy has been to charge for spe­cial fea­tures, so users feel like they’re get­ting some­thing ex­tra for their money.

YouTube is avail­able for free, but those who pay can lose the ads and get ex­clu­sive con­tent. Spo­tify lets peo­ple lis­ten to mu­sic for free, but the paid ver­sion cuts out ads and give them more con­trol over how they lis­ten to mu­sic. LinkedIn, the so­cial net­work for job-seek­ers, lets pay­ing users see who has viewed their pro­file.

Though con­sumers have been will­ing to sub­scribe to some on­line ser­vices, so­cial me­dia ex­perts say when it comes to firms like Face­book – which has been free since its launch and whose ads can eas­ily be scrolled past – a pay model is un­likely to catch on.

That’s be­cause the core func­tion of Face­book – con­nect­ing peo­ple – is some­thing that can be done else­where with­out hav­ing to pay. The so­cial net­work could tack on ex­tra fea­tures, but so­cial me­dia ex­perts are un­sure what fea­tures would com­pel a user to fork over cash.

And re­searchers re­main un­con­vinced that many peo­ple would opt to pay sim­ply for their pri­vacy – even as they pay lip ser­vice to it.

‘‘The whole fan­tasy that peo­ple care about pri­vacy or they’re des­per­ate to get out of adsup­ported net­works is ridicu­lous,’’ said Clay Shirky, a re­searcher on the so­cial and eco­nomic ef­fects of in­ter­net tech­nolo­gies at New York Uni­ver­sity.

Sim­ply put, the ma­jor­ity of so­cial me­dia users ei­ther don’t re­ally un­der­stand – or don’t care – how their in­for­ma­tion is col­lected and used, said Ryan Detert, chief ex­ec­u­tive of In­flu­en­tial, a Los An­ge­les start-up that uses ar­ti­fi­cial in­tel­li­gence to match ad­ver­tis­ers with so­cial me­dia in­flu­encers.

‘‘The big­gest grow­ing seg­ment for these so­cial me­dia plat­forms is the youth, and they grew up with this, so they know all their data is be­ing col­lected, and they know they don’t have pri­vacy,’’ said Detert. ‘‘I’m on the older side of Mil­len­nial and even I don’t par­tic­u­larly care whether some­one has my data. If you’re Gen-Z, you re­ally don’t care.’’

There can of­ten be a dis­con­nect be­tween the be­hav­iours con­sumers as­pire to­ward – say, tak­ing ex­tra steps to pro­tect their pri­vacy – and what they ac­tu­ally do.

‘‘I’ve been cov­er­ing con­sumer at­ti­tudes and be­hav­iours for a long time, and I don’t see con­sumers chang­ing their be­hav­iour very of­ten,’’ said Fate­meh Khat­i­bloo, an an­a­lyst at For­rester Re­search.

‘‘They might take a few steps here and there, they might go through and change some per­mis­sions, but we’re talk­ing about two bil­lion users. You’re not go­ing to make a dent in that.’’

Zucker­berg made it clear in his Capi­tol Hill tes­ti­mony that ‘‘there will al­ways be a ver­sion of Face­book that is free’’.

That means if Face­book were to es­tab­lish a sub­scrip­tion ser­vice, there would be a two-tiered sys­tem where some pay for pri­vacy and oth­ers pay with their data.

That struc­ture could, on the one hand, end up dis­ad­van­tag­ing less af­flu­ent users while si­mul­ta­ne­ously al­low­ing wealth­ier con­sumers – the ones ad­ver­tis­ers might be most ea­ger to court – to by­pass ads al­to­gether.

Then there are the tech­ni­cal chal­lenges.

If a user who pays not to be tracked in­ter­acts with a user on the free plat­form, the sub­scriber’s data would likely be swept up too, Khat­i­bloo said. And could Face­book guar­an­tee that it wasn’t track­ing pay­ing users on other parts of the in­ter­net?

Per­haps the main rea­son so­cial me­dia com­pa­nies haven’t tried pay mod­els is be­cause the adsup­ported busi­ness has made them be­he­moths.

‘‘Why is the ad­ver­tis­ing-based sys­tem so dom­i­nant? Be­cause it works for the com­pa­nies, it works for the ad­ver­tis­ers and it works for con­sumers,’’ said Dan Jaffe, ex­ec­u­tive vice-pres­i­dent of pol­icy for the As­so­ci­a­tion of Na­tional Ad­ver­tis­ers.

Face­book’s crit­ics have long said the com­pany’s har­vest­ing of per­sonal in­for­ma­tion makes it a sin­gu­lar dan­ger to dig­i­tal pri­vacy. But that is pre­cisely why Face­book is one of the most valu­able com­pa­nies in the world.

That means any move­ment away from a data-driven busi­ness could un­der­mine its suc­cess.

‘‘(Face­book) is sit­ting on one of the rich­est, most lon­gi­tu­di­nal, quan­ti­ta­tive data sets we’ve ever seen,’’ said Khat­i­bloo. ‘‘They’re not go­ing to give that up eas­ily.’’

AN­DREW HARNIK/AP

Face­book chief ex­ec­u­tive Mark Zucker­berg faced a joint hear­ing of the Com­merce and Ju­di­ciary Com­mit­tees on Capi­tol Hill in Wash­ing­ton, DC.

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