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Nothing is Free, Privacy is an Illusion

A series of recent online conversations, published articles and broadcast news led to this short post, which might give some folks something to think about. Or, maybe you will stop reading after the first few words. This post is also about online properties, such as Fprivacyacebook, Twitter and local providers like Front Porch Forum, where data and information are traded for a service. This is not always a direct trade, there are sometimes 3rd parties involved, but if you see advertising, there is a trade, guaranteed. The key point is that these services need to be transparent about how their business is designed. Do you really understand the terms of service?

If you are not the Customer, you are the Product

I did not come up with this statement, if I knew the original source, I would certain give proper attribution. The truth is, it is hard to dispute. Certain elements are very clear,  companies who advertise on Front Porch Forum (FPF) are absolutely their customers; they pay money so members (email recipients, pseudo-customers) will see the offer contained within the emails. Thus, the product that FPF is actually selling to its customers is a person reading the advertisement. The value that they provide to members is outlined on their website, connections to neighbors.

Do not get me wrong, there is value in this endeavor. While the idea of creating community is a good one, the fact remains that the more emails sent, the more members in the system, the greater the value to advertisers (hint: this is why Neilsen ratings are so important for TV viewership). The business model is clear, a for-profit enterprise that is advertising based; more eyeballs, more money. This does beg the question, why are donations requested? Is the model flawed?

If I am the Product, can I make money here?

One question that comes to mind, to kick off this discussion, is whether privacy is a right or a preference. For example, if it is my preference to be used as a ‘face in the crowd’ an image, a blog post, whatever, should I be allowed to request payment? In the case where Tax dollars are being used to create something, should the rules be different, or the same? It is called the right of publicity and a recent Mashable article is full of some really interesting points regarding the monetization of personal data and likenesses. One of my favorite authors on the topic is Doc Searls (Cluetrain fame and a great guy to talk to!) The following is a quote from the Mashable article, part direct quote of Doc part interpretation:

“…the current Internet economy is built largely on contracts of adhesion, referring to a legally binding agreement where one side has all the bargaining power, thus, an advantage over the other. This “take it or leave it” bias toward agreements is how we’ve been trained to accept most of the services we use today. While these aren’t illegal, they also aren’t transparent. And these types of relationships don’t provide a realistic model for an environment where everyone has the right to monetize his identity because of his right to publicity.”

In the end, it is about transparency, true representations of how a company makes money, how they charge their customers, and their financial model – ESPECIALLY if they are asking for donations of money when they are a for-profit entity. Would you donate money to Facebook? Nah, I did not think so.

(* Note, Seven Days has a very interesting article about the censorship element of Front Porch Forum, which you might want to take a look at, as well)

Comments on this entry are closed.

  • Thomas Wieberneit November 6, 2013, 6:20 AM

    Hi Mitch,

    A good one by you again. Waited too long for it, seriously.

    Imo what currently happens in the Internet is only the extension of one fundamental flaw in (neo)liberalism: all parties are created with equal bargaining powers. They aren’t. Or have you ever been able to change the terms of your home insurance, international money transfer, mortgage, … Significantly into your favor?

    Yes, it is about transparency, but ultimately also about needs. And as long as some needs are more urgent (not necessarily important) than others, like the need to make the other consumption being more important than the need for (data) privacy this fundamental assumption is not valid (what doest this tell us about the economics theory behind?)

    While “contracts based upon this premise and theory might not describe a realistic model of an environment they build the foundation for the effective fondation of our very environment (whether we like it or not – and can it be changed from a David position?).

    Effectively I, too, donate to FB And Twitter, just by “being there” once in a while.

    The question that I cannot answer yet is: how to make it a win-win instead of a win-loose that it is now? My company’s business model tries to be one. Is it? I think so. Will it make a difference? Time will tell …

    Has anybody the real answer to it?

    Cheers
    Thomas