Since its inception, Facebook’s motto has been “free and always will be.” But how much would users have to drop if they were forced to pay their worth? Ryan Brodie examines both sides.
A campaign proclaiming that Facebook were planning an abrupt pay-wall emerged a few years back. To the relief of many, the rumours were quashed. But why was everyone so relieved? How can a company with staff of over three thousand and an infrastructure that has cost hundreds of millions of dollars possibly afford to stay so blissfully free?
Instead of charging you, they sold you.
In the early days of a start-up, the goal is momentum and not revenue. Investors commonly have the mentality of “gain users first, worry about income later”. But funding can only go so far; eventually investors need to see a return. Instead of selling to the likes of Google or Microsoft, Facebook chose to monetize. Mark Zuckerburg wanted to build a lasting company and would do so with the first socially enabled advertising platform. The relevance of an advertisement to its audience determines its value. The more advanced and specific the targeting, the more likely a successful conversion will be made.
Facebook knows an awful lot about you. It knows when you were born, who your family are, what school or university you attended, your first and current job, your partner or spouse, where you’re from and where you’re currently living. But it goes so much further than this. It knows your interests, not just from the pages you’ve liked but from the words you’ve written anywhere within its walls. It knows how you move around, your planned career, where you like to eat and the music you listen to.
And now with the Open Graph, it can understand every action you take in your life. From reading a book to cooking a meal, Facebook can now record it chronologically onto a neat and orderly timeline that represents your entire life. This silo of information is a technological marvel, but we don’t own it, they do, and they’re actively selling it right under our noses.
The Facebook user experience is now littered with ads, yet most are unaware of this somewhat blatant intrusion. Such ads employ social reinforcement (showing users their friends names and pictures alongside them) to supercharge their advanced targeting. And this cocktail works; Facebook generated $3.7b in revenue last year. But should it be this way? Should the Internet applications that empower and enrich our lives be free?
Facebook is great at connecting us with our friends and family, but enabling this safe sharing is no longer their incentive or their motivation. It’s a big conflict: users are now encouraged to share more publicly, not to increase openness but to further both ad specificity and profitability. If we paid for this service, we’d own the information that filled it. We’d be bound by a software licensing agreement and would solely be in control. It wouldn’t cost a huge amount either, Facebook reportedly make just under £3.10 per user per year.
It may seem an unlikely scenario, but a new service is doing exactly that. By charging their users annually, App.net guarantees full control of the data they collect. It far exceeded its goal of $500,000 worth of public backing in the middle of August with a healthy $800,000 pledged. It’s a nice idea, but right now its 12,000 users are only those in the frontier of the technology industry. For it to catch on, real everyday consumers must back it en masse. And that’s something that will never happen.
The sad inevitability is that even if Facebook charged the nominal, required monthly amount of 25p, the majority of its 900 million users would never pay. In a survey carried out by The Huffington Post, 83% of users said they would never pay for a Facebook account.
Simply, society in 2012 expects digital content to be free. It is hard to envision a world where App.net is even a 10th the size of Facebook, but there are other monetisation models.
A “Freemium” system offers limited functionality at no charge, but allows those that are willing to pay to gain access to extended features. It’s an approach adopted by the likes of Flickr, Soundcloud, and Dropbox. This revenue distribution allows companies to remain profitable and still have the inclusivity and accessibility that comes with a free service, even without ads.
An alternative model (adopted by specialist services such as SendGrid, a bulk email sending application) is a developer funded Application Programming Interface, otherwise known as an API. API’s allow developers to integrate other services into their own (Like/Tweet buttons, “Sign in with Twitter” etc.). A framework that is device agnostic and requires developers to build and sell applications that interface with it could have worked for Facebook, just as it did for 3rd party Twitter clients. The difference is, access to such an API would be charged.
Although these fairer and more sustainable models exist, such restrictions would have needed to be integral to Facebook from the get-go to avoid the foreseeable protest. Ownership of our shared content therefore is a sacrifice we’ll continue to omit for the false benefits of free. That is unless society decides to take back the reins and return to the responsible economics of industries past.