Why you want to pay to use Facebook

by The Augustan on 12/29/2013

When you buy a product or service from a business, you become the customer. Being the customer means that businesses are responsive to you. Their success is based on your approval of what they are offering. To some degree, the customer has control over the companies that they patronize. That is the natural balance of commerce. Social media companies such as Facebook and many others have a unique business model: They offer a free service that a lot of people want to use and then try to figure out how to monetize it.

Once a brand has accumulated a huge pool of people using their service for free, how do they monetize it? In every business model, there must be a customer. For social media brands, the customer is advertisers. Facebook and many others are not in the social connection business; they are in the advertising business. The potential problem with Facebook’s users not being their customers is simple: The temptation of privacy infringement. Either we are the customer or we are the product. In the case of Facebook and other social media sites, we, the users, are the product. We are being “sold” to the customer, the advertisers. Privacy issues will always arise when the customer is the advertiser because the only way to improve services for advertisers is to provide more detailed information about consumers. It is not enough for social media companies to sell advertisers mere quantities of people; they have to sell specifics. Advertisers want to ensure that every dollar that they spend is going to penetrate their target audience.

As a result, those “Terms of Service” agreements that no one ever reads are going to become more and more intrusive.

Having your personal information sold to advertisers is not necessarily a bad thing. However, the trend of free social media services is leading to a gradual push towards collecting more personal information. Paying $4.99 per month to use Facebook may sound absurd now, but it may not sound as absurd in the wake of a declining user experience saturated with advertisements and solicitations. Or when information that was intended to be kept private is made public without prior consent.

It seems plausible that in the future Facebook will offer its users the ability to purchase items directly from their advertisers on the site. Imagine the implications of a single database full of millions of names, addresses, bank account and credit card numbers.

Does all of this sound far-fetched? Sure. That is, of course, until it happens.

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There are 2 comments in this article:

  1. 12/29/2013David Oliver Doswell says:

    A well-written article that capitalizes on an interesting point: should social media be free? I think the question answers itself. It is called social media. Not private media.

    Let me explain.

    Zuckerberg created the site to rank the “hot girls” in his dorm, I believe, which then led to an online networking site where participants could share information, photos, etc. with each other through a public domain.

    Facebook, essentially an interactive address book for the postmodern age, was a way to stay in touch with friends on a daily basis, and update your current status of what you were doing, where you’ve been or were going, of interest to your “friends.”

    The site was never intended to be a database where advertisers could amass info to sell the participants brands, goods and services. Whether or not Facebook was destined for such a reality given its preponderance, I suppose, is the matter at hand.

    Personally, I prefer Facebook to remain as it is: a social networking site. Facebook is already considered lame and dated by the youth, a site for moms, old people and non-social media types. It is what MySpace became about 8 years ago when FB hit its popularity, when Zuckerberg allowed non-students to access the site. It would be at even greater risk of losing its daily constituency if it began charging them to use it.

    I agree with the structure of your argument concerning business. And I believe that paying for created work at the moment is fair and equal. But making ME a product?

    Beyond my understanding of how and why commerce, the patent anachronism of the coin and capitalism as a model, I feel fundamentally used, wrung, and still dirty by the idea of being a product, especially in such a generally humane concept.

    It is not about privacy. The government can find you if they want you. Privacy concerns in the post-Snowden era are about legality and abuses of power, the sham that is our public image of a good and noble country. My concern with Facebook isn’t that “my information is all over the internet!” Whose isn’t? It is furthering the objectification of ME. I get enough of that from the physical world. FB is a place for friends, not data.

    FB is not a business – until it is. And then I think the people have a choice: pay to be exploited online. Or don’t pay and be exploited offline. Either way, it’s not friendship.

  2. 12/30/2013Robert Hugland says:

    Very thoughtful commentary from the Davids so far. And I think both of you are on the right track when it comes to thinking about new social trends in such a nuanced way. There are a couple facets, however, that I would like to develop further.

    While I agree with the idea that Facebook will cater to advertisers, it’s important not to leave out the shareholders or ourselves as “the product.” The difference between selling Facebook users as a commodity and other sales models is that Facebook also has to please their “product” in order to have a product to sell. So incentives to make Facebook end users happy are still very much in place. The difference is that now Facebook has to balance competing interests of users and advertisers. That will most likely downgrade the user experience.

    David Oliver Doswell makes the great point about MySpace. While Facebook is more entrenched than MySpace ever was, we would be wise to remember how fluid this sector of business can be. It is hardly unthinkable that Facebook could misstep and another platform could take its place.

    As far as paying to use Facebook, if you could convince everyone it might be worth it. But it leads us again back to MySpace and even further to Friendster. Part of what made users of both franchises to jump ship were false rumors that the sites were going to start charging money for their service. The rumor in both cases was that on some TBD date the company would simply lock all profiles and make you pay to access them. People would rather pay with clumsy ads and promoted materials than with a fee.

    The only possibility I see is using a Wikipedia model of soliciting donations to keep the site ad-free. But that would never fly now that FB is a publicly traded company.

    My final point is about direct internet advertising itself. David Walker knows that I have strong views on privacy. I’d rather these companies didn’t have my information. There are many negatives and we hear about them a lot. I think they win when you weigh them against the positives. But we STILL have to weigh the positives. The biggest is that targeted ads based on my interests are much more enjoyable to me as a user than random ads. Occasionally I even find products I want that I might not have heard about otherwise.

    The beauty of the world we live in now, is that in the tech sector, if a company falls short of providing the services people want, someone else will quickly step in to fill that void and provide the unmet demands.

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