> "It is implied that when you pay, you are the customer, and when it's ad-supported you're the product instead."
This meme needs to die. It implies a dividing line where none exists. There is absolutely no reason why you can't end up being both a paying user of a product and have data about you sold on, aggregated etc. If a company can find a way to get paid twice, why wouldn't they do so?
The meme maybe a cliche but it's true. For a for-profit company, there are 4 outcomes :
- Paid without ads : Whatsapp till now. Ideal for personal privacy
- Paid with ads : Bad for users. If whatsapp was doing this, it won't stay hidden for long. The breadcrumbs of your data will lead to whatsapp's door.
- Free without ads : Bad for company
- Free with ads : Facebook. Bad for some, good for others.
Point being, respectable companies that are in for the long run will probably have a clearly defined business plan i.e. sell the product to the user or sell ads to the user. If it's doing both, it becomes evident.
No, it is false and that's why it needs to die. It prevents a wider discussion about business models and leads to (imho) ridiculously oversimplified views that are restricted to advertising and only within the product in question. In the worst case, people may use the heuristic that paying for something somehow gives you a voice (it doesn't) or prevents a company from productizing you (it doesn't).
For example, consider the following cases:
- Google Apps: I may be paying an annual/monthly fee for using Google's services but does that mean they will stop mining all my data and trying to show me 'relevant' ads elsewhere on the internet? Just because they have a new revenue stream doesn't mean their other revenue models stop working.
- Credit cards companies: I'm probably paying fees and interest for my card but that data is still sold on to others for various purposes, including reference agencies and perhaps aggregate info on spending habits. I've seen at least a couple of stories on HN about companies willing to sell such data.
- Tom Tom: I pay for a navigation device which also provides me with traffic data. Data from my journey is also sent back to Tom Tom, aggregated and licensed on to external companies who want access to it. Note that I've already paid for a product, may be paying an additional subscription for traffic data and yet every journey I make is also a revenue generator for them.
It's only big companies that can afford to pursue multiple revenue streams this way but people are woefully naive if they think a well-resourced company won't explore all the ways they could increase their income.
Here's my reformulation of that meme: You are both the customer and the product.
Thank you. That's exactly the point I was trying to make.
The reality is nuanced and the 'free app, you are the product' only overlaps with it only occasionally. (a) Showing you ads isn't the most worrying type of data collection (b) Not showing you ads or charging for something doesn't mean data is not being collected about you in a worrying way.
Whatsapp's business model was neither selling ads or selling apps. It was sell Whatsapp. The "product" was the company, especially the data and the employees (If you're getting paid in stock, you are the product!). If that hadn't worked out they may have gone to plan B or plan C, but IMO that just makes the point that the data is in their hands and their business model can change. They might go into liquidation and have the data auctioned.
If Whatsapp is indeed worth all that money it's worth it for the data it has and can collect. That makes me uneasy.
"You are both the customer and the product" - that's oversimplified as well. You've just put FB, Google, Credit Cards & Whatsapp in the same bucket. That ain't right either.
There's overlap between being a customer & being the product. But the range is so wide that there's no harm in simplifying it by saying FB makes you the product & Whatsapp (pre-acquisition) is the product.
Well, since facebook obviously bought Whatsapp for the userbase, I think it's quite clear that that's exactly what the users were, though in a longer-term strategy.
This meme needs to be shouted from the mountaintops until everybody understands it. Indeed you are correct- a company can be pure evil and charge you for wrecking your privacy. But if the app is free, that's all they can do and it's pretty obvious they are going to do it. If they are charging you for the product, there is at least some hope that they won't, and if they do, they have crossed a moral line- in the same sense as someone selling your email address.
Nonsense. The problem is that it is not harmful enough to those who wish to operate a business by taking advantage of others' ignorance.
In a fair business transaction both sides understand the implications of said transaction. In this type, one is vastly more aware of what is being collected and how it may be used than the other.
It's like being tricked/coerced into giving up the mineral rights to your property because you don't understand the value. Or domain name squatting.
Oh, I know. "It's just business." So that makes it ok.
They have iAd so they've put themselves in the advertising game. The systemic issue with advertising is the desire to extract as much information as possible, in order to better target those ads and help their customers (those paying for the ads) to make a return.
It remains to be seen how much influence the Ad folks in Apple will have over the rest of the iOS/iPhone ecosystem. In the short term, I doubt there's much to worry about but in the long term, and if iAds become a significant revenue driver, who knows.
This meme needs to die. It implies a dividing line where none exists. There is absolutely no reason why you can't end up being both a paying user of a product and have data about you sold on, aggregated etc. If a company can find a way to get paid twice, why wouldn't they do so?