The most celebrated side effect of the Internet is that it is free. We have become accustomed to receiving much for nothing or for very little. No one likes to pay for something that you can get for free, but cheap can turn out to be expensive.
The Internet has become the main precursor of services at no cost. Before the gift of small samples of a product was called sampling; now the term freemium or trials seems more appropriate. A few years ago, a product was given as a gift in order to evaluate it. Today, a simple registration involves providing information. Social networking is the best example of services received without a monetary exchange; however, they are also the most expensive.
Nothing in life is free, and although it may appear that a service provides a personal benefit, in the long run it is more expensive. I will try to explain my reasons, but in the end it will be the readers who will dictate the final judgment.
Services that are provided free-of-charge must generate revenue in some way, and what is interesting is that consumers rarely see it. The most common is to use an application or website for free in exchange for receiving incessant commercial messages. The advertising model for content sites is printed in the mind of the consumer: The use of advertising to gather funds is one of the most logical ways. To receive a service from a free social network, the user succumbs to advertising, but it doesn’t stop there.
Everything costs, even a little.Social networks, Twitter, Facebook, Instagram or YouTube, to mention a few, receive funds from the sale of advertising, from investors or from their shares in the stock market. They also collect money for researching our behavior, i.e., navigation patterns, data mining or content. More than once I have asked conference attendees, who uses Facebook? When the majority raises their hand, my next question is, who would pay for this service? Almost everyone puts their hand down. The answer is particularly striking, because every day we pay with our information. A similar phenomenon is found with Whatsapp, a service that became the best example of what a consumer believes is free. Facebook paid approximately 16,000 million dollars for the purchase of this messaging service, a sum that was made possible by the large number of users. If you think carefully, we see that a million dollar sum was paid by the world’s largest mobile phone book. What did the consumer win at the end? Nothing. But simply browse the Facebook Service Policy to better understand the problem: “For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: You grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License).” Google Plus, Twitter and YouTube have similar clauses.
I do not think what Facebook and the other social networks are doing is wrong. We would expect that level of care (when was the last time Facebook service failed?) to be paid with something that is very valuable, in this case, our content and our privacy. One of the main rules that mothers teach their children is to not talk to strangers or give out personal information to strangers. Are we not doing the same thing when using free services without reading the fine print? Almost all Internet service requires that you give up some privacy. The problem is to establish limits for such effect.
The Vanguard of ConsumptionPaying for a service, in cash, is a forgotten exercise, but it gives special power to the consumer. If a Coca Cola soft drink is flat and has no fizz, we simply return it to the store. If we had not paid for it, the most efficient solution would be to throw the product away. The same is true with word processors and presentation creators. It is great that Keynote, Pages and Numbers by Apple are free; however, as there is little incentive for Apple to innovate, its market is the result of not charging. It is true that many benefit, but it is worth asking, what are we giving up in return?
In the coming years, Internet users will be faced with a new scenario. It will not be the deflation of the cost of goods and services of intellectual property (music for 10 pesos), but rather we will now have services that return our privacy in exchange for monthly payments. A new generation of consumers will prefer to pay for remaining (more or less) anonymous. What kind of consumer will you be??
The Real Cost of Social Media
The most celebrated side effect of the Internet is that it is free. We have become accustomed to receiving much for nothing or for very little. No one likes to pay for something that you can get for free, but cheap can turn out to be expensive.
The Internet has become the main precursor of services at no cost. Before the gift of small samples of a product was called sampling; now the term freemium or trials seems more appropriate. A few years ago, a product was given as a gift in order to evaluate it. Today, a simple registration involves providing information. Social networking is the best example of services received without a monetary exchange; however, they are also the most expensive.
Nothing in life is free, and although it may appear that a service provides a personal benefit, in the long run it is more expensive. I will try to explain my reasons, but in the end it will be the readers who will dictate the final judgment.
Services that are provided free-of-charge must generate revenue in some way, and what is interesting is that consumers rarely see it. The most common is to use an application or website for free in exchange for receiving incessant commercial messages. The advertising model for content sites is printed in the mind of the consumer: The use of advertising to gather funds is one of the most logical ways. To receive a service from a free social network, the user succumbs to advertising, but it doesn’t stop there.
Everything costs, even a little.Social networks, Twitter, Facebook, Instagram or YouTube, to mention a few, receive funds from the sale of advertising, from investors or from their shares in the stock market. They also collect money for researching our behavior, i.e., navigation patterns, data mining or content. More than once I have asked conference attendees, who uses Facebook? When the majority raises their hand, my next question is, who would pay for this service? Almost everyone puts their hand down. The answer is particularly striking, because every day we pay with our information. A similar phenomenon is found with Whatsapp, a service that became the best example of what a consumer believes is free. Facebook paid approximately 16,000 million dollars for the purchase of this messaging service, a sum that was made possible by the large number of users. If you think carefully, we see that a million dollar sum was paid by the world’s largest mobile phone book. What did the consumer win at the end? Nothing. But simply browse the Facebook Service Policy to better understand the problem: “For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: You grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License).” Google Plus, Twitter and YouTube have similar clauses.
I do not think what Facebook and the other social networks are doing is wrong. We would expect that level of care (when was the last time Facebook service failed?) to be paid with something that is very valuable, in this case, our content and our privacy. One of the main rules that mothers teach their children is to not talk to strangers or give out personal information to strangers. Are we not doing the same thing when using free services without reading the fine print? Almost all Internet service requires that you give up some privacy. The problem is to establish limits for such effect.
The Vanguard of ConsumptionPaying for a service, in cash, is a forgotten exercise, but it gives special power to the consumer. If a Coca Cola soft drink is flat and has no fizz, we simply return it to the store. If we had not paid for it, the most efficient solution would be to throw the product away. The same is true with word processors and presentation creators. It is great that Keynote, Pages and Numbers by Apple are free; however, as there is little incentive for Apple to innovate, its market is the result of not charging. It is true that many benefit, but it is worth asking, what are we giving up in return?
In the coming years, Internet users will be faced with a new scenario. It will not be the deflation of the cost of goods and services of intellectual property (music for 10 pesos), but rather we will now have services that return our privacy in exchange for monthly payments. A new generation of consumers will prefer to pay for remaining (more or less) anonymous. What kind of consumer will you be??