Facebook’s road not taken
I would like to use Facebook more. Without a doubt, there is great utility in a social platform that everyone is on, can be used as a universal identity for logging in or commenting on other sites, etc. But because of their customer-unfriendly privacy practices, I use it rarely and with great caution. I know there are a good many others like me, and I suspect our ranks may be growing.
I know they have no choice — in their current model, if they don’t convince me to share personal data with them and then convince (or trick) me into letting them share it with advertisers, they don’t make any money. But the key phrase here is “in their current model.” Was there a different road Facebook could have taken? I think so.
If Facebook generated revenue from a subscription model, then they would be able to implement privacy practices that users could feel quite confident about. They might not lose that many users and, and they could have more total revenue as well. After all, Facebook only made $9.51 for the entire year in ad revenue per user in the U.S. and Canada 2011! (Globally, it’s only $4.34.) Think about that. I pay Netflix about $17 per month, and in some months I don’t even watch a movie. I pay Hulu Plus $4.95 a month, and don’t think twice. $9.51 is two visits to Starbucks. (And if they could figure out a good “freemium” model, with certain ad-supported base services for free and other attractive ones requiring a subscription, they could have the best of both worlds.)
I think it’s well established that people will pay pretty decent subscription fees for services that offer them value and convenience over time. If Facebook changed their orientation to a service that made the web highly social while protecting my privacy with zeal, I would gladly subscribe for $5 to $10 a month.
They’re not stupid over there in Menlo Park, so I am sure they’ve considered this. Clearly, their thinking is that having hundreds of millions of users at $9.51 of revenue per year, or whatever they think they can grow that to, will be more lucrative than what they could do in a subscription model. I, however, am not so sanguine about their prospects for growing revenue all that much. (We’ll see how I do with this prediction.) I perceive a lot of Facebook fatigue out there, and a lot of that fatigue is the stress and uncertainty of their stewardship of my personal information. Though they’ve built a useful service, I don’t think they’ve built much trust as a brand.
So how about it, Facebook? Would you let me buy my privacy back on a monthly basis?
Categorised as: soapbox