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Just so you know, if you’ve spent 50 minutes on Facebook today, you’ve been there shorter than the time spent by the average user of this social network. If you’ve been watching random YouTube content for half an hour, that half hour enters the total sum of one billion hours spent today by people around the world using this service. And if you’ve got an Instagram account, congratulations, you’re one of its 800 million global users, 500 million of whom are active every single day. Lest we forget all the linkedins, tinders, and other apps…
So, how much did you pay for using all these online services? Nothing, because unless you subscribe to some of their super upgrade services, you pay absolutely nothing, because it’s all free of charge.
Now, let’s take a look at all of this from the other side. If you scrolled through Facebook and checked up on your friends and added a comment here and there, this was just one of the 510 thousand posts popping up on this social network every single minute. The video you published to YouTube is merely a drop in the 300 hours of fresh content appearing each minute on this channel. And if you posted an Instagram photo or story, it was one of the 95 million photos and videos uploaded to this platform every single day.
And how much did you make from all your posts? Unless you’re one of the few celebrity influencers, you made nothing, because you did it all free of charge.
In economic terms, this type of business arrangement is called barter deal, because it functions as a trade of sorts. In this specific example, one party enables the use of the services provided by its platforms and digital services, while the other side provides specific content available to all the users of the above services. No monetary transaction takes place between these parties.
The entire process consists of two steps. Step one, all the things that existing users do on the chosen platforms – be it posting images, videos, or texts – is content which attracts other users to join. All of this represents a product on the constantly expanding market, thanks to the ever-increasing number of users. Step two, all the things that users do as consumers of content – searching, viewing images and videos, commenting, liking, disliking – defines their affinities.
And this is where the third step comes in. In this phase, based on our behavior, the owner of the digital platform we’re using uses an algorithm to process these data and create our user profiles, which he then sells to advertisers and retailers. However, this information is no longer free of charge. Advertisers and retailers pay good money for it. And they do it willingly, since targeting buyers like this is much better than using traditional advertising methods where the “spray-and-pray” principle applies. Moreover, that’s exactly why giants like Google, Amazon, and Facebook have such enormous growth rates and profit, which constantly increases their value.
This is now in the domain of market economy. We thus have a product for which buyers are willing to pay a certain price, based on which the adequate turnover and profit are generated. And that’s all right. But it begs the question, since this product is the result of the previously mentioned barter deal, how much is our profit share for all of the hard work we put in typing and clicking, creating the content which sells so well on these platforms?
That’s right, you’ve got it. NOTHING. And this fact clearly demonstrates the true nature of the relationship between the owners of these platforms and their users. In the business agreement we’ve concluded, and which we thought was fair, we’ve been given the tools whose use has actually turned us into the product. And we’ve done it. We’ve become a product sold by someone else, while keeping all the profit to themselves.
Why don’t we demand the cancellation of the existing agreement then, and insist that a new one be concluded, under which we’ll pay for using all these social networks and digital services, but also become entitled to the profit-share based on the sales of algorithm-defined data related to ourselves? This kind of agreement would be fair, but we also know that it’s not realistic right now. The main reason for this lies in the magic words FREE OF CHARGE. These are by no means new words, and they’ve always been attractive, it’s just that now, they’ve become irresistible.
You can read more about why this happened in the sequel to this story, available in a few days, in the same place. And don’t worry – writing and reading that text will be just like writing and reading this one – completely free of charge.