Once More With Feeling: Paid Software Doesn't Mean A Company Treats You Any Better Than Free Software
from the kill-this-myth dept
And yet... we're still seeing people arguing this. The latest is from Alexis Madrigal at The Atlantic -- someone I tend to agree with more often than not. But, this time he falls into that same simplistic argument without thinking through what he's saying. The post complains about Instagram's overhyped plan to change its terms of service, meaning that your photos might be associated with advertisements (which they later backtracked), and then quotes someone's silly, misleading and inaccurate "chart" about why only companies that make money directly from users should survive, and then assumes that all of that is true:
Of course, this is silly, top down math that never works. Here's what would actually happen in the scenario described above. If Instagram started charging $5/month, within two months, the vast majority of those 100 million users would have moved on to another competing service that does essentially the same thing for free. While I'm sure that some percentage (way, way, way, way, way below the 20% that he posits) would pay, the value for them would actually decrease since so many fewer people would be using Instagram. And, before too long, they would stop paying, because all their friends were using some other free service that does the same basic thing. And getting much more value out of it.
Truly, the only way to get around the privacy problems inherent in advertising-supported social networks is to pay for services that we value. It's amazing what power we gain in becoming paying customers instead of the product being sold.
Instagram has, what, 100 million users? If they got $5 a month from 20 million of those users, they'd be looking at $300 million in quarterly revenue. That's a nice chunk of change when you have a baker's dozen employees. You think those guys could split more than a billion dollars a year and call it good.
Yes, there are some services worth paying for, but it's ridiculous for people (especially those as knowledgeable and thoughtful as Madrigal) to fall for this silly claim that somehow "paid" online services automatically function better and treat users better than unpaid services.