Stop Saying 'If You're Not Paying, You're The Product'

from the there-are-more-options dept

We just wrote about how silly it is to argue that companies you pay for their services or software somehow treat you better or are more "aligned" with user interests than those who give you products and services for free. When you dig in on the subject, such claims don't make any sense. In both cases, companies have some alignment with users -- because without users, they're nothing -- and some alignment with trying to make themselves money. And sometimes those two alignments conflict, whether or not the user is paying directly.

Derek Powazek (random trivia: whose work inspired me to learn how to create a web page back around 1995 or 1996 or so) has an excellent take on the pithy and dismissive phrase that many often use to argue that free services treat users worse:
"If you're not paying for the product, you are the product."
It's pithy and clever... and wrong. Powazek dismantles the claim eloquently. He attacks the underlying assumptions in that statement. He highlights that "free with advertising" has been a pretty big business for a long long time, in which there's no indication that users were treated as "the product" or somehow treated poorly. And then there's the key one: this is not an either/or situation:

I’ve worked for, and even run, many companies in the last 20 years with various business models. Some provided something free in an attempt to build an audience large enough to sell advertising, some charged customers directly, and some did a combination of both. All treated their users with varying levels of respect. There was no correlation between how much money users paid and how well they were treated.

For example, at JPG Magazine we sold something to our audience (magazines, subscriptions, and ultimately other digital services) and we also sold ads and sponsorships (online and in print). We made it 100% clear to our members that their photos always belonged to them, and we had strict rules for what advertisers could do in the magazine. We also paid our members for the privilege of including their photos in the printed magazine (as opposed to Instagram’s new policy that they can use your photos however they want, even in ads, without paying you a dime).

This example is much more complicated than the black and white “you’re the product” logic allows. In some cases, users got the service for free. In others, they paid us to get the magazine. In still others, we paid them! So who/what is the product?

And just because you pay doesn’t mean you’re not the product. Cable TV companies take our money and sell us to the channels, magazines take our money and still sell ads, banks and credit cards charge us money for the service of having our money. Any store that has a “loyalty card” takes our money for products but gives us a discount in exchange for the ability to monitor what we buy. In the real world, we routinely become “the product” even when we’re already paying.

He also points out, as I have many times, that there are plenty of companies whose services you pay for who treat their users atrociously. And then points out what many of us have been arguing all along: there are all sorts of business models online. Some work in some cases, others work in other cases. But to argue that "free" services mean you're "the product" and thus not treated as well, simply isn't an accurate or realistic statement. So can we please agree to kill it?

Filed Under: customer service, free, internet business models, paid, product, users


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  1. identicon
    Luca, 19 Feb 2013 @ 7:35am

    Wrong.

    You've misunderstood the phrase.

    It doesn't mean you get treated better when you pay, it implies that no one does anything for free.

    Facebook allows free use because it gets advertising from basically all aspects. This is what it means. Unless you're paying, you're basically just earning them money.

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