I’m currently attending a very dynamic entrepreneur conference in Barcelona, and one thing that stands out among entrepreneurs and investors is that everybody is feeling the onslaught on people’s right to privacy. Interestingly, there is a counter-reaction to the onslaught, which is that people have started to pay real money in recent years – the last decade or so – for the ability to stay private. This trend and counter-trend are both expected to accelerate, both the onslaught on privacy, and the counter-reaction that people take active steps to protect themselves – including paying for services that protect them.
This is highly remarkable in itself. In a world where the entire old guard is complaining over spoiled brats who will never pay for anything at all online, it turns out the old guard just didn’t provide anything valuable enough to make people want to pay for it. And as any entrepreneur knows, if you can’t make your prospective customers want to pay for your product or service, you don’t have a business. No excuses, no ifs, no buts.
In particular, these cries have come from the self-titled “content industry”, roughly divided into the copyright industry (entertainment) and the oldmedia industry (TV, radio, newspapers). Oldmedia have become increasingly advertising-funded, and are experimenting with paywalls, but with the old income structures gone forever, to quote a Swedish saying, you have to let the food sack set rules for the mouth. At the same time, the oldmedia industry’s advertising has become increasingly invasive, tracking us from site to site in ways that are completely not-okay as we go about our day.
The copyright industry is a different beast. People have been telling them upfront and in cleartext for at least two decades what they want and what they are prepared to pay for, and the copyright industry has shrugged it off with a “that’s not what we do” at best, continuing to push a non-wanted product or service and then blaming business failure on piracy. This is remarkable arrogance, as most potential customers have been paying a very high price for music, movies, and other entertainment – climbing steep technical learning curves and enduring terrible user experiences with file-sharing systems to get what they want, and this very real cost (in time and frustration) has more than often been way higher than a reasonable monetary cost. But with the copyright industry so transfixed on entitlement of the old ways, despite customers being easy to satisfy by setting a monetary price point of convenience lower than the frustration price point of today, another industry may fill the entertainment needs of the future.
(Today, the offering from the copyright industry online – with technical hurdles and the result once you get past them – is even worse than the offering provided by file sharers. You have to be really, really inept at business to accomplish that.)
Meanwhile, it turns out that the online generation isn’t rejecting the concept of paying for services online at all – they are only rejecting the notion of paying for worthless garbage. This isn’t too unreasonable. In the meantime, as privacy becomes an increasingly coveted feeling and privacy services become increasingly friendly, my takeaway from the entrepreneur conference was a general feeling among the audience that kind of company was something investors were looking closer at.
There are good for-free privacy alternatives as well, of course. TOR is one of the most well-known ones, but TOR still comes with a cost in the form of a technical learning curve. Still, it remains one of very few technologies that the Stasi agencies of today haven’t broken. In contrast, technologies that were once considered safe such as Skype now have a saying to them among activists in trouble zones – “Skype: use once, die once.” For some, privacy is more than a convenience, it’s a matter of life and death.
So the privacy industry – if one can speak of such a thing in this kind of nascency – have succeeded where the copyright industry and the oldmedia industry have utterly failed: they have identified something that the net generation genuinely values and wants to pay for.
That’s the starting point for anything worth calling a business.