Blog Post

Can privacy be a premium service?

Time and privacy are two aspects of our modern lives that are in short supply. The constant distractions of modern communications have placed increased demands on our time. And similarly, as we do more things on the web, we leave our footprints in the sand, sacrificing our privacy in micro-chunks: be it surfing on the web, or simply conducting searches on Google.

Time and its management are highly personal issues, but when it comes to privacy, the chinks outweigh the average person’s capabilities. And that prompted me to as the question: can privacy be offered as a value-added (premium) service by carriers and web service operators such as Google.

There are those who fret about the Government snooping into our lives. Yet, at the same time, we are all happily sacrificing a little but of our privacy every day in the name of cool or convenience. Take, the new friend-finding service on Sprint Nextel (powered by Loopt) as an example. The Wall Street Journal reports that such location-based services now account for one third of US carriers’ application-related revenues, ahead of sports and music.

And that’s not all. The hot new trend of personal broadcasting (or neo-modern narcissism) only exacerbates the problem. From photos uploaded to Flickr, location-based services announcing our presence, alert services like Twitter and Pownce acting as nano-thought transmitters, videocasting via Kyte, or just plain old Facebook – it seems in this post-broadband world, everyone is happy to share everything.

This might seem as the final deliverance on the promise of the two-way web, but this upload-and-share philosophy comes with some baggage. While in the past it was your emails that could get you into trouble (Bill Gates would agree), now there are many more ways to get busted.

Only last week we had the quirky WholeFoods CEO whose “anonymous” self promotion has gotten him into trouble, lately with SEC. There was the whole fracas about Plazes CEO who skipped a conference, making an excuse, only to broadcast his location from another city. And now, The Times of London is reporting how Oxford University proctors got hold of photos of wild celebrations from the Facebook, and fined the rowdy students.

The tragicomic-sensationalist headlines not withstanding, as the shift to online interactions gathers momentum, we might find our lives more exposed than ever before. If not today, but soon enough, we might be willing to pay to protect the privacy, and erase the digital footprints we are leaving behind.

The search engine giants – Ask, Yahoo, Microsoft and to some extent Google – have started to put privacy protection procedures in place, but they are meaningless. At least three of them will be keeping our search data for a year – which is too long. For a nominal fee of say a $1 a month, they should offer us ability to erase our search behavior every week.

Similarly, web services could use better privacy as a distinguishing factor. After all if all social networks are going to be platforms, I should ideally opt for one that protects and respects my privacy. Other web services could follow – turn privacy into an opportunity for making money.

21 Responses to “Can privacy be a premium service?”

  1. Scott Germaise

    Privacy is already a premium service in some areas. Every time someone uses a supermarket loyalty card, they give up purchase information to get whatever the special discounts are. Anyone not using the card pays more.

    Every time someone uses a web site, some information is collected. Anyone who pays for anonymizer software of services gives up less information, but pays.

    Every time someone clicks with their DVR remote, they’re giving up information when their television usage behavior gets uploaded. Those without such services don’t pay in dollars, but they would do without such services.

    In these cases, those concerned enough with privacy are the tiniest slice of the consumer population. Right now, there’s a lot of vocalizing going on, but not a whole lot of the general population really understands the issue beyond the idea of identity theft. So they’re really not behaving any differently.

    A lot of these ideas are actually well explored by Jeffrey Rosen, David Brin, to a lesser degree myself and others.

    We are now finally reaching some inflection points where broader concerns are coming to light. It should be interesting to watch and participate in the debate.

  2. Privacy won’t work as a premuim service here for several reasons: first, customers don’t understand the threat, second, companies can market privacy less expensively than delivering technical solutions, and finally, the privacy-concerned are unlikely to believe that the company really implemented privacy for their money.

    (I worked for Austin for three years, and have spent a lot of time thinking about how we were ahead of our time, and what else we might have done better.)

  3. As an entrepreneur who raised $75 million for developing privacy services from 1997 to 2001 I spent almost 10 years working on privacy, anonymity and security services.

    Anyone thinking of looking that the privacy space might be interested in this case study on Zero-Knowledge Systems.

    The company is now called Radialpoint and is very successful in a new business.

    Maybe as Zero-Knowledge Systems we were ahead of our time?

  4. Jesse Kopelman

    I think what Om is really asking is whether anonymity, not privacy, can be a premium service. I think the answer is yes, but the market may be much smaller than you think. Expectations of anonymity vary from generation to generation, and you may be an old foggy on this one Om. Still, the old foggy market can be lucrative — just like with the Corniches, Blue Label, and Cubans .

  5. My first thought was the old Bell “privacy manager” service. For $5/month, calls to your home number were front-ended by a screener. Over time, the FCC launched the ‘do not call’ list.

    Can the rise of a premium service be used to highlight an underlying problem, in turn helping to drive public policy?

    Certainly there are differences between a POTS line and internet surfing, but fundamentally if enough people ‘revolt’ by paying, perhaps Washington takes notice.

  6. jm ervin

    Perhaps not as a paid premium service if only because of the questionable and unbounded concept of rent-for-privacy. But a privacy policy that is highly skewed in favor of the user can be, as you suggest, a significant marketing advantage.
    In terms of the protection of user data smaller companies, especially newer ones, may not evoke the level of trust accorded to established giants. But smaller more agile companies can gain advantage over the big guys by offering a privacy policy that is aggressively skewed in favor of the user. Just a few basic points such as minimal data retention in terms of both time and quantity, no reselling or sharing and complete purge on account termination. The bar seems to be pretty low right now.

  7. Why should I have to pay for my privacy? It should be a right, not something I have to pay for…

    Privacy should be the default, not an opt-in premium service.

  8. Pardon my negative tone, but I cannot believe that you are seriously talking about privacy as a paid service! I mean, come on, where is the ethics in that? Rich people more entitled to privacy than poor people?

    How is this different from blackmail? “We have information about you. Pay us or we will use / leak such information!”

    Privacy should be each individual’s right. It should not be something s/he pays for.

  9. ronald

    Can privacy be a premium service?
    Simple answer. NO
    Because we are not leaking information as a data point in time. We are leaking information throughout our connections and actions on a continuous time line. Friends, Google, Family to name a few. Everybody and everything has to be secured to prevent data leaks. If I connect the data around you I get a pretty good picture about you.
    In other words, if you just pay a few services you might just as well forget it.

  10. OM – great post – while privacy is talked about often – it is mostly a sidebar discussion. How about you start a series on this matter – one post a day – make it a one-year effort at a minimum, invite your fellow bloggers (the likes of the Arrington’s – follow through by calling in the WSJ and NYT guys) and beat the drums a bit more frequently. And challenge the Google’s of the world to a serious debate in blogosphere.

    For starters how about a poll from GigaOM on what your readers would like for the opening volley.

    If anyone can do it today – it is you Brother OM!

  11. 1st question coming to mind is – How many services do you pay off? So, you buy a privacy service from 1, 2, 6 search engines – what about any other “minor” sites that also track human beings? They’ll want a slice of the pie to keep quiet about where you are – doing whatever.

  12. I totally agree with you Privacy is very important but we have to be careful, People compalin about Google holding such Private information but then we go on to the Social Networking Site such as Facebook or Myspace and plaster our on information on there ourselves. Anyone can go on there and to see our likes dislikes what we ardoin where we leave etc.etc.

  13. Martin Lawrence

    A privacy option would definitely undermine effective placement of advertisements.

    So it is fair to assume that privacy and ad-free would naturally go together – that is, in one product.

    Privacy functions would be a natural extension of todays premium (as in advert-free, fee-based) services. Thus, I believe integration will happen gradually (“now including privacy!”), as public awareness and demand rises.

  14. Talk about product-ising Privacy. It would be more of a benefit rather than just being a feature.

    But then again, the upload share is getting soo popular, very less of us would pay such a benefit and even then how much would be a question.