Who Pays for the User

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A conflict of interests

Online, someone will always need to pay. People need to eat, websites need bandwidth and servers need power. The important question is who foots the bill. Right now online, there seem to be three options:

  1. The User
  2. The Advertiser
  3. The Investor

It is the competing interests of the user and the advertisers that often shape the user experience with Internet products like Google.com, Facebook.com and Last.fm. Making the advertiser pay can mean compromises to the user’s experience and privacy, but a user pays model will lower subscription rates and the size of the user base.

The investors are interested in a profitable company, either through revenue or a solid IPO. How this is achieved is not relevant, depending on the amount of risk they are prepared to take and how long they can wait for a return. A lot of highly visible venture capital is invested with startups focused on building a large user base, usually by providing the bulk of their services for free and moving towards either trying to get bought by someone big or an advertiser pays model.

On Twitter, @ssethi said:

As someone once said: if you are receiving a service for free, then YOU are the commodity being sold

Ultimately, if the user is not covering the cost of the service, and if the business model is not moving in that direction, then their interests are not as important as the interests of those that pay the bills. And this will be reflected in the user’s experience.

One response to “Who Pays for the User”

  1. […] This post was mentioned on Twitter by anthony contoleon, anthony contoleon. anthony contoleon said: new blog by me, Who Pays for the User http://bit.ly/hVD5yy […]

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