This is a download from BFM 89.9, the Business Station. It's Friday, my name is Jafsan Du, it's nearly Chinese New Year and May, Amakage, once your money... All of it, before you put it all in unquels. It's not for him, he claims, it's for you to stake your claim on the future of the internet.
It's time to Matt's plane, so Matt, before we start, you have some big news you want to share with everyone I believe. Yes, Jeff. As of last week, Matt's plane has its own dedicated download feed. So if you listen to the show live or download the show from the BFM Apple website, then obviously there's no change for you and you won't appreciate my excitement.
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You're like, that's what? Yeah, so you're making a big deal out of the idea of paying for things, aren't you? Yes, we're going to look at blockchain in a couple of weeks time and I can finally figure out how to explain it to people. That's been on the to-do list for a while.
And that dovetails quite nicely with today's topic. One of the things you can use blockchain for is actually to revamp the protocols that the internet is based on. So that would be one way of ensuring that the internet continues to run as an independent, free and decentralized entity. It would make it a lot more difficult for enormous and massively rich companies to take control of the internet or for particular countries to hijack or claim rights to the web.
I'm not going to get into that now, because like I said, I still haven't quite figured out how to make it palatable. But again, there's no point in securing the independence of the infrastructure that the web works on if we have no control over the visible part of the internet, the sites that we visit, the places we browse, the networks we dump our social information into. But how does paying for things actually help me? You do have all the best questions.
It's like you read my mind. I don't know how many of our listeners are aware of if Jenny Morrozov. He's a well-known futurist writer and academic based in the US. Some of you may have read or heard of his book, The Net Delusion, which was I think I came out in about 2011-2012.
I read a piece he wrote last weekend for the UK's Observer newspaper where he talks about the freemium model of the internet that we are all addicted to. I mean, added some extra insight to what I've been banging on about for ages about the free internet not being sustainable. So it was especially interesting to read about the intersection with artificial intelligence in a way that I hadn't really connected the dots to. Before we hurt everyone's head even more, why are you so opposed to getting things for nothing for free?
Why? Well, I don't want to bore people too much because I've said some of these things quite a few times over the last months. But in the early days of the web 2.0 internet, this kind of content rich internet that we enjoy now, companies tried out a number of different models to see which ones users were most comfortable with and which would get them the largest return. There are a lot of great books on the free model of the internet.
You might like to try one called Free the Future of a Radical Price by former wide editor Chris Anderson, because then you can see how his predictions have fared in the decades since the book was actually published. I'm not sure that anyone thought that the free model that we now use would be sustainable in the long term, but it certainly has been addictive. For example, whenever I recommend an app to friends invariably the first thing they ask me, it's not how much does it cost, but is it free? Yeah.
Yeah. Nobody says what does that cost? It's always is it free. And then you think about how much of your online life is actually nominally free.
In terms of the services we use. Well, in a lot of ways, yeah, the internet is kind of back to front. If I use an analogy, it's like taking a train journey and only paying for the track. You get your seat on the train free, or at least you don't pay for it as long as you agree to have someone observing your behavior while you travel, recording and analyzing everything you do, and then selling that information onto the highest bidder.
And then the lowest bidder. And then every bidder in between. You know, they might screen some films, but there are always ads somewhere on the screen. So if you think about it, that would be a pretty weird journey.
Would you be able to relax if someone was sitting opposite you and taking notes on everything you did? So yeah, it would be creepy. But that's exactly what we do online. Somebody is observing or something is observing everything that we do.
You know, wouldn't you think it was odd that you were buying a ticket that paid for the track, but not your actual journey? Of course, it's just weird. Wouldn't you rather pay for a train ticket that included everything? And then once you got on board, you would just left alone to do whatever you wanted.
So that's how you see the internet? Pretty much to a lot of extent. You know, you if you take it back to the actual model, you're paying for your internet provider, which is basically the train track that gets you onto the onto the web. It lets you go left and right, up and down.
You get to choose which direction to point your browser in. But when you choose to go to a website or Facebook, those companies have to find a way to make money from you because the money you've paid is only going to the guys who made the track that got you there in the first place. And also, I may say that's the argument about internet neutrality that's going on in the US. Well, if they did, they were probably misunderstanding the model a little bit.
In fact, this is actually a case of blatant profiteering. In that instance, with the US, you're paying for the track and the provider is leaving its options open to make internet companies, the trains that sit on the track in my analogy, also pay to allow you to use the track and come to visit them, where they still have to find a way to make money from you. So that's kind of like a double jeopardy because those sites potentially face being removed from the express track and shunted onto some low speed local network where they would face probably a catastrophic loss of revenue. Because if there's the one thing that we demand online, it's speed.
Is it all because surely the access to the most is the most important, but if a site or connection lag, is it that important? I know you're playing devil's advocate here because I've heard you muttering when the office internet slows down. So speed, reliability and consistency are very, very important. I can't stress that enough.
When we visit a site or we use the service, we expect that experience to be snappy. If it isn't, we get irritated. Our attention starts to lag and we don't derive the same enjoyment from using that site or service. So I was talking to a friend a couple of days ago and she's using a smartphone that's probably three or four generations behind the current model.
And she's kind of stopped using services like Instagram because there's no enjoyment for her there. It takes so long for the pictures in the app to open. She can't be bothered to look or to upload her own pictures. All of it takes so long.
She can't be bothered anymore. And that's a scenario that online companies never want to be on the receiving end of. High speed entry to their services is not a nice to have. Ease of use and rewarding customer experience are basically the basis of their business model.
We're talking about time to pay with metamatage from culture pop and after the break. We will talk about why the internet has become a business anomaly with them paying $1.9. Bringing fresh meaning BFM 89.9. Welcome back.
My name is Jazan Dut. Together with culture pops metamatage. We're doing a match meeting episode for time to pay before the break. We were talking about some of the factors that have led us to the product model of the internet.
So why is the internet the anomaly then the normal economic model in our society is pay to play. Yeah, there's no way around that. We're not inundated with free stuff in real life. In fact, precisely the opposite.
As for why we chose to go for the free stuff, I think there's probably a lot of factors there. I'm serving a little bit here. So if my hypothesis is wrong, please come and inform me. This is the normal model for our society.
You negotiate a price and then you settle the bill. In the early days of Web 2.0, there were so many companies and startups and sites and services. And no one knew which businesses were in it for the long haul and who was going to fail after a few weeks or months or a couple of years. At that point, we were still quite conscious about the internet transactions.
We didn't want to put our card details online because no one was really sure how secure those transactions were. And it's weird to say, but it was also an era before we had apps and smartphones and an easy way to pay for things. So sites would give us a free trial, but liking a service wasn't enough to convince us to part with our money. So if accessing content is free, where was the money going to come from to cover the operating costs?
And then that took us to the premium experience. Well, I mean, I simplified it a little bit like timeline wise as well. It's probably a little bit off. But you know, that's kind of the general picture.
The free model was, and this is two weeks in a row where I'm using this horribly detested word, but the free model was a disruptor and it seemed like a way to give us as consumers more and satisfy the needs of profit driven companies and increase competition. At that time, at the time that Chris Anderson wrote his book, Free, the free model scene genuinely exciting, it opened up the possibility of navigating the world, essentially free of charge in exchange for giving out information and behavioral traits about yourself. And, you know, watching some ads, you might be able to eat for nothing in restaurants, you might be able to travel free of charge on planes. I think what the book failed to see was quite how quickly we would get to a kind of hard ceiling related to all of this information.
And what's this hard ceiling that you talk about? In terms of a hard ceiling, it's when the company that's buying or processing that data will say, OK, that's enough. We've got enough information. We're done.
I've used this example on the show a number of times. The predictive abilities of the supermarket chain target in the US, which can tell from what you're buying, very intimate details about your life, things as diverse as knowing if you or your partner is pregnant, or if you've just moved house, you might be a student or unemployed or a high-flying career, as they can tell a lot of this information just from what you buy the amount of time that you spell in the source. Apart from checking in with you from time to time to see whether your circumstances and tastes have changed, how much is that picture going to change? How much more information are they going to need to add to that picture?
So does that data become progressively less valuable after that initial stage of building up the profile on you? What about the kind of data that Facebook and Google like to have us? Well, at the more superficial end, you have the information that is used to serve ads to you. Then you have the information that can be used to make sure you get a customized content feed that interests and engages you.
In fact, we've seen a story this week about the ongoing changes at Facebook, which is the company will deprioritize information from brands and try to fit more local news into what you see on your feed. To be honest, that doesn't really work so well for me because I prefer to see international content feed, but I can bring that up with Zuki Berg next time I see him on our next vegan burger night. And of course, the next level of data are the information that is being used to program artificial intelligence. Now, before we get to AI, why does this point to its pain for your online content?
Well, you can see how complicated this model is. It's one of the reasons the tech companies find it so hard to make money. They have all these layers and processes to capture data. They analyze and sell it on.
It's really hard work. I'm not saying that they wouldn't want to be in the data mining business, but as parasites, which is essentially what we are, we have less control and direct influence over these companies than if we were actually paying customers. So look at Facebook. They have a kind of bums on seats, attitude to rising because they want you to be sitting there and looking at the site.
So they've been forced to respond to fake news and invasive advertising in a way that Google hasn't. Suddenly, when it comes to search, there aren't that many real alternatives. And we've seen that Google's response to the fake news epidemic is rather slower. And perhaps you could argue less forceful than Facebook's has been.
And part of that, I think, is because they face less pressure to respond to consumers in that way. I'm not saying this stuff to make it easier for tech companies to make money, but at some point, you do have to wonder if you value a service like Twitter, how is that company going to stay in operation over the long term when it's not making a profit? And as a user, you're not contributing directly to the bottom line. So how long can you realistically expect that business to keep continuing on to keep serving you?
It's like the management company at Accondo, there's always a bunch of people who think they can avoid paying and enjoy the maintenance and services that the other residents have paid for. They're free riders. But if enough residents don't pay, the management company goes out of business or it pulls out of the contract and then living conditions for everyone quickly deteriorate. So paying is the answer.
It is one answer. It might not be the whole story, but I think it's a pretty good opening chapter. It provides a direct income stream to the company that you're paying. It demonstrates the value of that company and it's service to you.
There's a lot of talk at the moment about the addictiveness of social media sites. I wonder how addictive we would find them if we had to pay for them. Yeah. And how quickly we might simply leave some services and never look back.
And where does the AI fit in? Well, this is the interesting thing. And it's the thing that hadn't quite grasped until I read Evgeny Moroz's piece. A lot of the data that is being harvested online is being used to tutor artificial intelligence.
So when we look at the voice assistant services, they are more accurate when they more fully understand the connections between our words and our intentions and those actions. Then it becomes a question of how much data do they need before they're accurate enough to go out into the world and learn as they go. But the bigger question is, where do we fit into that world rather than where does that fit into our world? Why would it change for us?
Because we're essentially overlooking the fact that we are the means to the end. Why does Google give us crazy useful apps that recognize faces or voices or locations and 101 other things? Because it has a reason for doing so. We're the guinea pigs.
We're doing the grunt work to help train their AI systems. And we get something valuable in return. So it's fine. There is a value exchange there.
But to think that Google is building the best photo apps simply so that it can have the best photo app is probably a little bit short-sighted. Google, Amazon, maybe even Apple and countless smaller players are building commercial cloud-based AI that they will sell. For what kind of use? You name it, they can use it.
I mean, we'll probably do a show on what you can actually use AI for. Because it's so broad, it might be to governments to help run national infrastructure. It might be to other app developers and manufacturers. Now, we've spoken before about the craziness of every consumer electronics firm developing their own home-hard AI systems.
But the short and tall of it is that they are building commercial systems that are going to be sold on. Or rather, people will be rented access to that AI on that particular company's service. And once we get to that point, we may see a change in behavior. Once the big tech companies no longer need our data, then we have nothing to trade.
Those service providers are going to demand another form of payment from us. So we may find that the freemium model will come to an end anyway because prices are going to be installed for everything from email to search to social media. So if we may end up paying anyway in the future, shouldn't we just sit back and make the most of the web being free at this point of time? Well, I think that's the psychological notion that we have to break.
I want people to understand the value of what they're using because it gives them power and control. It also gives them protection. Most countries have consumer protection rights, which determine what you should reasonably expect from the people you give money to. That helps to hold companies to account.
Companies that currently may suspend your user privileges for violations, but they're not required to tell you what the violation is so that you can appeal. It makes your relationship far more transparent because you're paying for a service. There will be rules to that engagement rather than the situation where we are now. We're getting something for nothing from these companies and they can not do what they like, but they can be a lot less transparent with us.
As to the other part of the question, which is why not wait until they become chargeable? Because simply that leaves the power with the tech companies. If we all experience the sudden shock and cold turkey of a Google or Facebook paywall, that leaves us in a less strong bargaining position when it comes to determining the price of that service. If we go back to what you said at the start of the show, it's about staking that claim on the future of the internet.
I know it may not sound like it, but choosing a paid model rather than a free one and helping to shape what the internet looks like. To my mind, that's a lot more preferable than accepting this paid internet somewhere later on down the road and accepting it at the terms and conditions of the technology companies. Would you pay for Facebook and stuff? You can write it to Matt's Plains Facebook page, or you can also get more information on that page.
You can tell Matt, like, would you pay by using a free service called Facebook at this point? I can't just go on to Facebook. Amazing service. Just type in Matt's plane and then you can let Matt know whether...
Are you actually willing to pay for that service that you actually used for free? Also, you can subscribe to the Matt's plane at the comfort of your own podcatcher. Of course, also available on the BFM app on the website. And if you have a startup or an SME and you think Matt can help you, you can head on over to his website.
It's culturepop.com. It's a culture with a K. And you'll find a lot of information about cultural consulting and mentoring programs. This has been an episode about time to pay.
We'll be right back with Geek Squaps after this, BFM 89.9.