RENTAL HYGIENE

Dick Pountain /Idealog 353/ 06 Dec 2023 12:02

My ideas for this column often come from newspaper stories, and this one was about Meta (The Corporation That Used To Be Called Facebook, or MTCTUTBCF for short) which has just launched ad-free, subscription-only versions of Facebook and Instagram to comply with a new EU privacy law. That law, first deployed in Norway, prohibits tech companies from forcing users to agree to targeted advertising to use their products: the user must be free “to individually refuse consent to certain data processing operations … without being forced to completely waive the use of the service.” 

Charging money for the product instead of monetising users’ data through advertising is one way to comply, hence Meta responded by offering paid subscription versions of Instagram and Facebook as “a valid form of consent for an ads-funded service”. This means all the major online platforms now offer a choice between a ‘free’ ad-funded and a subscription or rental version: Amazon has Prime, Google has YouTube Premium, while content-providers like Netflix and Disney+ offer no other model. 

Economists of both left and right persuasion tend to frown upon ‘rent-seeking’ – that is, making money from what you merely own rather than what you make or what you do – as it’s reputed to stifle innovation and competition and is often a symptom of monopoly. That’s as may be, but there are obvious cases (for example water, electricity and communications utilities) where renting their service is the only sensible route – Margaret Thatcher’s attempt to get us to own a slice of them fizzled within months as people sold their windfall shares to buy wide-screen tellies.

Personally I have very few software services, like Spotify, that I use often enough that subscription makes sense, but I do rent 100Gb of extra cloud storage from Google for a very reasonable £20 per annum. What has me seriously irritated though is the recent wave of small and far-from-essential vendors rushing into the rental-only model, presumably as a survival tactic in the face of dwindling revenues. 

I recently went shopping for several music-related Android apps, including a guitar chord guide, a DAW (Digital Audio Workstations) and a video editor, and was astonished to find that so many of the competent ones now employ the same come-on, a ‘free’ 7-day trial but give us your credit card number now (tantamount to inertia selling, the weapon of encyclopaedia salesmen through the ages). I did eventually find one of each that was good enough and offered an old-fashioned “give us £XX to remove the ads and own it” deal with which I’m perfectly happy.  

A similar Gadarene rush into rent-seeking appears to have infected many of the content sources I’ve seen relying on for years, who have recently started teasing with the first few paras of an article before greying-out the rest and demanding my wallet. I’d often be prepared to pay a reasonable sum for a single article (though many academic sites want far-from-reasonable bucks, assuming your institution is paying) but I really don’t need yet another monthly subscription.

I’ll confess that over the years I’d cultivated an Artful-Dodger-like skill in getting over, around or under paywalls: once it was enough just to Google the article title outside the site (they got wise to that), then more exotic tricks like reading the Pocket-saved version (they got wise to that too). Now I just don’t bother with them as I have too much to read anyway, and I suspect many others feel the same way. 

This is not a traditional kind of rent seeking which exploits monopoly over an essential service, but instead vendors manipulating the sheer ease of the buy-now, one-button-press billing/payment process to convert customers to ‘subscriptions’ that they neither want nor need. It’s always been a problem for software vendors that their products are expensive to develop, cheap to copy and become out-of-date quickly and rental can look like a solution to all those problems, but it really does diminish the incentive to innovate or improve features: shrink to a skeleton team of maintenance developers, move to a subscription model, hey presto all revenue becomes almost pure profit, which keeps investors happy and pressures your competitors toward a rent-seeking model too.

Because people can be persuaded that digital goods aren’t quite like physical goods, renting them may weaken ownership rights over a purchase that can be turned off if you don’t pay up. This is what has the EU worried, not just about the services themselves but about the users’ private data – invalidating ownership rights without the explicit consent of the owner is tantamount to theft. Call me old-fashioned but I prefer to own the tools of my trade. I carry out pretty frequent audits of my subscriptions, of how much I use them, and dump without mercy. 

[Dick Pountain finds the ads on Facebook more hilarious than most of the content]