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Subscription Inequality: Is This the New Digital Divide?


There’s been a huge reaction in Silicon Valley to Dalton Caldwell’s audacious proposal. He’d like to create App.net, an API-focused feed service (or, “Twitter/Facebook-y social sharing thing” if you talk like a normal person) which has absolutely no advertising, so it can keep the company focused on the needs of the users instead of advertisers.

If you know my work, you’d think that’d sound great to me. The entire point of doing Your Face is a Saxophone the way we have is to combat the “advertising hell” that’s making Caldwell upset.

The problem is that his solution is a paywall..

Okay, quick disclaimer: I am not anti-App.net. I am not trying to cynically dismiss it, and this is not a snark piece. But I have some very serious concerns about its implications.

In order to be a “sustainable, predictable business” (great!) providing a service where “you own your content” (awesome!) which “will align [its] financial incentives with members & developers” (I love this!), App.net is going to charge its users $50 a year. With just 10,000 users, they can pull in $500,000, which should be enough to keep the business afloat. That way, App.net doesn’t have to worry about not having the millions of users that Twitter and Facebook can claim.

Good for App.net. What about poor people? What about high school students without access to a credit card? What about people who are already paying their home Internet bill, their phone bill, their gas bill, their rent, their utility bill, and just don’t want to have to pay another damn bill?

For those people, Caldwell might say, there’s still the ad-supported Twitter. Which isn’t free, by the way, because you’re being advertised to, so you’re giving away your data. I’m with you on that, Dalton. All valid points. But I have a below poverty-line income, so Twitter still feels pretty free to me.

But if Caldwell’s right, all of those ad-supported services are unsustainable anyway. So eventually, you’ll have a choice between a paywalled social networking service like App.net, or just not networking online at all. So all of the people who love and rely on Twitter but couldn’t (or wouldn’t, but it’s mostly couldn’t) pay $50 a year for it will be left behind.

Now, a cynic would say that all those people will be forced to actually go outside and meet people and blah blah blah good old days etc. I sincerely doubt anyone in Silicon Valley would say that. Silicon Valley — rightfully, I might add — believes that social networking services are as essential a utility as electricity and running water. Ad-supported Twitter and Facebook, for all their evils, are doing a much better job of providing essential communication utilities to low-income people than App.net could ever hope to. Especially Twitter, which many of my friends use in lieu of text messaging because they can’t afford a cellphone plan.

However, there’s still that whole sustainability thing to worry about. Even if it were being run entirely as a not-for-profit, App.net would still need to bring in money to exist. In fact, assuming it doesn’t take any outside investors, App.net might as well be considered a non-profit consumer cooperative. But that’s what I don’t like about it: If Twitter is Wal-Mart, then App.net is a snobby organic food co-op in Park Slope. Good for the rich Park Slope people, but East Harlem is still a food desert. There has to be a way to create a sustainable business without being an exclusive club for people who can afford it.

My biggest concern is that App.net is the first of many things like it. I’m concerned that we’re moving towards a world of computing where only the rich and the upper-tiers of the ever-shrinking middle class can afford to participate. More than anyone, I want to see sustainable businesses that aren’t compelled to needlessly grow, but I’d like my friends and I to be a part of them, thank you very much.

I don’t definitively know the answer to this. Freemium works for some businesses (like Dropbox, Github, and Evernote — which are, interestingly, the three examples App.net cites as being proof that people will pay for web services), but I’m not sure how to make it work for a social networking service. The only thing I can suggest is a pay-what-you-want model, which has decades of history in brick-and-mortar social businesses and has been wildly successful online for the Humble Indie Bundle.

It’s still not wildly successful for Your Face is a Saxophone, but that’s more the fault of obscurity than viability. If people like you, they’ll give you money. I just need to get more people to like me. Which is why I don’t put my shit behind a paywall. But I digress.

I really want to see a world full of web apps, services, or just plain old-fashioned sites that aren’t inundated with ads. I also really want to see a world where a low income, a bad credit score, or a young age doesn’t bar you from experiencing them. We can have both, right?

    • Mark Roest

      There are two basic ways to charge variable rates for equal services, depending on ability to pay, and some variations of those. One way is to simply say, sliding scale, $5 [or $1] to $50 per year, depending on what you can afford. The other is to say, $50 per year, and if you can’t afford it, don’t go away — just let us know, and we’ll work something out with you! Provide a link to a form where you offer a series of pay levels, ask what they can afford, provide some ways to pay that much, and say Thank you! We’re glad to have you aboard! Variations include asking for some sort of community service in exchange, and asking for proof of income. Alternatives include asking for community currency instead of fiat (‘hard’ or ‘official’) currency. Where you accept full payment, be sure to say what wonderful things that will make possible (which matter to your audience), and thank them colorfully.
      Following this path leads to community networking, virtual or physical, of all imaginable forms. And this is a Very Good Thing!

      • http://plankhead.com Zacqary Adam Green

        Exactly, that’s what I’m talking about. I’m really surprised that kind of model hasn’t caught on with web startups yet. Maybe it scares VCs too much. (I find it interesting that VC has been used as an abbreviation for both “Venture Capitalist” and “Viet Cong”)

        I’d imagine a sliding scale scheme could actually be more profitable than a fixed price. The lower prices that some of the customers pay gets offset by the fact that there are a hell of a lot more of them. And then you have your superfans who give you thousands of dollars a month or whatever.


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