Facebook are in the firing line yet again. Several large advertisers are boycotting them for publishing hate speech – these are big names like Unilever, Diageo, Pepsi, Starbucks. It will concern facebook, they will probably dial up their investment still further in an effort to stamp this out and their spokespeople will double down on on their well crafted defence based on that. “We are making every effort we can, it’s a tiny minority but while there is hate in the world there will be hate on facebook” I heard one say today. After all ‘we’re just a platform not a publisher per se’. There is one obvious solution which is to declare them to be a platform that publishes and impose the same kind of legal restrictions that apply to other media platforms/publishers/broadcasters. Admittedly these restrictions are not perfect. They differ from country to country, some are exercised through government watchdogs and others through a licensing system. If we go down this route the licensing option is the most effective – break the rules and you lose your license to trade, it is awarded to someone else. Can this be operated for the web – of course it can. Not every country or territory would sign up but if enough did it would flush out very quickly whether facebook were “doing everything we can”. But I think there is a better solution which takes the advertiser boycott to its logical conclusion. Reduce facebook ad revenue to zero by making it redundant as an advertising platform and forcing it to charge for its service. Facebook generates $70 billion in revenues from advertising and its costs are roughly $46 billion. But of course a great deal of its costs are incurred to generate the ad revenue. How much would they be if they focused purely on running a really good social media platform? Let’s take a stab – half? So how much would they have to generate from user subscriptions? About $7.50 per user per year. At $10 p.a. they’d be making a very decent $7 billion operating profit. It’s not quite as simple as that but the point is valid – there is a different business model available to facebook or other competing social media platforms. The challenge is how to force them to look for it. Well that is simple – take away their data advantage by creating platforms that allow people to transact their own data.
It has been estimated that your personal data – what you like, where you go, what you buy, what you watch/read/listen to etc – just as much as you want to share is worth $7,600 p.a. on average to you. Much more for high nett worth people, less for the less well-off but arguably more important. If you only earn $25,000 a year then an extra $2,500 for your data is very attractive (this has been proved – people in emerging markets and students are far more willing to sell their data or attention or opinions). Facebook’s model is based on them taking the commercial advantage for having thousands upon thousands of data points on you. The technology exists to allow you to cut them out the loop and transact your own data with whosoever you choose for your own gain.
With no – or at least much lower – ad revenue facebook and their ilk would have to find a better business model, one where people only hand over their money if they appreciate both the service and the ethics of the business. Would you renew your subscription for a business that allows hate speech or pushes content to you in irresponsible ways? No need for government intervention or business boycott’s – problem solved by giving people the rights to their own data and the means to transact it however they choose.
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