The Subscription Economy

When measures being put in place to prevent third-party cookies from tracking individuals across the internet, companies that relied on these cookies to deliver personalised services had to find workarounds. Privacy activists are concerned that all this does is concentrate power in the hands of fewer gatekeepers. We can use this opportunity to move away from advertising as the business model for the internet and explore the subscription model.

This article was first published in The Mint. You can read the original at this link.

Over the past year, two of the largest tech companies on the planet separately announced that they were going to be putting in place measures to prevent tracking technologies from uniquely identifying individuals as they move from site to site across the internet. It doesn’t take a genius to figure out that both these announcements are aimed at loosening the stranglehold that third-party cookies have, for decades, had over the monetisation of the internet - as well as the many privacy harms that they have caused.

Cookies Everywhere

Over the years, cookies have inserted themselves into every facet of our internet experience. They have found their way into websites everywhere till they are, today, capable of tracking online behaviour no matter where on the internet users may be or how tenuous their connection is with the business that is benefiting from those insights. It is this ubiquitousness that has raised the hackles of privacy advocates, giving rise to concerns that an internet littered with cookies is just a giant surveillance machine, designed to create comprehensive, fine-grained profiles that will eventually be used to sell things to us. But it is this pervasiveness of cookies that actually powers the internet, providing fuel to the multi-billion dollar online advertising industry that in turn gives internet businesses the income they need to be able to continue to provide their services for free to all of us. As much as we hate them, I am not sure we can do without them.

But now that the two primary gatekeepers of the internet are out to take them down, I guess we will finally see exactly how the cookie crumbles.

How They Crumble

The reaction to the imminent demise of the third-party cookie has been interesting. Companies that rely on them to deliver personalised services are realising that their businesses are about to be swiftly cut off at the knees and are scrambling to find work-arounds. Business with access to first-party data (FMCG companies and the like) have gained a new-found appreciation for the value of their direct consumer channels and are re-engineering their operations away from a reliance on third-party data. All data collectors, regardless of where they get their data from, are coming to terms with the fact that they are going to have to prioritise privacy over personalisation in how they operate.

Privacy activists, for their part, have been somewhat reluctant to celebrate this as a victory. While a world without third-party cookies is certainly an improvement, they are concerns that the technology that will replace it will end up concentrating power in the hands of a few tech giants. Even if the elimination of cross platform tracking will provide users relief in the short term, they are worried that we don’t really know what the long term consequences of being divided into anonymous cohorts for the purposes of federated learning actually are.

This is not the first time we’ve attempted to rid the internet of its cookie infestation. I’ve previously written about the Solid project - Tim Berners-Lee’s last-ditch attempt to save his creation from itself. Solid offers us a way to gain more direct control over how internet companies use the data and information that we upload onto their websites and internet services. It allows us to create personal data stores of information that remains under our exclusive control and only releases information to social media platforms that we permit and in strict accordance with the terms we specify. But even when I wrote about it I was not sure that it was going to work:

The primary reason we gravitate to social media platforms is not that they host our personal data for free but because they serve as a virtual meeting place where we can interact with all the important people in our lives. If Solid is going to wean us away from the many social media sites that we currently populate, it is going to need to find a way to replicate that environment. It will then have to convince not just us but all our friends, family members and co-workers to also move.

The problem is that all these solutions are just band-aids. They assume that the only way to keep the wheels of the internet machine turning is to accept that the advertising model is here to stay and then try and find newer, more acceptable ways to collect the data that the model needs.

The Subscription Alternative

But there are alternatives - many internet based services already operate on a subscription model. Streaming music services offer vast catalogs of music, podcasts, and a host of other audio formats in exchange for a consumption-agnostic, flat fee just as streaming video services allow us to choose from a wide array of content in exchange for an affordable monthly charge. By taking a small annuity fee from a vast number of users, streaming services can eschew advertising entirely. But streaming is a relatively new addition to the bouquet of internet services that was designed this way from ground up. Is it possible to build similar solutions for more traditional internet services?

For most of its existence, the internet has delivered knowledge through text. We access information through blogs, websites and search engines all of which deliver knowledge through primarily text-based interfaces that have always been free to consume. The ability to freely surf from one site to the other, falling down rabbit-holes at the click of a hyperlink, is the reason why we visit the internet. Adding a subscription layer to this almost feels like sacrilege.

And yet we’ve already begun to see that happen. Over the recent past there has been a steady proliferation of paywalls. Increasing volumes of creators are making at least portions of their content available for a fee - from the biggest, most influential news organisations to small, independent platforms providing niche content. Services like Substack (through which you are getting this newsletter) have taken this idea and built on it making it possible for individual writers to be paid in a way that was not previously possible.

Dare we imagine that this might be the business model for the internet of the future?