The Real Cost of the ‘Free’ Internet Or ‘Free’ Internet is already in the past
The earth is shaking in the Internet space. A conceptual shift observed there in recent weeks may mean that our use of online services will soon cease to be free.
True, it is not really free already, since we pay for the computer or the smartphone, for the use of the network infrastructure and the Internet provider to do this, but still, the services themselves — search engines, social networks, navigation applications, etc. — are, according to Most, for free. In the meanwhile…
Sometimes, the celebration is over — and on clear days you can already see it happening:?the business model on which most of the Internet is based — free access for users while relying on income from targeted advertising — is breaking before our eyes. The idea according to which the “payment” for the use of the network services is our personal data, which constitute a means of trade in the hands of advertisers, is becoming increasingly problematic for reasons of intrusion into privacy and the promotion of incitement and fake content. As a result, many services — even not very exclusive ones — are now aligning with the satellite and cable networks, moving to the traditional model of relying on monthly subscription fees.
The meaning of the emerging change is the?transformation of the Internet, in practice, into a?paid product. That’s how it feels, anyway, and all the signs point to that. The “product” is already less the user himself — and as a result of this the latter has to pay for the use with money, as you pay for anything. Before jumping to conclusions, I tried to find out first, to be fair, what the Internet itself thought about it — ie,?I asked ChatGPT if the Internet was no longer free — but it was, as always, too busy for second-class, non-paying customers like me.
What’s more, I must thank the popular chatbot anyway, because in the case in question, even “Sorry, we are experiencing unusual congestion” is a type of answer. It means a very simple thing: for those who have the penny in their pocket, it is already easier today to arrive in a few minutes for reliable and coherent information than their fellow peasants, who have to rely on Google’s messy and outdated search engine and spend hours in front of the screen to reach more or less the same result.
AI-based language engines of the kind that everyone is talking about now are indeed revolutionizing the way information is located on the web and its organization, but it takes enormous computing power to make them provide a rapid response to several million queries simultaneously, at any given moment. Beyond the fact that such computing power requires unimaginable amounts of energy that cause increased carbon emissions and significant damage to the environment, it also requires much more manpower — that is, an additional large expense. Therefore, it can be assumed that in any case relying on advertising alone will not be enough to profitably capitalize these smart services and that in order to effectively and continuously present the full capabilities they are able to present, they will need an?additional source of income — the subscription fees of the users.
At the moment it is still not entirely clear what the business models of?Bing from Microsoft?and?Bard?that?Google?recently introduced will look like, but in view of the need for enormous resources to realize their promise, it can be assumed that they too will offer paid subscription options. And yes, it is also possible to assume that these routes will allow, at least at the beginning, much more convenient and continuous access than the free option. From a purely economic point of view, it makes a lot of sense, no doubt, but it is completely against the axiom according to which the network has operated until now, and in view of the dominance of the network in our lives, this may without a doubt lead to various social transformations, including the deepening of socio-economic gaps.
This profound conceptual change that online services are undergoing does not end with search engines and access to Internet information:?social networks have also recently been pulling very strongly in the direction of paid subscriptions?in view of their increasing difficulty in generating sufficient income solely from posting ads to free users. The latest to do so was the company?Meta, which this week launched a paid subscription option for?Facebook and Instagram, giving users who agree to pay between 12 and 15 dollars a month for a “Blue Check”, which among other things provides them with protection against profile fakes, verification that they are real users and increased exposure of their posts to users.
In practice, this move is expected to make the blue-faced users more reliable, and therefore users’ treatment of their posts is expected to be more serious and receive more views and comments. That is, Facebook and Instagram will become social networks whose users are divided into two — those with a blue check and “regular” users, who will probably be less “important” and in fact will become second-class users. The move came about after at the beginning of the month the social network?Twitter, which is in serious financial difficulties, also announced the relaunch of the blue sign, where its owners, who pay between 8 and 11 dollars per month, will now be able to post tweets of up to 4,000 characters instead of the 250 characters that normal users are allowed to post.
So it’s true, premium services are nothing new, but the situation taking shape across the Internet and the urgent need for technology companies that deal with content to capitalize more effectively on their services — for example,?Netflix?which recently started charging a fee for sharing a subscription with people who don’t live in the same house — makes the network a much more dichotomous, clearly divided into type A users, who pay, and type B users, who do not pay.
One of the main “blames” in this change of concept is?Apple, which in 2021 decided to stop allowing third-party apps to track its users and collect details about them through cookies for targeted advertising. As a result, it created a threat to the duopoly of Facebook and Google in the field of online advertising and even surpassed both of them in several parameters. The immediate effect regarding Meta was a sharp drop in the price of the ads it sells, since following Apple’s decision they became less efficient and of less “quality” for advertisers. The trend was also reflected in the company’s latest quarterly report, which was relatively good compared to forecasts, but showed an average decrease of 22% in the price of ads — which undoubtedly was a significant catalyst in the decision to balance the damage to income from ads by adding a paid Blue Check subscription route.
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As for?ChatGPT, since one of his limitations is an inability to predict future scenarios, I focus on the present and ask him if using the Internet today is free. In response, it digs for several paragraphs about the nature of payment to network providers for the mere use of the Internet in different countries, and then presents the truth with astonishing integrity: “Many network services are free, but they collect user information to make a profit from it through targeted advertising or ways others. Therefore, even if you don’t pay for internet access, your personal information will still be a form of payment.”
Very nice, but all this, as mentioned, is already quite in the past. In fact, the moves of Twitter and Meta also come after the ground had already been prepared for them during the Covid epidemic, when the digital industry skyrocketed, in the form of the launch of premium subscription tracks on YouTube, Snap, and Discord, with exclusive features and upgrades, as additional important sources of income. These, by the way, were followed by major publishers, including the New York Times, which between 2020 and 2022, recorded a tremendous jump in the number of monthly subscriptions to the digital editions.
“Publishing has funded editorial content for hundreds of years,” Jonny Ryan, a senior research fellow at the Irish Consulate for Civil Liberties, told the Guardian this week. “I don’t see it changing, but ad-based user tracking is on the way out. Today, Meta provides advertisers with information worth its weight in gold from its 3 billion users across all its platforms — Facebook, Instagram, and WhatsApp. How much is this information worth to the company? Well, 98% of the $116 billion it brought in in 2022 came from the targeted advertising business. Yes, almost everything comes from there.
However, since Apple implemented the new policy regarding targeted advertising, Meta’s revenues have been steadily decreasing — this, in addition to the regulatory pressure exerted on it from various directions, including the European Union, which filed a lawsuit against it at the end of 2022, for a disproportionate intrusion into privacy, which may result in a fine of 12 billion dollars. To this, of course, is added the economic atmosphere at the macro level, which creates uncertainty and leads to a significant decrease in the motivation and ability of advertisers to finance significant campaigns on the network.
From here, the path of the technology giants to our pockets is very short. The point is that while they now need the money of the users to continue giving them what they want, the change in the business model will inevitably lead to a change in their experience as well: even now the social networks, led by Tik Tok, are turning from meeting places between acquaintances into means of entertainment for the masses, like YouTube, television, cinema, theatre, sports, etc. After all, the Blue Wave is, first and foremost, a marketing tool for “creators”, influencers, and celebrities of all kinds — that is, they will be the main beneficiaries of the paradigm shift when the feed of ordinary users will be flooded with their posts.
This, of course, is not what the original Facebook, Twitter, and Instagram users are now paying for with their personal information. It’s a completely different product in a completely different internet reality. A reality where many things that were given to us for “free” now will cost money. And only those who have some will probably be able to continue living happily and richly throughout the network. Those who don’t will be forced to look for something else to do with their free time. What to do, that’s how it is in life.
???P.S. New era of the transformation of the Internet product is already here
Ela Kolis is an Entrepreneur | Innovator | Enthusiast of AI & Blockchain | Advisor | Startups & Doing Good in Society. She is Named Top 50 Women in AI. She is a co-author of the book Impact and Opportunities of Artificial Intelligence Techniques in the Steel Industry. You can find other articles on my?Medium ?page and are welcome to follow me on?LinkedIn ,?Twitter ,?or my?Telegram ?channel.
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