Privacy is the latest digital media business model (English translation of op ed in Politiken, August 2013)

– by Gry Hasselbalch

If you mentioned privacy and data protection in a discussion about digital media business innovation, data portability and social sharing a few years ago, you would most certainly have been viewed as a spoilsport. But do the same today and you might actually assert yourself as a great innovator.

This years’ reports about the rising popularity of applications with multimedia messages that disappear after receipt as e.g. Snapchat or social media services that promise privacy and confidentiality to their users such as Path, indicate a paradigm shift in what privacy means to business development today.  Recent NSA revelations have created an even greater momentum for the “privacy business model”, which is mirrored in the escalating user statistics of the more traditionally hardcore privacy enhancing services. The anonymous web search machine DuckDuckGo rising in users with 50% after the revelations, and others, such as the encryption tool Silent Circle increasing with 400% in weekly sales and the encrypted cloud service SpiderOak with 150% customer acquisition. Privacy is clearly a new basic market demand and as such it has become a business model in its own right. This October privacy as innovation will be discussed at the upcoming UN Internet Governance Forum. The debate, which will include both civil society and industry representatives, marks a transition from a view on privacy as solely an obstacle to innovation or risk and protection, to more inclusive understandings of what privacy and trust means to internet users of today and tomorrow.

Trust is capital

Trust is a new type of capital. The personal data of users has from the dawn of the internet era been the heaviest currency in the digital media business model, easy to quantify and to transform into a profitable trade. But the scale is starting to tip. Internet users increasingly ask for control over their personal data surveys show.  This includes also the young users, born to navigate in open public networks, but still always looking for ways to control their social privacy in new and innovative ways. Though, internet users do not always trust that they are in control. A survey from the Ponemon Institute, January 2013, on the “Most Trusted Companies for Privacy” showed that American users’ trust in the services they use to protect their data, has steadily decreased over the past seven years. Only 35 percent of the respondents today believe they have control over their personal information.  And a lack of trust affects the choices internet users make when choosing services and applications. A Pew Internet study from 2012 showed that 57% app users in general have either uninstalled an app over concerns about having to share their personal information, or declined to install an app in the first place for similar reasons.  Another recent Pew Internet Study from august 2013 has shown that 51% of teen apps users have avoided certain apps due to privacy concerns, 26% have uninstalled an app because they found out it was collecting personal information that they didn’t wish to share and 46% have turned off location tracking features on their cell phone or in an app because they were worried about the privacy of their information.

The industry responses to the NSA surveillance revelations illustrate a rising industry awareness of the substantial importance of users’ trust in the security of their personal data. The social media giants Facebook, Apple and Google were the first to realize the urgency of reassuring their users and regaining their trust by reacting swiftly to the revelations of the Prism programme denying any knowledge of it. Larry Page with the immediate surprised blog post “What the..?” and later with a more official Google statement accentuating a very personal trust based client relation “Google cares deeply about the security of our users’ data.”  Clearly aware of the “trust factor” in the value chain AOL, Apple, Facebook, Google, Microsoft and Yahoo among other US tech companies are now appealing to Obama in a letter asking to publish “specific numbers” of requests under the US Patriot Act and Foreign Intelligence Surveillance Act (FISA). This is also an awareness of an inherent threat to existing models and services that simply conceive privacy as an ancillary function to media based information exchanges. As EC Commissioner Neelie Kroes recently foresaw, fanning the flames by mentioning “trust” in the same sentence as “multibillion-euro consequences for American companies”.

Privacy as innovation

Kim Dotcom grabbed the opportunity a few weeks ago and tweeted that he would start his own venture capital fund for privacy start ups. And perhaps now is exactly the time to look at privacy as a basis for innovation and business opportunity. Throughout history legal and societal challenges to the private sphere of people have often inspired innovative inventions and business models. These “privacy enhancing technologies” have in the course of time adapted to an evolving social reality where new tools and new social contexts and social rules intervene and interrelate redefining the definitions of the public and private sphere. At the turn of the last century, the large mobile changing room, a clumsy wooden cart called “the bathing machine” was invented to protect bathing females from the public eye on the beach. In the early telephone era, the “Hush-A-Phone”-device was invented to “… permit the speaker to confine his voice within the enclosure formed by the device so that it is not heard by persons in the speaker’s vicinity, thereby providing privacy of conversation…”(HushAPhone V United States, 1956). In the internet era, we’ve moved from the inventions of early computer cryptography to more diverse privacy enhancing technologies providing users with greater control over their personal data or the choice of anonymity.

It is time to think differently and more innovatively about privacy and what it means in the digital age. Our conceptions about the ”private” and ”private life” have evolved over the years from a clear cut separation between the public space and the private space to a more contextually defined  and personal definition.  It has changed because the frameworks for the spaces we interact in have changed. And this is not just a change effected by our daily use of social media where we act as private people in public open networks.  This is a which has been taking place from the beginning of media history. As professor Joshua Meyrowitz already illustrated in 1986 in his famous book ”No Sense of Place” media have slowly but steadily broken down walls between public and private spaces –that is firstly between the individual and family and everything outside the homes’ four walls ”the public space”.  It already began with the radio and television that let the whole world into the living room and then the internet and mobile arrived placing all the information and connections closely to our bodies, which means that today our private lives increasingly take place in a public space.  But the fact that private life has become social does not mean that it does not exist, that it is “no longer a social norm” as Facebook’s Mark Zuckerberg was quoted to have said a few years a go.  It just means that privacy has a new form.

Future user demands

The mobile changing room the ”bathing machine” was a perfect invention for a reality characterised by clear distinctions and borders between the public space and private space of people. But today we need a new type of inventions that match the digital citizen’s needs. Here it can be an idea to look at the way in which private life enfolds for young people, the future users of digital media. The generation that was born and raised with sharing their lives online and for this reason also often has been branded as the generation that does not care about privacy.  When adults are asked to define privacy they will most often define it as all the things that it is not. The private is not public. It is not something we share with others.  Something we write about in a dairy to ourselves and hide under the bed. With an ”adults perspective” on young people’s use of e.g. social media it is difficult to see private life for the forest of images and status updates.  But if we take a closer look at young people’s use of digital media then “private life”, “privacy” is today more than anything ”a live and kicking”. The social media expert Danah Boyd has throughout the years talked with hundreds of young people about the use of social media as part of her empirical research. According to her young people make use of a range of complex strategies to maintain privacy on social media, because they actually do want to keep something to themselves while at the same time being social and sharing. This is why Boyd calls the type of privacy young people exercise “social privacy”. Young people associate privacy with social contexts. Many will for example consider it a transgression of their privacy if an image from a profile is taken out of one context and used in a different context than it was meant for. In spite of the fact that it in the first place was shared in a place that everyone has access to.

To have a private life, an image and an identity online is for young people about control. Control with the social context they share their personal details in, with the period of time the things they share remain online and with who is following. In this view young people’s interests and demands can provide an important insight into future market demands as well as the drivers for innovation. Looking at young people’s use of social media it is even clearer that “privacy” in the more traditional sense of the word with a clear distinction between private life and public life has evolved into a more personally nuanced concept. And this is a concept that is supported most sufficiently with new innovative tools that provide us with the opportunity to make our own choices and have a say on our own contextual definition of privacy.

Privacy is today’s business model

Privacy has always been a business decision. Over the years it has developed into an element of product quality and market differentiation. This years’ negotiations around the European Data protection reform has received unprecedented attention from industry and regulator lobbyists. But rather than treating privacy as solely a legal obligation, the most brilliant idea today is to treat it as an area of opportunity and business innovation. Recent trends in services and applications that are either fully designed to enhance privacy online or just marketed as such, feed directly into trends in user strategies to assume control and navigate online social privacy and to “trust” the services they use.

Published in Danish in Politiken, 21 august 2013,

Download the article in PDF here

Citation: Gry Hasselbalch Lapenta, 23 August 2013

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