Are you careful with your data? Do you ensure that your browsing history is anonymous or that large corporations aren’t spying on you? Then my question is, do you know why they want your data in the first place?

Explaining myself

I am an avid believer in knowing what information you are giving up or away, in exchange for services that use your data in analytics or ad-revenue. It is important to know what you are getting into when installing an app that declares itself “free” or purchasing a phone from Apple or Google. I am a programmer myself with experience in building larger system which are delivered for an equally large cost to other companies. The cost of the application ensures that not only will the application be maintained and kept running but also used to invest in improvements and upgrades. Therefore, whenever I see a free app I find myself questioning how it works and what potential cost the developers might have. Depending on the answer, you can assume that anything with a database or server hosted by them, will inherently need to earn a profit to pay for that digital resource. But if the app is free, how will they attain this?

The different financing models

I have considered building multiple apps myself and am in the process of finalizing one. With this I have begun questioning how I should price it to make sure I get the most users and profit possible. I have read about and thought of plenty of methods, here are some that I could imagine myself using.

“Free”

With this method I can price my app for no upfront cost. Any user with interest in the app would consider testing the app, to see its functionality and usability. They go in with the mindset “I will install it quickly, test it and uninstall it if it sucks”.

If I go this way I must make sure that the first 10 seconds of the app is enough to grasp their mild interest and change it to a level where they consider it worth keeping it installed on their phone.

But of course, with an initial goal of also earning a profit, I must sell someone something. Nothing is truly free, and since I have sold my time to build the application I also wish to earn on that investment. Now here comes the key component in this pricing model, I could either sell some of the users concentration through ads that show up in my app, or I collect data which I then sell to other companies.

Since my app is new it won’t get much from this, but if it ends up becoming popular the price per ad-space goes up or the data increases in quantity.

Between these options I would personally choose to go the ad route, as it is a bit less intrusive, since the user can see what they are getting into and are continuously reminded of it. Being the nice developer that I am, I would also offer you an ad-free alternative for either a small subscription fee or a one time cost.

Selling users data is somewhat frowned upon as the user doesn’t feel in control of their choice and makes them uncomfortable. Even if that data were to be anonymous and basic in its contents, such as telling the companies something as simple as their battery time, it would still feel like an infringement on their privacy.

One time cost

This method I have the most trouble accepting. Sure, it is a good pricing model if you built an app without any continuous costs and you don’t plan on improving it after release. I might even make a demo mode where the user can test it out. But since I will only get paid once, I will not get anything else from an existing customer again. Improvements might be a way to broaden your customer base and earn more through these new users, but either way you have begun “tapping out” what is essentially a limited resource.

It would also create a large gap to overcome, in the form of convincing the user that it is worth the one time investment. Some people prefer to pay once and feel done, but only if they can accept its price. If something costs more than they are willing to spend in a one time purchase, then they might skip it, even though it would have cost them more in the long run as a subscription service.

I also question whether most users of apps with this specific pricing model truly understand that “this is it”. In our world of continuous updates and bug fixes we have almost begun to assume that every- and anything will be improved if it is found lacking. I, as a developer am also giving up on the project, since I have finalized it. There is no real financial gain for me to return, and my time is better spent on either the next generation version of the same application or something completely different. It is very seldom that I build something and feel that I am comletely done with it and will never want to return to it.

Subscription

My favourite method so far. Although I wouldn’t apply this to all applications, this model allows for the most growth. I would especially not recommend this for those apps which carry with them very little functionality or actual financial worth for the end consumer, such as mobile games.

A user has little to complain about, except for the cost, since they know what they are getting in to as soon as they pay their first monthly payment. The may even have had the possibility of trying it out through a free month or some limitation to the functionality. This trial period allows them to test-drive the app and apply their own value to the app. If it is found lacking, then this will be directly reflected in the number of paying consumers.

As a developer, the continuous income would allow me to continue working with my application and add additional functionality for no extra cost to the consumers. Conveying new features might increase their gratitude and inherent value of the application, which the developer may choose to use to their advantage or not.

Points of discussion

Now you know of some of the models at a very simplified level, and my subjective remarks about them. These three models can of course be combined to create something that reaches the largest possible customer base. All three models have benefits and downsides, and should be carefully chosen from depending on what app you are to apply it to.

What I originally wanted to discuss is the fear people have on the use of their data. The model we see the most issues with, is in the end “free”. It is a model which almost all consumers might consider buying into, and gives the developers the same benefits as with a subscription model. The only problem is the stigma surrounding the data integrity.

Don’t get me wrong, I also wish to keep my secrets to myself and data which can be used against me, private. Someone gaining access to my sensetive data might be able to access my accounts or steal my identity. They might have uses for it that I can’t even imagine, but in the end they are limited to the data which I choose to share with the internet.

Using apps, surfing the web or chatting over social media should always be done cautiously. You should never say something that you wouldn’t want others seeing. Before using any internet connected application, make sure to tell yourself:

• What may you say when the world is listening?
• Dance like like anyone could be watching
• You are not sharing your thoughts in a private diary, hidden under your bed, you are posting it on an open forum.

This might be a negative and pessimistic view on how the net works, but it ensures no surprises and a fair price. You pay for free apps with information you are willing to share.

If you don’t want to pay them with information, banish “free” (and some “subscription”) apps from you lives. Always ask for a price upfront. If you want to go through your lives like everyone else and take advantage of all that the companies have to offer, share what you are willing to share. This is not obvious for all, and especially not children, which is why we must educate ourselves and our future generation, so that there isn’t any confusion.

I called this section “Points of discussion”, since it is always what I end up discussing with other people. Many who I have met might not agree with me since they feel robbed of their privacy. The have payed with what they thought was too high a price. But in the end the discussion often comes down to whether they should have been better informed or prepared. I agree with almost all, when they say that the conditions weren’t conveyed clearly enough. Since if the person I am discussing this with does not feel informed, they were clearly not enlightened in a way where they could understand.

People who build apps are developers, they have thought about all of this already and considered it’s ups and downs. They might consider this general knowledge. You who haven’t thought about selling an app may not have pondered the various pricing models. You, the uninformed
the consumer, are technically in the best position to explain to others what they should know, since you have experienced not knowing.

We will always have to watch our backs and read up on that which affects us. If you feel tricked, then you were so, only because of too little knowledge. Complaining might be a good way to share you experience, but it won’t stop it from happening again. Don’t abandon an app for their pricing model or data sharing policy, instead interact with it in a way that works for you. Encourage others to do so to instead of exiling yourself from many technological advantages of everyday life.

Conclusion

Are you browsing the internet through methods that hide your information? Are you afraid of what they gather on you? Then you are most likely giving up great features in exchange for your privacy. Which might be good or bad depending on who you ask.

I choose to keep using what is available to me and share what I feel willing to share. I acknowledge that someone knows my location at all times, but I gain the ability to find my phone when lost. I acknowledge that my browsing history is analysed, and cherish the fact that I don’t need to look at an ad about Zlatan.

If you become upset when learning about their policy for data collection and sharing, then maybe you haven’t grasped the concept of their pricing model. That responsibility, however, lies ultimately on you. Therefore, my recommendation is to always strive towards:

Understanding and reacting, instead of complaining and overreacting.