Value of Privacy

What is the Value of Privacy? Study finds it is about $5

I came across an interesting study about the value of privacy via The Atlantic. Scott Savage and Donald M. Waldman of the University of Colorado at Boulder found that consumers are willing to pay some money for a mobile application when in return their privacy is respected or they are not forced to consume advertisements. In a post Snowden world always worth a read.

This is of course an ongoing discussion most prominently coined in the phrase that when the product is free you are the product. And there have been efforts to launch new social networks based on the premise of paying a fee and in return having your privacy and data protected from hungry advertisers. App.net which is an ad-free answer to Twitter might be the most successful one in the space though it has pivoted quite drastically since I last visited the site. It looks as if you now get a free account but then probably pay for the different apps.

The part that caught my eye was for what kind of privacy people were willing to spend their money. In the experiment conducted with 1700 smartphone users, the potential app buyers were shown an existing 100% free app from the Google Play Store and some non-existent alternatives. Those alternatives had the same functionalities like the free app but different levels of privacy. People were then asked how much they would pay for the different apps.

According to this study people are less concerned about sharing their location. A feature that would conceal it is worth $1.19. Next on the priority list is the phone’s ID number, worth $1.75 followed by the browser history which comes in at $2.28 if the app would conceal it. I bet this feature would be worth much more on desktop computers, but I digress.

The things people care most about are the contents of their text messages which would be worth $3.58 and, which was a surprise to me, the list of contacts coming in at $4.05.

Eliminating advertisements on the other hand, the premise behind App.net, would only bring in $2.12 for the app developer.

Savage and Waldman’s conclusion is that

Given the typical app in the marketplace has advertising, requires the consumer to reveal their location and their phone’s identification number, the benefit from consuming this app must be at least $5.06.

The problem of course being while the study might be an indicator for app developers on how much they could ask for privacy features, this price is far too low when it comes to social networks like Facebook, Twitter or let alone Google and all its entities. Our data is far more valuable than a puny $5 to them. But how much is it really worth to us?

What I would like to see is how much Facebook, Twitter and Google are making from my time and data and hence how much I needed to pay them monthly to retain my privacy and to get rid off the ads in my different streams. Based on that one could finally take the decision if all this social media is really worth it.

And talking about such a scenario, it is also noteworthy that the most valuable users, if we define value as how much one uses a service and how often, had to pay the service more money the more they use the service. On the other hand, forcing yourself to use a service less would be completely against the rules of social media and social in general as what we like we tend to use more frequently.

Therefore I personally find it very hard to come up with a number, especially as I’m using at least four services on a daily basis often with multiple accounts. So what’s your price for privacy and for which social media service would you pay to keep your privacy intact?


Picture by pippalou via Morguefile