Pay with your personal data: a new business model explained

Today, offering a product or service without a business model is very problematic for start-ups. The gratuitous argument does not work in the long term if the activity of the company is essentially based on the sale of products or services. The new concept of free data access is gaining momentum and reaching more and more sectors.

The principle of this business model

Free data protection is the only business model in which freemium can be a reassuring or even profitable strategy for the company. Indeed, unlike the classic freemium, it does not rely on the conversion rate of free users who become paying customers. In fact, the platforms that use this business model can already be financed thanks to the monetization of the data collected. This is how they can afford to offer free services.

Its mode of operation is simple, but very effective. It consists of offering a free service in exchange for data communicated by users sometimes, voluntarily and sometimes, without their knowledge. Concretely, the collection of data can take several forms. “Start-ups” sometimes ask users to subscribe or register to receive the free service. In some cases, the famous cookies are installed to allow the geolocation of the user or access to the data available on his workstation. Sometimes it’s data sharing or data storage on “clouds” that allow startups to exploit them.

The monetization of data does not only concern companies. For platforms, data provided by individuals is also valuable. Well, that it is not yet quantified in a certain and clear way, the value of the personal data is more than important since in the long term, these will make it possible, for example, to better identify the target of an advertising campaign.

The concrete examples

Many concrete examples can be cited to illustrate this business model, from the smallest start-up structures to the major international players (networks).

The site ControleTechniqueFruit for example, allows to pass its technical control for cheap or even free. The secret of this gratuity lies in the collection of information about the life of the automobile and the behavior of the motorist.

Amazon has developed its underground service which allowed to obtain video games and free applications in exchange for certain usage data. Although the giant has achieved a strategy that closely matches the expectations of its customers, it has decided to close this online service.

Social networks such as Twitter or Facebook use your data when sharing your privacy online (photos, video, interests, etc …). It is important to note that users can produce data in different ways. Sometimes they do it voluntarily by registering on a website for example. But it can happen also that the users provide data without knowing it, such as navigation data, the history of the searches carried out or simply by “retweetant” a content.