Cost is always one of the key drivers in consumer decisions. New experiments are made accessible for free only for marketing its core offering, which would be charged in the future. For example, new companies have free stuff and a non-stringent environment for using their product or service; once they have a sufficiently large user base, they must maintain cash flow for a ‘sustainable business-proof’ or if they have to pay back to investors for improving their creditability. Similarly, I suspect we enter a paid internet phase where we see more and more products and services being offered at a price rather than free. Below is shown the life cycle of freemium customers over time; I believe this trend should follow the ‘freemium internet life cycle’.
Share of freemium users over time (Kumar, Vineet. “Making “Freemium” Work.” Harvard Business Review, https://hbr.org/2014/05/making-freemium-work Accessed 21 June 2023.)
Open source vs. subscriptions
When the internet started ('as this experiment'), it was free to let users join and come into the network. However, when the user base was sufficiently large to sustain ecosystems, the Internet became a ‘serious business’. Eventually, the freemium models getting into trend significant chunks of the internet are buried in subscriptions. The datasets and the open information greatly fostered by the open source community and the government are growing at 16.2%. In contrast, the growth rate for subscription models is growing at 18.3% in the year 2022.
Subscription models vs. open dataset growth rate
The acquisition of GitHub by Microsoft introduced a notable feature: the ability to create private repositories. This development raises questions about whether it will foster a more private internet environment within open-source communities and entice new tech entrepreneurs to opt for private repositories instead of open-source. It poses the possibility of initiating a subtle shift in the behavior of the open-source community.
Privacy
Also, to maintain a sustainable model and privacy, the business starts charging a subscription fee since companies realize that if they offer services for free, they might not have to go again to court for privacy issues.
But the key here is bearing the cost.
Ensuring privacy would add to the burden of delegating costs to the consumer, which in turn might produce some kind of discrimination for data access. I wonder, to figure out a viable model, a trend might have emerged for companies - for example, Twitter or Instagram charges customers a monthly fee.
Picture showing increasing coverage of population under modern privacy regulations (“Which States Have Consumer Data Privacy Laws?” Bloomberg Law, 3 May 2023, https://pro.bloomberglaw.com/brief/state-privacy-legislation-tracker/. Accessed 21 June 2023.)
Restricting data access would reduce new training sets for AI startups and may hamper the continuous improvement process for these companies.
CI/CD cycles
A lot of things happen in the background on our phones to make our experience smoother. App updates are scheduled at night, which helps detect security issues and bugs from silently passing diagnostic information, crash reports, or access violations/ attempts on databases. This makes the Industry-CI/CD life cycle and a seamless experience for end users. Imagine this information being private and not shared, prone to the information being framed as “private information.” Our CI/CD life cycles would be greatly impacted by this. For example, Android shares the diagnostics data for quick detection and fixing of bugs or security issues, whereas Apple requires you to install a profile or turn on the diagnostics information to Apple; this might result in a slower annoying user experience in case of bugs sometimes.
Conclusion
In conclusion, the transition towards a paid internet model is underway, driven by the need for sustainable business models and privacy considerations. This shift has implications for open-source communities, data access, and the decentralization of AI.
Works Cited
Kumar, Vineet. “Making “Freemium” Work.” Harvard Business Review, https://hbr.org/2014/05/making-freemium-work. Accessed 21 June 2023.
“Open Source Services Market Size, Share and Global Market Forecast to 2027.” MarketsandMarkets, https://www.marketsandmarkets.com/Market-Reports/open-source-services-market-27852275.html. Accessed 20 June 2023.
“Subscription Business Revenue Grows 437% Over Nearly a Decade as Consumer Buying Preferences Shift from Ownership to Usership.” Business Wire, 3 March 2021, https://www.businesswire.com/news/home/20210303005291/en/Subscription-Business-Revenue-Grows-437-Over-Nearly-a-Decade-as-Consumer-Buying-Preferences-Shift-from-Ownership-to-Usership. Accessed 20 June 2023.
“Which States Have Consumer Data Privacy Laws?” Bloomberg Law, 3 May 2023, https://pro.bloomberglaw.com/brief/state-privacy-legislation-tracker/. Accessed 21 June 2023.
