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Apple “Blocks” Facebook, Google Surrenders - Paywall Subscription Economy Looks Better

Well, it's finally happened.

Last week TechCrunch's exposé on Facebook's bad acting sent social media into a frenzy. The veritable data collection dam has broken; years and years of private data being farmed by social giants has culminated in a major company, Apple - shutting off the spigot of another major company; Facebook.

Okay, so maybe it isn't quite that intense. But it has had a major impact. Facebook is definitely in some hot water. Their app, Facebook Research, was being used to gather information like web activity, contacts, and even Amazon purchase history from users ranging in age from 13-35. Doing this outright would have made the app ineligible for upload to the App Store, as it violates Apple's terms of service.

I know what you're thinking. "Now hold on there, Skeeter. Maybe Facebook didn't understand what was going on here!" Aha! Not so. Only as recently as August of 2018, Facebook had to remove its VPN app "Onavo" from the App Store for violating the exact same terms. But wait! There's more! Facebook, knowing that they shouldn't do what they were doing, used a loophole to evade Apple's ToS…

Essentially Facebook used a developer-only version of the App Store called the "Enterprise Developer Program", which has slightly less stringent policies, to push the Facebook Research app to its customers. The problem lies in that this "back door" version of the App Store is intended for companies to be able to use company apps with company employees for the convenience of the company. But Facebook has been using the Facebook Research app with customers - offering them up to $20 a month for allowing them to gather the data.

Obviously, this did not sit well with Apple. They have effectively shut down Facebook's access to the developer section of the App Store, leaving them somewhat hamstrung and at the mercy of Apple and the App Store's full-on ToS. They are currently unable to push through updates or use back-door employee apps. This has left some thirty-three thousand employees, many of whom had no knowledge of this breach of contract, scrambling to find their next steps. Still, some are unsurprised. Kevin Roose, a tech columnist for The New York Times on Twitter said; "It's weird but probably necessary/inevitable that Apple is now Facebook's de facto privacy regulator."

Somewhere in another sector of crazy-huge companies, somebody at Google noticed what was going on with Facebook and thought, "That… sounds strangely a lot like what we're doing now..." And indeed they were. TechCrunch reported that Google's app titled "Screenwise Meter" had been similarly gathering data from users ranging from 18-35 years of age and even went as low as 13 years of age if the participant was joining as part of a group including somebody over the age of 18. This app would offer gift cards in exchange for users' consent to gather their data. They even offered routers to replace the ones participants owned, in an effort to fully domineer the Internet traffic of the homes.

Google saw Apple's actions toward Facebook as a warning for what might happen to them if they didn't stop and they reacted, quickly removing the app from the iOS App Store and issuing a heartfelt apology to TechCrunch;

"The Screenwise Meter iOS app should not have operated under Apple's developer enterprise program — this was a mistake, and we apologize. We have disabled this app on iOS devices. This app is completely voluntary and always has been. We've been upfront with users about the way we use their data in this app, we have no access to encrypted data in apps and on devices, and users can opt out of the program at any time."

Due to their willingness to admit their mistakes –unlike *cough* Facebook *cough*– it is unclear if Google will suffer any form of retaliation from Apple. Needless to say, however, this whole ordeal has left a bad taste in the mouths of people who use Facebook's and/or Google's technology to help target their respective demographics with ad campaigns. David Heinemeier Hansson, esteemed founder and CTO of BaseCamp, stated on Twitter;

Indeed, it would seem that to publicly ally ones' self to a scandal such as this would be PR suicide in many cases. Digital ad-based revenue has already been falling in recent years. It's no surprise, though, when you consider the facts. One study found that 70% of frequent digital users dislike ads that appear on their mobile devices and 73% dislike pop-up ads on their desktops and tablets. This translates as the following equation:

More ads + Lower Customer Satisfaction = Less customers = Less revenue

This factor plus the growing distaste in the marketplace for the practices of companies like Facebook and Google has led companies, web developers, and everyday people to find a way besides ad-sourced revenue.

A go-to solution? Subscription-based models. You've seen these before. Netflix, Hulu, Lootcrate, Dollar Shave Club, Ipsy and Blue Apron are all notable examples of subscription-based services that have seen booming success. Also notably, many online newspapers and magazines have begun to switch to website subscription models - also known as paywalls. Yes, the Subscription economy has been on the rise since the mid 10's, and it doesn't appear that it'll be going away anytime soon.

If you're looking for a paywall provider to get you jump-started into the subscription economy, I'd like to help. Click here to see a list of all the big players in the paywall vendor space.

Not convinced paywalls are good? See Nick Johnson's talk at WordCamp for publishers in Chicago - Why Paywalls are Good for the Open Web.

Daniel Hinkofer is Customer Operations Manager of Sabramedia’s Pigeon paywall. Daniel is the front line of customer service for Sabramedia. He also manages Pigeon’s social media and, as a result, remains closely plugged into subscription and SaaS culture on a daily basis.