The evolution of digital business models in 2020 and beyond
• March 19th, 2020
As concerns around trust, privacy, mental health and social unrest increase, Partner, Matt Basford, shares with us his predictions for changes to digital business models in 2020.
Over the past 12-18 months, there seems to have been a growing awakening to the impact technology is having on society - whether that be privacy and security, rising mental health concerns, political interference, the list goes on. Now, as we deal with COVID-19 - certainly not directly a result of digital & technology trends - we still find ourselves looking in the mirror asking ourselves “are we doing enough to support and prioritize our collective wellbeing?”
In August of 2019, nearly 200 of the top CEOs gathered at the Business Roundtable. They agreed that shareholder value is no longer the singular metric of business success, and greater consciousness and impact around environmental and human considerations must be paid. If we apply the same idea to digital product development, we must confront the fact that the experiences we are creating with technology must be more thoughtfully designed - and that starts with the business models themselves.
As concerns around trust, privacy, mental health and social unrest reach critical mass, we will see a major step change in new and diversified digital business models in 2020. The internet, and digital products in particular, have grown off the back of a largely ad-supported model. And ad-supported models benefit from two primary strategies: collect as much data as you can about your users and drive as much engagement with your product as possible.
Both, when taken too far, become problematic for society at large. We have reached that place. Data collection, misuse of data and lack of transparency around privacy have reached mainstream concern among consumers, particularly in light of controversies such as Cambridge Analytica.
As user engagement has become the primary design objective of most digital products, so too have addictive and persuasive design techniques. Consequently, we’ve created addictive behaviors at scale that are having serious adverse effects to mental health and societal polarization.
At the core of all of this is a digital economy that hasn’t had a suitable alternative to ad-supported products. In 2020 this will need to change. The digital economy depends on it.
We have seen the social adverse effects reach a point that we must evolve. We need to establish new models that still achieve an adequate value exchange, while also cultivating a healthy and transparent relationship with end users.
Some of this evolution will primarily be oriented to maximize value with end users. For example, we’re already seeing companies shifting from an ad-supported model to a subscription, or unbundling of content, model. With Netflix and Hulu facing Disney+ and Apple+ entering the space, we’ll see greater scrutiny over the content people actually want to pay for, and an opt-in structure.
Some of this evolution will be more about re-setting the foundation of how the web, technology and your personal data is considered. Tim Berners-Lee, the founding father of the web, has put out his contract for the internet, backed by Google and Facebook. It establishes nine principles to fix the internet from slipping into a “digital dystopia”. Similarly, former Googler Tristan Harris, has spearheaded the Center for Humane Technology, which seeks to reverse “human downgrading” that has occurred from highly addictive technology with ill-incentives. Off the back of their Time Well Spent initiative, technology platforms like Apple and Google have introduced Screen Time to help users become more conscious of the time they spend on their devices.
In 2020 we will see tech companies pioneering new approaches to digital engagement that prioritize mindfulness, positive body image, transparency and consumer control of data and more. This will transcend Corporate Social Responsibility and actually correlate to digital products that consumers want to use and be associated with.
Expect more brands to draw a line in the sand on these issues, moving beyond simply promoting these values to baking them into the business models of the products and services themselves.