Business Daily Media

Business Marketing

.

As tech giants face a financial downturn, some new players are focusing on people over profit

  • Written by Peter Bloom, Professor of Management, University of Essex
As tech giants face a financial downturn, some new players are focusing on people over profit

The tech industry has been rocked by recent economic woes. While once thought of as close to recession proof[1], companies from Netflix to Meta are suddenly experiencing serious financial setbacks. As the Washington Post reported[2] last week: “Big tech is bracing for a possible recession, spooking other industries”. Meta (the company that owns Facebook) has seen its share prices drop by more than 50% this year, with its iconoclastic CEO, Mark Zuckerberg, “visibly frustrated[3]” at recent company Q&As with employees.

There are a range of reasons for this downturn, including a troubling mix[4] of reduced consumer spending and fears of an uncertain future. The tech-focused Nasdaq index has dropped[5] 24% in value since January in this year alone, while lay-offs have been announced[6] across the industry – with some reports counting more than 60,000[7] tech redundancies globally so far this year.

In addition to cutting staff, technology companies are passing on these problems to consumers. People are already facing higher prices for some streaming services, and more increases are expected. Netflix has raised prices[8] for consumers in countries including the UK and the US. They are also trying to stop[9] people from different households sharing passwords. Amazon has also been criticised[10] for increasing its subscription fees recently for Prime delivery and streaming services.

Users have been cancelling subscriptions[11] to cut costs. Many of these services have become heavily embedded in our lives, however, with new technologies fundamentally transforming the way people interact, communicate, work and entertain themselves in recent years.

But there are growing concerns about the way these companies operate, aside from their profit levels and cost burden at a time of belt-tightening. Many users resent the fact that they still have relatively little power[12] over how these technologies are developed and consumed. Tech corporations largely set the prices and conditions for both users and workers.

While many consumers accept this state of affairs, others are attempting to challenge huge tech conglomerates with platforms that give consumers, creators and workers more power. This idea is extending into data use as well. Even before the economic downturn, people were raising serious concerns about the use of algorithms to shape what we listen to and watch, for example, as well as questioning[13] business models based on profiting[14] from user data.

New tech startups such as browser provider Gener8 are seeking to target this consumer dissatisfaction. With tens of thousands[15] of users already, this platform allows users to choose their privacy levels[16] and get paid for the data collected from their search activity. They can also use these funds to directly support ethical projects of their choosing.

Across a range of other sectors, platform cooperatives[17] want to revolutionise industries including transport and delivery by providing workers with fair wages and better conditions. Consumers are also given more say with the ability to jointly own, design and run these platforms according to their needs. Such initiatives are just starting[18] to make inroads against their much more powerful for-profit corporate competitors.

This movement is also affecting the entertainment industry by attempting to challenge for-profit streaming services. Means TV was created by the media producers Naomi Burton and Nick Hayes – famous for their viral campaign ad[19] for New York congresswoman Alexandria Ocasia-Cortez. It bills[20] itself as the “world’s first worker-owned, anti-capitalist streaming service”, with a democratic, cooperative structure in which all decisions are made by its employees, cooperative contractors and content creators. Members pay a US$10 (£8.18) monthly fee, but there are also reduced rate options for those who cannot afford this amount.

One full-time employee told the Guardian[21] that what makes Means TV so special is that the platform enables people to make TV and other media content with a small amount of money. Its subscription charges and donations directly fund artists so there are no pressures relating to advertising or corporate overheads.

Laptop, tablet and phone showing a streaming platform, financial charts, coffee cup
New tech business models aim to change how workers and creators are paid, as well as provide consumers with more choice and control in areas such as data. Metamorworks / Shutterstock[22]

The cooperative music streaming service Resonate applies the same concept to the music industry, in that it is owned[23] by “artists, listeners and workers”. While less explicitly political than Means TV, Resonate still aims to provide consumers with a new level of power and control.

Under the logo “play fair, pay fair”, the platform gives users monthly credits[24] to spend as they listen to music and after streaming the same track nine times, it is added to their library. It advertises itself as ad and bot-free, and doesn’t sell user data. Resonate’s payment system was also designed to pay artists fairly and more with each listen. By 2021, the service had almost 1,400 monthly users[25] and could potentially handle another 2 million users, according its creators.

These are just a few examples of alternatives that, more than simply rivalling popular tech giants’ offerings, provide people with greater power over the technology they consume. And while these ethical alternatives are still relatively small, they could signal the beginning of an important new era of consumer power for the tech sector.

References

  1. ^ recession proof (www.businessofbusiness.com)
  2. ^ reported (www.washingtonpost.com)
  3. ^ visibly frustrated (www.independent.co.uk)
  4. ^ troubling mix (news.crunchbase.com)
  5. ^ dropped (www.cnbc.com)
  6. ^ announced (news.crunchbase.com)
  7. ^ 60,000 (layoffs.fyi)
  8. ^ raised prices (www.thewrap.com)
  9. ^ trying to stop (nerdist.com)
  10. ^ been criticised (www.indy100.com)
  11. ^ cancelling subscriptions (www.independent.co.uk)
  12. ^ little power (www.fiercevideo.com)
  13. ^ questioning (www.groupsolver.com)
  14. ^ profiting (www.cnbc.com)
  15. ^ tens of thousands (www.realitytitbit.com)
  16. ^ privacy levels (gener8ads.com)
  17. ^ platform cooperatives (www.eesc.europa.eu)
  18. ^ just starting (techmonitor.ai)
  19. ^ viral campaign ad (www.youtube.com)
  20. ^ bills (means.tv)
  21. ^ told the Guardian (www.theguardian.com)
  22. ^ Metamorworks / Shutterstock (www.shutterstock.com)
  23. ^ owned (opencollective.com)
  24. ^ monthly credits (resonate.is)
  25. ^ almost 1,400 monthly users (www.theguardian.com)

Read more https://theconversation.com/as-tech-giants-face-a-financial-downturn-some-new-players-are-focusing-on-people-over-profit-187719

Tips For Choosing The Ideal Coffee Table For Your Living Room

In recent years, coffee tables have gained popularity in home decor, thanks to their versatility and stylish appeal. Available in a wide range of ...

Property

10 Terms to Include In Your Lease Or Rental Agreement

A rental or lease agreement outlays the rules agreed upon by landlords and tenants for their rental relationship. This agreement is a legally bind...

Business Training

How to choose the right freight company

Moving cargo to another state or country can be challenging, especially when you have to move some heavy load. You have limited time to deliver th...

Business Training

The Rise and Rise of Cyber Threats: Why Due Diligence is More Important Than Ever

It’s no surprise that Australia, like many countries, is facing a rise in cyber security threats with the latest Australian Cyber Security Center ...

Business Training

Tips for Keeping Your Business OSHA Compliant

As a business owner, you are legally and morally responsible for your employee's safety and wellness. OSHA sets standards and regulations that bus...

Business Training

Why Leadership Training Should Be Open For Freshers In The Corporate Sector

Yes, we know not everyone wants to become a leader - not everyone has leadership skills inside them. We agree, but then that is no reason why you ...

Business Training