Digital exhaust royalty: will it solve some of Facebook and Google’s personal data usage travails?

Has the time come now for users to be paid royalty for use of their “digital exhaust” by corporations like Facebook and Google? Will a digital exhaust royalty framework be win-win for both: the corporations whose business model is based on the monetizing of this exhaust; and the individuals who are increasingly wary of this exhaust being put to wrong use without their knowledge or permission?

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I like to make beginning of the year predictions about what technological innovations will come to play in the New Year. Some I get right, but yes, some I do get wrong. One such prediction which did not come to fruition was the one I made in 2015:

‘Pay me or else stay away’

Some capabilities for monetizing the digital exhaust created by individuals will emerge so that they can track and receive "royalties" for use of the same by corporations; and some of their privacy concerns can be mitigated ("pay me if you want to use my location data or online purchase history”)

But now as the Facebook/Cambridge Analytica scandal plays out and with GDPR looming on the near horizon, I think it may finally be time for the idea to come to life.

Users have gotten used to the “free” services which Facebook, Google et al provide. But everyone knows at the back of their mind that given the multi-billion-dollar revenues these companies are generating, nothing is actually free. The users’ data is being bundled and sold to marketers and the like so that they can do targeted messaging. The data is as likely to be used by a product marketer for targeted ad placement as it is by a political party for focused political messaging.

The core item at play is our “digital exhaust”. McKinsey in 2013 had talked about organizations mining “exhaust data” (Competing in a digital world: Four lessons from the software industry):

In addition to creating new revenue streams by amping up traditional product and service offerings, organizations have been mining “exhaust data”—information that is a by-product of normal business operations—for use in developing new products. Such by-products, for instance, allow credit-card companies to monetize transactional data from cardholders by analyzing and selling these data to merchants.

But since then the exhaust has amplified. All our actions are generating “digital exhaust”: every credit card swipe, every click of a smart television remote, every google search, highway cameras, phone records, medical history, social media likes, every purchase transaction etc.  All these are available for companies to bundle and market to the highest bidder.

In fact, I would say companies like Facebook and Google are in the business of monetizing digital exhaust. And that’s not a bad business to be in per se. They figured out a way of monetizing something and providing something of value to us in return (say search or socialization or navigation) and in the process generating even more digital exhaust for them to monetize.

The business model as it exists now allows these companies unlimited liberties to use the exhaust and may have become increasingly lopsided in their favor as their burgeoning revenues indicate.

Is it time now for the pendulum to swing back a bit now towards the users who are generating the digital exhaust in the first place. This brings me back full circle to my original premise – Has the time finally come now “for monetizing the digital exhaust created by individuals so that they can track and receive ‘royalties’ for use of the same by corporations.”

Having a well-defined royalty framework can help alleviate privacy concerns. People will be compensated for use of their information and they can track who or what it is being used for. A user can choose what kinds of uses his/her data can be used for: viz. will accept royalty for use by marketing companies but will opt-out for usage by political targeting.

A royalty framework already exists for music, entertainment and publishing industry. Royalty accrues to recording artistes or performers every time their music is played on the radio or show airs on the television.  Now I am talking about evolving that framework for the digital era where every person is an artiste, their digital exhaust is their music creation and use by another party is akin to the song being played on radio.

Pipedream or reality?

I think technology and public opinion is evolving to make such a model feasible:


Blockchain could emerge as a way of tracking the use of a person’s digital exhaust.

This will be an extension of a trend that is already emerging in the entertainment industry: Is Blockchain The Answer To Better Royalty Accounting and Payments? What this article proposes for music royalty can very well apply to digital exhaust royalty too:

Put simply, the blockchain format can embed all the necessary accounting, usage rights, and creator credit information right into the song file itself. That means wherever that file goes, the information needed to know who to pay, how it can be used, and more travels along with it.

All digital exhaust “transactions” for a person can be tracked in a blockchain ledger and royalty revenues accrue in a crypto-currency like bitcoin.

Public Opinion

Elon Musk has talked about something akin to a Universal Basic Income to deal with the problem of robots/automation taking away jobs. Others have said the same thing too (Fortune: “What Governments Can Do When Robots Take Our Jobs”).

That may sound controversial right now but public opinion seems to be shifting (see LA Times: “Conservatives, liberals, techies, and social activists all love universal basic income: Has its time come?”).

Let’s take the Universal Basic Income premise a bit further. What if in a robotic era, the digital exhaust which we now consider a byproduct becomes the actual product which most humans create. If producing digital exhaust is the “job” then shouldn’t humans be paid for doing that? Could the Universal Basic Income rather than being a dole, be a fair wage for the job being performed- creation of digital exhaust?  

Much needs to happen before a Digital Exhaust Royalty framework becomes a reality. But the question is not about why or how but when. What was a pipedream in 2015 may very well become a reality by 2020. What do you think? Stay tuned and join the conversation.

Copyright © 2018 IDG Communications, Inc.

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