BoSacks Speaks Out: When Loyalty Becomes Leverage

For years I have been warning that one of the greatest threats from the digital economy was not technology itself. It was surveillance.

The bargain always sounded harmless enough.

Give us your information and we will give you convenience.

Give us your browsing habits and we will give you personalization.

Give us your location, purchases, reading habits, and interests, and we will make your life easier.

What a wonderful fairy tale.

The reality is that much of the digital economy has been built upon collecting, analyzing, packaging, and monetizing information about us. We became the product.

Now that surveillance culture has evolved into something even more troubling.

It is called surveillance pricing.

This algorithm-driven practice uses personal information to determine how much an individual customer is likely willing to pay for a product or service. Rather than offering one price to everyone, the system attempts to identify who can be charged more and who needs a discount to complete the sale.

Imagine walking into a grocery store and discovering that the carton of eggs in your cart costs more than the identical carton in the cart beside you.

Not because of shortages.

Not because of transportation costs.

Not because of a sale.

Simply because a computer decided you would probably pay more.

To be clear, surveillance pricing is not the same as traditional discounting. Publishers have offered introductory subscriptions, student rates, and win-back offers for decades. Retailers have long used coupons and sales promotions.

Those practices are visible.

Those practices are understandable.

Surveillance pricing is different.

It is the possibility that two customers standing side by side may receive different prices for the exact same product based on what an algorithm knows about them. One shopper pays more because their buying habits suggest they are unlikely to complain. Another pays less because the system believes they might walk away.

The concern is not merely the price.

The concern is that customers may never know they are being evaluated, categorized, and priced by a machine.

Consumers are understandably uneasy.

Recent surveys indicate that 68 percent of Americans believe surveillance pricing will increase grocery costs. Only a tiny percentage believe it will lower prices. Those numbers reveal something larger than concern about inflation.

They reveal a growing lack of trust.

Yes, I know. Here I go again talking about trust.

At this point my readers may suspect I have developed a one-man obsession with the subject. Guilty as charged.

But everywhere I look, trust seems to be leaking out of the system. Trust in institutions. Trust in media. Trust in business. Trust in technology. Trust in the information economy itself.

Now consumers are being told that companies gathering intimate details about their lives can also be trusted to decide what price they should pay.

Good luck with that.

And now this issue has landed directly in the publishing business.

The Washington Post is facing a class-action lawsuit alleging that it used subscriber information to determine how much individual readers could be charged for digital subscriptions.

According to the complaint, the newspaper allegedly harvested subscriber information and used that data to estimate how much each customer might tolerate paying at renewal. The lawsuit claims that since the mid-2010s, subscriber data was collected and analyzed to determine how much additional revenue could be extracted from individual readers.

Think about that for a moment.

The more loyal you became as a reader, the more information could be gathered about you. The more information gathered, the more accurately the system could predict your willingness to pay.

According to the complaint, loyalty was not rewarded.

Loyalty became leverage.

The lawsuit further alleges that readers believed their personal information was being used for purposes such as improving services or delivering relevant advertising, not to determine how much more they could be charged. The plaintiffs claim that many subscribers had no idea this type of pricing analysis was occurring until disclosure requirements in New York forced the practice into public view.

Whether these allegations are ultimately proven in court remains to be seen. The Washington Post has not publicly responded to the claims.

But the accusation itself should make every publisher stop and think.

If the allegations prove true, it raises a troubling question.

Should loyalty earn a better deal?

Or should loyalty simply identify the customers from whom the most money can be extracted?

That question goes to the heart of the publisher-reader relationship.

For decades we have asked readers to trust us. We asked them to subscribe. We asked them to share information. We asked them to become members of a community.

A subscription was never merely a transaction.

It was a relationship.

If readers begin to suspect that their loyalty simply provides more data to help determine how much more they can be charged, the relationship changes.

The subscriber ceases to be a valued customer and becomes a revenue opportunity to be optimized by software.

That may make sense to an algorithm.

It is a terrible way to build trust.

Years ago I wrote about the fraud and opacity of the digital advertising ecosystem. Fake humans. Fake clicks. Fake websites. Ads nobody ever saw. Personal information bundled and sold to anyone with a checkbook.

Surveillance pricing feels less like a new innovation and more like the next chapter in the same story.

The technology industry promised personalization.

What consumers increasingly receive is monetization.

The danger extends beyond subscription pricing and grocery bills.

It strikes at one of the most fundamental principles of commerce.

For generations, merchants posted a price and customers decided whether to buy. Everyone operated under the same rules.

Today, the customer may no longer know the actual price.

The customer only knows the price assigned to them.

That should concern all of us.

It should especially concern publishers.

Journalism organizations have long positioned themselves as advocates for transparency, accountability, and informed citizenship. If readers come to believe that publishers are quietly using personal information to determine how much more money can be extracted from them, then we risk undermining the very trust upon which our businesses are built.

Trust was never a marketing slogan.

Trust was always the product.

For more than a century, publishers measured success by how many loyal readers they could attract and retain. We celebrated loyalty. We rewarded loyalty. We understood that every subscription represented a relationship built over time.

We should be very careful before embracing business practices that treat loyalty not as an asset to be honored, but as a weakness to be exploited.

Because once readers begin to suspect the game is rigged, they stop playing.

And when trust leaves the building, subscribers are usually not far behind.