Feature: Contributed Opinion

Just two weeks ago, privacy was called "a major obstacle" to ITV (Wired) and no one knows how consumers might react to any changes in civil liberties. Having less privacy to benefit national security is one matter - having less privacy to benefit ITV companies is an entirely different matter. Tracking what a person watches on TV and then selling it to advertisers could supplement ITV subscription fee revenues, but at what risk?

In its 2000 Annual Report, TiVo wrote: "Consumers may be concerned about the use of personal information gathered by the TiVo Service... Privacy concerns, however, could create uncertainty in the marketplace for personal television and our products and services. Changes in our privacy policy could reduce demand for the TiVo Service, increase the cost of doing business as a result of litigation costs or increased service delivery costs, or otherwise harm our reputation and business." When this report was written, Americans ranked the loss of personal privacy as their number one concern about the 21st Century (Wall Street Journal).

A possible solution to the balance between subscriber privacy and ITV profits can be found in the activities of a progressive retailer in Europe, which sells everything from food to luxury items. This retailer offers a special service that is specifically designed for people who do want privacy. This retailer has designed a unique service where people describe what they want to a personal shopper. The shopper then goes to the store and makes the purchases without revealing the customer's identity. This solution is significant because (1) "know thy customer" has been replaced by "know thy customer's needs"; (2) the "unfulfilled demand" data is estimated by a top U.S. marketing strategist to be 600% more valuable than traditional demographic or profile data because the guesswork of what someone wants has been completely eliminated; (3) this service attracts a type of customer that has a higher than average income and is prepared to pay a premium for products; (4) advertising costs are low (zero in this case), and (5) customer loyalty is high. This strategy could work for savvy ITV firms that want to acquire and retain higher-value customers, increase loyalty, improve promotional yields, obtain better marketing data (unfulfilled demand), and gain a competitive advantage over other companies.

Here's how this service could work for firms like TiVo:

1. The privacy policy could be changed to say: "We will never release your name or any personally identifiable information about you unless required by a law enforcement authority."
2. Along with their viewing preferences, subscribers could enter information on goods and services that they intend to purchase. People have less and less time to shop and appreciate help finding the right item at the right price. For this to work, however, they would have to be 100% confident that the service would not misuse this information.
3. All personally identifiable information would then be removed (not a trivial task) and the remaining unfulfilled demand data could be used in a variety of creative ways to enable no less than half a dozen new revenue models.

Doug Peckover is a strategic privacy consultant. He can be reached at doug@yourcommand.com

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