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This private life: The growth of the privacy industry

Technology is entering a new era of data privacy.
02 January 2022Alex Linton

Everything from location tracking to cursor tracking has been used over the last 20 years to build a colossal market based on exploiting people’s privacy to drive a multi-billion dollar advertising engine. The ad profit engine has delivered us tech giants like Meta (formerly known as Facebook) — which rakes in $84 billion a year in ad revenue. 

But the consumer market is currently in the beginning of a seismic shift — a shift towards privacy. People have had enough of businesses like Facebook, and are demanding that companies respect their privacy. A 2019 consumer survey showed 84 per cent of people care about their privacy, and 46 per cent feel like they’ve lost control of their data.

Start-ups and tech companies focusing on privacy—like ProtonMail, DuckDuckGo, and Session—are seeing hundreds of millions of users join their platforms in search of privacy. Projects like ProtonMail are proving that users are willing to pay for their privacy, meaning subscription-based privacy alternatives could emerge as a new business model capable of competing with ad-driven platforms. In more privacy-aware markets, such as Germany, privacy-focused apps are already succeeding — encrypted messaging app Threema became Germany’s most popular paid app within just a few years of its launch. 

Right now, the data privacy software market mightn’t be as big as ad-based platforms like Facebook, but the privacy market is already undergoing a rapid growth period which will continue throughout the 2020s.

Seedlings emerge: The success of privacy tech

The desire for privacy-oriented technology has become clear over the last few years. The constant barrage of articles, Twitter threads, and whistleblowers detailing the unscrupulous behaviour of large tech companies like Facebook and Amazon is a constant reminder that people should be concerned about their online privacy. And as COVID-19 has caused people to spend more and more time online, concerns over user privacy have continued to grow — with issues like location tracking, data sharing, and information security coming to the forefront. 

Without the waterfall of resources that ad-based revenue provides, privacy-focused alternatives have traditionally lagged behind in terms of features and overall user experience. After a lot of hard work by a lot of talented, principled people, privacy has caught up. Several successful services have broken the trend and created slick, feature-rich, and private technology alternatives — and they’re just the first of many. 

Session has grown by nearly 500 per cent in 2021
Growth from mid-way through 2021
End-to-end encrypted email provider ProtonMail expects to tick over 75 million users in 2022, a 50 per cent increase on their user base in mid-2021. Between 2020 and 2021, privacy-focused search engine DuckDuckGo saw a 55 per cent increase in search traffic. And in Oxen’s own backyard, Session saw over a 500 per cent increase in user numbers in 2021.

Users are quickly adopting private alternatives to the apps they utilise every day. Gmail gets tossed out for ProtonMail; Google gets dumped in favour of DuckDuckGo; WhatsApp is deleted and Session is installed. It’s an easy equation: when it’s slick and simple, people choose privacy. 

But where does the money come from? Ad-based services have fine-tuned a lucrative, scalable business model based on user data, but privacy tech doesn’t have that option. Are people willing to pay for services with their money instead of their data? The evidence says yes.

By the numbers: Will people pay for privacy?

For a long time, detractors and pessimists have claimed that privacy just...isn’t sustainable. Where is the money going to come from? People have come to expect things for ‘free’ on the web, and they’re used to trading their data for services. Can businesses expect users to pay a premium for privacy? Will people really do it? 

The answer is yes. 

In an analysis completed by Ajit Ghuman, it was found consumers are willing to pay a premium for privacy on social media and smartphone devices. Ghuman found that half of people (read: billions in the global market) were willing to pay a monthly subscription fee of $8 to maintain privacy on social media. 

Source: The Emerging Market For Privacy

Even at higher monthly costs, a large proportion of people are still willing to commit to a monthly subscription if it means their data stays private and secure. 

Although services like ProtonMail have said the majority of their user-base are free users, the amount of users who do pay is enough for the company to shine — showing privacy tech can thrive using subscription models. As more users arrive, and concerns over data privacy continue to swell, subscription models seem like a clear path forward.

Big picture: The data privacy software market

As we see more and more products based on protecting data preserving privacy succeed, it follows that the industry overall is in a big growth period. Although some people are continuing to overlook the value of privacy, the overwhelming wave of privacy-concerned consumers is ready to come crashing down. 

As of 2020, the data privacy software market was estimated to be worth just over $1 billion. But with the shifting landscape of technology, it’s expected to reach almost $18 billion by 2028 — an astonishing compounding annual growth rate of over 41 per cent.  

Session's 'App Privacy' section on Apple's App Store
Session’s ‘App Privacy’ section on Apple’s App Store
The privacy industry is in the early stages of a huge upwards trend. Privacy is a fundamental issue which will always represent value, regardless of what’s in vogue. The most valuable company in the world, Apple, has already taken some big steps to position themselves as a privacy-positive tech company.

These are the first moments of a future where we see strong, consistent growth in the privacy industry — and Oxen is not just on board, we’re at the forefront. 

On the ranch: Oxen’s place in the privacy industry

Privacy is at the very core of what Oxen is. Everything from OXEN itself to the apps running on the service node network—Session and Lokinet—is focused on privacy. We are writing code, building products, and spreading the word. 

Right now—especially in the world of crypto—privacy might not be a hot topic, but the wider technology industry is recognising the value of privacy tech, and the best available market research says the privacy market will be 18 times its current size in 6 years time. Oxen is one of the most creative, innovative, and disruptive projects in the entire privacy space — and we are well and truly ready to ride the wave. 

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