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August 1, 2013

Monetizing a Specialized Network

Posted by Simon Towers (View Profile | View All Posts) at 7:14 AM

Arlington Police Social Media - Are you Ready? [Source:arlingtonpolicemedia https://www.youtube.com/watch?v=4GpqVrNTpVk]

Retailing is a diverse sector. On one hand, a big box chain offers everything under the sun for cut-rate prices. On the other, the high-end boutique sells just a handful of luxury items at much higher margins. Both business models fulfill important positions in the overall retail market.

We're seeing social networks develop in much the same way. The Facebooks of this world appeal to everyone. There's also room for specialized, niche networks. Entrepreneurs are figuring out innovative ways to monetize those groups as well.

A one-time "top cop" of the New York, Los Angeles, and Boston police departments, William Bratton, recently unveiled a social network for law enforcement. BlueLine is aimed at police officers around the world; its premise is that crowdsourcing for cops will have an exponentially efficient effect on crime prevention and analysis.

In North America and in Western Europe, towns and cities are tightening their municipal budgets. Often the most contentious budget cut in any city is to the police force. The reasoning goes that protecting a community from crime is among the most important services of a local government. So budget cuts should come from other places.

Bratton is a veteran police chief who well knows that police departments can nevertheless come under the knife of city councils looking to save money. Part of BlueLine's proposition is that by crowdsourcing the law enforcement community, financially strapped communities can make do with fewer resources by making police work more efficient. Indeed, the success of BlueLine and other specialized social networks rests on their ability to monetize themselves in such a way that a subscription and associated costs are perceived as less than the cost of additional local manpower.

Part of the appeal of a specialized social network is not unlike a mainstream one: the plethora of apps that developers create around the network. Data analytics companies are reportedly developing BlueLine applications that allow cops to create databases of everything from gang tattoos to graffiti tags. The 19th-century sleuth Sherlock Holmes would have loved having such databases at his disposal!

Business models for the big social networks like Facebook tend to be advertising based with specialized ads aimed at individuals or segments within a huge user audience. And with over a billion subscribers who readily share their personal information, it's relatively easy for Facebook to develop targeted advertising. But specialized networks often need to charge fees for a subscription. BlueLine's pricing model has not been made public yet, but I suspect its owners will establish a subscription based model charging local police departments an annual fee based on the size of their police force. Targeted ads for personal items and services to individual officers will create another revenue stream.

In essence, the fundamental promise of social networks is their ability to offer more for less. But what are some of the more intangible costs? When it comes to a social network for police, for example, I'm thinking of the potential costs involved with security breaches. Sharing best practices shouldn't come at the expense of putting confidential information at risk. The newest and most virulent kind of criminal is the cyber-thief. Can you imagine the bonanza that hacking into a private police network would provide?

To his credit, Bratton has said that BlueLine's network will be secure and will require multiple verifications to join. He said is protocols are based on the FBI's Criminal Justice Information Services guidelines, which transmits secure criminal case information online. We should remember, however, what a thrice-married real estate billionaire once said about prenuptial agreements: They are made to be broken. The same might be said of the security measures placed on social networks, however many protocols are in place.

Then there's the question of how a social network would distinguish itself from a legacy network such as Interpol. Police departments around the world have long shared information on this secure network. If it serves its purpose well, then do police officers really want to spend additional time (and their departments spending additional money) to discuss soft topics such as which kind of shoe is most comfortable to walk a beat?

One response to that question might be that for decades people chatted with friends and family over the telephone. Social media networks have simply provided them with a very attractive alternative to sharing their personal information. The new platform didn't replace the telephone, it complimented it.

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