You've probably heard the saying that if you're getting the product for free, then you probably are the product. The most recent earnings report from Fitbit might be the ultimate proof. While its fitness wearables cost a pretty penny, they're almost useless without the backend services that collate and give meaning to your data. Now, on the back of a US$113M loss on almost US$400M of revenue, the company is looking for ways to monetise all those steps and activities.
This time last year, Fitbit recorded a profit but it's been a tough year. While the new Fitbit Iconic has come to the market, bringing GPS and waterproofing to the company's smartwatch products, they have faced stiff competition as Apple has continued to improve the Apple Watch while keeping prices competitive.
Fitbit has been partnering with various health services organisations in the US. And all that data they have gives them leverage in the types of products and services they can offer.
In other words, they have an opportunity to monetise all that data they hold through partnerships with health services providers, insurers and other industries that could use the data.
In principle, I don't have a huge problem with this as long as the data is de-identified and the privacy of individuals is protected. But it's important to realise that when you store your data online for no cost, it only makes sense to the service provider if they can make some money from it.