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Financial Times
Financial Times
Business
Tim Bradshaw in Los Angeles and Hannah Kuchler in San Francisco

Online addiction: big tech’s balancing act over responsibilities and revenues

Like many iPhone owners, Tim worries that he is spending too much time staring at the glowing black rectangle in his pocket. “I have to tell you, I thought I was fairly disciplined about this, and I was wrong,” says the 57-year-old from Alabama. “When I began to get the data, I found I was spending a lot more time than I should.”

It is a problem familiar to many — yet one that he is uniquely positioned to solve. As Apple’s chief executive, Tim Cook has to strike a delicate balance between addressing screen addiction and admitting that his company might be to blame for it. He told CNN last month that he wanted Apple customers to be “satisfied and empowered” by its devices but insisted: “We’ve never wanted people to spend a lot of time on them, or all of their time on them.”

His comments coincided with Apple unveiling a set of controls in its iOS operating system designed to let users track how much time they spend on apps and to cut down on the number of notifications they receive. “Empowering people with the facts [will enable them] to decide for themselves how they want to come back, or if they want to come back [at all],” Mr Cook said.

Yet when Apple marked the 10-year anniversary of the iPhone app store just a few weeks later, its press release celebrated the popularity of Angry Birds, Candy Crush Saga and Instagram without acknowledging the role that its platform’s barrage of pings and notifications has played in training consumers to be constantly checking their screens.

Digital distraction has been blamed for a range of ills, from ruining dinner-table conversation and disrupting sleep patterns, to interfering with children’s education and contributing to an increase in anxiety and depression — even putting young people at higher risk of suicide. In June, the World Health Organization created a new classification of “gaming disorder”, to describe people whose personal or professional lives have seen “significant impairment” due to excessive video gaming.

Asian societies have been trying to address the issue for longer. In 2015, the South Korean government mandated that all smartphone users under the age of 19 install an app that allowed parents to monitor their activity. In China, internet and gaming addicts have been sent to “boot camps” for rehabilitation.

Now Silicon Valley has taken what is widely recognised as the first step towards treating addiction: admitting that it has a problem. But internet companies such as Google, Facebook and Twitter rely on winning consumers’ attention to secure advertising revenues. The internet boom over the past decade, just like the dotcom bubble before it, has largely been fuelled by eyeballs — only this time, in such huge numbers that marketers have been eager to pay to reach them.

Some tech groups are trying to tackle the problem themselves.

Evan Sharp, co-founder of Pinterest, says the scrapbook app is pushing people to spend more time offline. Pinterest’s “tried it” buttons encourage people not just to browse mindlessly, fantasising about a better life, but to upload photos showing they really did make a recipe or complete a craft project.

“The most important thing to me is just trying to help people spend time on themselves,” he adds.

Investors are likely to see a conflict of interest over Mr Sharp’s comment. There is only so far that internet companies can go in encouraging their billions of users to tear their eyes away from their apps before shareholders start to worry about the impact on revenues.

Given that smartphones are the most popular device for going online, campaigners have focused their attention on Apple and Google, which makes the Android operating system run by the vast majority of the world’s smartphones, ìdentifying them as the gatekeepers to this world.

In January a pair of Apple investors, Jana Partners and the California State Teachers’ Retirement System (Calstrs), wrote to the iPhone maker urging it to consider the “potential long-term consequences of new technologies” when they are invented.

“Apple can play a defining role in signalling to the industry that paying special attention to the health and development of the next generation is both good business and the right thing to do,” they wrote. In an implicit comparison to the regulatory crackdown and litigation that has swamped the tobacco and oil sectors, the investors warned: “Companies pursuing business practices that make short-term sense may be undermining their own long-term viability.”

How Big Tech is tackling screen addiction

Apple

Screen Time — daily and weekly activity reports that show how long iPhone users spend on each app.

App Limits — blocks access to a specific app after a set amount of time each day. Parents can mandate children’s “downtime” hours, such as overnight, for some or all apps.

Google

Android app dashboard — a ‘complete picture’ of an individual’s phone usage, including time spent on phone, on apps and notification frequency.

YouTube ‘breathers’ — timed reminders for users to take a break from watching online videos.

Facebook

News feed changes — updated algorithms prioritise posts from friends and family instead of ‘clickbait’ news and videos.

Time tracking — Facebook and Instagram’s apps will offer ‘usage insights’, revealing how many minutes users spend on them each week.

Serious legal threats or class action lawsuits have not yet emerged around smartphone addiction. Nonetheless, both Google and Apple have taken steps to address the issue.

Google’s Digital Wellbeing tools and Apple’s Screen Time offer new dashboards that calculate how long a smartphone user spends staring at particular apps and offer the ability for parents and individuals to set time limits. Apple will allow parents to shut off specific apps and games on their children’s devices at certain times of day using its time tracking system.

They are also tweaking how their smartphones handle alerts or push notifications, to make them easier to mute or filter. Those tools will be released this year as part of the next versions of Android and iOS.

Apple’s Mr Cook has said that its new features were in development long before shareholders started to agitate about these issues. But with Big Tech companies under intense regulatory pressure over taxes, privacy and anti-competitive behaviour, the industry has been trying to get out in front of screen addiction.

For families in particular, a serious response from Silicon Valley cannot come soon enough. Jean Twenge, author of iGen, a book on “super-connected kids”, says parents have been “crying out” for the kind of controls being introduced. “It is a really welcome development . . . and it looks easy to use, which is another really key thing.”

Apple, which unlike Google makes most of its money from selling devices rather than advertising, has an opportunity to turn a liability into a selling point, Ms Twenge adds.

“Parents might be more likely to buy their kid an iPhone if it had better parental controls, so it makes sense with their business model,” she says. “For Facebook, Instagram, Snapchat and other apps it is a much harder sell — their business models are based on people spending more time on the site.”

Lynn Perkins, chief executive of US babysitting service UrbanSitter, says managing the screen time for her three children, aged five to 10, is a very different proposition to television, because the displays are so small and personalised. “It would be great to see something that shows you [just] what [apps and games] they have been on,” she says.

Ms Perkins admits that the responsibility ultimately lies with parents, not tech companies, to manage their children’s smartphone usage. In her household, that has meant establishing “no screen Tuesdays” when the entire family puts away its phones.

Apple has won plaudits for its recent moves. Jana and Calstrs, the investors that called on the company to tackle screen addiction in January, welcomed its “huge step in meeting that challenge” in June, praising its “ethical leadership”.

Yet some campaigners want to see Silicon Valley companies, which together have hundreds of billions of dollars in cash at their disposal, to go further.

David Greenfield, a clinical psychologist who founded the Connecticut-based Center for Internet and Technology Addiction, is pushing for greater education. “The internet is addictive, smartphones are even more addictive,” he says. “Anything we can do to educate people will help with that.”

He warns that the features launched by the large tech groups may not help the “hardcore addicts” — smartphone users who are spending more than the average five to seven hours a day on screen.

Dr Greenfield also questions whether the companies are introducing the measures simply to improve their own image, in the face of shareholder and public criticism. “It is hard not to be a little sceptical about their intentions,” he says, adding that the problem has been around for a long time — he wrote his first book on tech addiction in 1999 — but the companies have taken 20 years to respond.

“They knew this tech was addictive from early on. The warning signs were pretty clear. Facebook designs its technology to have social validation loops — the whole use of ‘likes’ is designed from the ground up to be addictive,” he adds. “They know intermittent reinforcement is more likely to push people to use it over and over again.”

Dr Greenfield would like to see warning signs flash up when people turn on their smartphones, informing them of the dangers of addiction and of driving while using devices, in an echo of those developed to stamp out drink-driving.

“We went through a lot of issues with cigarettes, alcohol and gambling, a lot of it was unregulated at first. Then it became more regulated and more controlled and the industries were required to donate to public education and treatment,” he says.

Faced with this onslaught of new technology, parents are struggling even to answer questions about how much time on technology is “too much” and at what age it should be limited.

Mr Cook has said that customers checking their iPhone every five minutes might be too much but has not suggested how often would be considered OK. But it is not just a matter of frequency. The question becomes even harder when some apps, such as the world-building game Minecraft, aimed primarily at children aged seven and over, might be considered partly educational, as well as potentially addictive.

“It’s been an amazingly fast-paced, explosive 10 years, whether you are a company working on this or a consumer,” says Linsly Donnelly, a mother of three living in the San Francisco Bay Area. “Culturally we are just pausing and saying, ‘wait a minute, we need to have a moment of reckoning in how we deal with all of this’.”

In 2015, Ms Donnelly became frustrated at the limited options available for parents to filter the millions of online apps and videos, to see what she felt was appropriate for her own children. So she launched a start-up, SmartFeed, with the idea to build a tagging system — a cinema-style certification scheme — for apps and videos based on both age ranges and character traits to help parents avoid apps that might encourage compulsive behaviour.

Ms Donnelly believes that “doing right by children and making money do not have to be mutually exclusive”. Yet despite the lip service that many in Silicon Valley are paying to these issues, SmartFeed has struggled to win funding from venture capitalists or the tech companies. Potential investors, she says, questioned the business model, saying such guides already existed or that it would be difficult to make money outside Apple and Google’s app stores.

Ms Donnelly cites the example of organic food, which 20 years ago was written off as a niche sector. As organic standards were established by farmers and environmentalists, the likes of Whole Foods emerged to build a sustainable retail model.

But with so many people hooked on checking their apps and feeds and the tech industry dependent on the advertising income that the activity generates, it is unclear exactly who in Silicon Valley has the incentive to become the Whole Foods of digital consumption.

Digital meditation: listen to the data protection laws for peace of mind

Apps like Calm and Headspace have a business proposition designed to harness our obsession with our smartphones but for good: they are trying to provide some peace in our pockets.

The meditation apps use notifications to encourage smartphone users to take time out, put in their headphones and float away to the sound of birdsong or self-care platitudes. Just like Snapchat engages users eager to carry on sending photos to a friend, they track how many days in a row you have logged on.

Once there, you can choose from different 10-minute meditations, often arranged in courses of seven or 21 days on a particular topic. Calm even has soothing sleep stories, including one where BBC announcer Peter Jefferson reads extracts from the EU’s General Data Protection Regulation designed to lull you to sleep.

Instead of barraging the meditator with advertisements, both apps are embracing a new, yet oddly traditional, business model of charging for their product. Headspace charges $12.99 a month, while Calm costs $59.99 for a year. Calm is reported to have made annual revenues of $60m in 2017, when it was named Apple’s App of the Year.

Investors seem to think that being mindful will be profitable in the long term. San Francisco-based Calm raised about $25m at a valuation of around $250m in a fundraising round earlier this year, from venture capitalists including Insight Venture Partners and Ashton Kutcher’s VC firm Sound Ventures.

Headspace, based in Santa Monica, raised $37m last year, bringing its total funds to about $75m. Investors include the media company the Chernin Group and Boston-based Spectrum Equity.

But so far, no large technology companies have created their own copycat meditation features. Hannah Kuchler

Copyright The Financial Times Limited 2018

2018 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.

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