Free in an economic crisis
I have a piece in the Wall Street Journal this weekend that talks about how Free is affected by recession. Short form: consumers flock to it, but companies have to think harder about how to make money from it. Ad-supported Free will fall, and Freemium will rise, but only for those who are clever enough identify premium versions of their product worth paying for. The piece’s last line:...
11 Free business models for Twitter
From Silicon Valley Insider, powerpoint presenations on each option: Twitter Market Research Twitter Coupons Twitter SMS, Branding, and SEO Twitter Split Into Three Twitter Contextual Ads Twitter Corporate Accounts, More Market Research Twitter As Craigslist Twitter Premium Developers Platform Twitter Suggested Ads To Re-Tweet Twitter SMS Advertising Twitter Premium Accounts,...
Free pays off for Monty Python
From Mashable: On the Monty Python YouTube channel they wrote: “We’re letting you see absolutely everything for free. So there! But we want something in return. None of your driveling, mindless comments. Instead, we want you to click on the links, buy our movies & TV shows and soften our pain and disgust at being ripped off all these years.” And you know what? Despite the entertainment...
"Pick your own price" in the real world
Researchers writing in the Journal of Marketing did an experiment where restaurants and movie theaters tried the “name your price” technique that worked so well for Radiohead. Result: people paid a bit less, but more people came, making it a net revenue positive. (Via the NYT)
A good example of Freemium done right
AreMySitesUp.com is a simple free service that tells you the status of your websites. Now it a has premium version, where $75/yr gets you some niceties like no ads, secured RSS feeds, direct messages via Twitter, and faster checks on your sites. Users can also add an additional 10 sites to watch on top of the 50 you get with the free level of service. Via CNET.
Why time-limited Freemium beats feature-limited
Charles Hudson says that it’s hard to get the free/paid balance right in a feature-limited Freemium model, so he prefers time-limited. It’s a good point, but I slightly disagree: time-limited discourages adoption because most people won’t commit to something that will go away if they don’t pay. I agree that feature limited is more work, but I think it usually pays off in...
How to create a freemium business model
Andrew Chen offers a comprehensive model on what free customers are worth in a freemium equation. Includes a spreadsheet!
A cautionary tale from Free newspapers
“Morten Lund, an entrepreneur from Copenhagen, Denmark, might just be the real Rock-’n Roll entrepreneur. Yesterday he was declared personally bankrupt by the Copenhagen Maritime and Commercial Court after losing 10M Krona in an investment into a Danish newspaper, Nyhedsavisen, which went badly wrong.” (From TechCrunch)
BBC Radio 4 program on Free
The UK’s national business program did a very good piece on Free. Includes interviews with me, Kevin Kelly and James Boyd. An accompanying article is here.
The Long Tail of advertisers
Google has an estimated 1.3 million - 1.5 million advertisers, who spend an average of $16,000 per year. That’s astounding. Nothing since the Yellow Pages compares.
More on the awesome power of scale
Fred Wilson predicts that massive scale will make display ads on the web as effective as search ads. Good news for advertisers but bad news for the high CPM business (gulp). [My post on scale here]
Of Google's 87 products, only 22 have revenue...
Great table on Blogoscoped: a rundown of 87 of Google’s products by their revenue models. Most have none: they exist simply to enhance attachment to Google and thus to its search or content ads. But 22 have at least one version that makes money directly, in addition to the free version.
A business model for Digg
Commodity banner ads aren’t working for Digg, so Silicon Alley Insider ran a contest for the best business model to monetize the free site. My favorite: “Digg should stop pretending professional users of its site do not exist and start charging them. Limit the amount of stories one IP address can submit from a single site — Gizmodo, Engadget, Alley Insider — to 30 or 40 a...