March 2009
15 posts
Pay for the concert, get all the recorded music...
From Fast Company: “In an effort to hustle up ticket sales in a down economy, the band No Doubt is offering an unheard-of incentive to concertgoers who attend their show: Fans who purchase a full-priced ticket ($42.50) will receive a digital download of their entire catalog—for free.”
Free (ad-supported) Microsoft Office 14
From Silicon Alley Insider, a new business model for Office 14 as described by Microsoft Business Division Chief Stephen Elop “There will be ad-based revenue streams. There’s an opportunity to draw those pirate customers into the revenue stream. We want to draw them into the Windows family and maybe there’s an upsell opportunity later.”
February 2009
8 posts
Pick Freemium, not ad-supported for iPhone apps
Silicon Alley Insider has a good analysis of iPhone app economics. Some facts: “A $1 app returns $0.70 per user after Apple’s cut. Free apps get about 6.6 times more uses than paid apps. And let’s assume people use them about 12 times, on average, before abandoning them. (Not unreasonable. See Greg’s other charts showing how quickly users abandon most iPhone apps. Yikes.)...
The Kindle as a platform for free books
Seth Godin describes nine ways that Amazon could use the Kindle as a way to boost the publishing market by distributing free books. My favorite: ” Demolish the textbook market as soon as possible by publishing open source textbooks for free.”
Information people will pay for
Jack Schafer looks at the sites that successfully charge people in a world where everything else is free. They tend to be rare, authoritative (WSJ.com) and beautifully designed (MLB.tv). And of course all of them are paired with free content, for a complete freemium business model.
Academic paper on how good filters extends the LT
Andres Hervas-Drane of Columbia university has published a theoretical framework that provides the math that explains how good filters can lower search costs and drive demand down the tail. “While the long tail debate has focused on the concentration of sales, we have shown that a long
tail e¤ect such as that driven by taste matching increases the sales volume of products that appeal to...
Bartering driving a new cashless economy in NYC
Marci collects the evidence: “Ever since my post a couple of months ago about bartering with my yoga instructor, I’ve been running into lots of people — both in the physical world and the virtual one — who’ve told me about their own experiences in the cashless economy. And just as I was getting ready to write a follow-up post about this, the New York Times published two articles about...
A software license that's libre but not gratis
A Slashdot question asks what license he should use if wants to charge for his software but allow customers to modify it. Commentors think it’s more a matter of a EULA than a licence, but IANAL.
Long Tail books need community
A TOC talk by Gavin Bell of Nature on why niche books aren’t like niche music. Most authors can’t make money from touring, so they have to work harder on creating a community that will buy their work. Nicely written up here.
The case for the free/paid hybrid newspaper model
I agree with Blodget that the WSJ has it right. A free/paid hybrid model that is Google and blogger friendly, with free links easy to create, but still converts loyalists to paid. Can NYT reverse course?
January 2009
13 posts
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.
