late fee?

1. 1

   .jeff. on January 3, 2002 at 7:57 am

   I think viable business models will evolve.

   The reason that all these things were free was because they had irrational business models.

   One thing I can see is a company having a for-the-consumer site that is free (to penetrate the market and get good PR) and have a for-the-business site that is subscription-based. Google works this way, for example — most of their revenue comes from licensing their search engine to other sites, I believe. AskJeeves does this as well.

   I could see Blogger surviving by selling a server app that you could buy (or subscribe to) that would be hosted on your own server (which would be especially helpful when their service goes down), or, alternatively, you could use the one on their site for free and get fewer features. The free service is basically a marketing expense to get people in, hoping they’ll pay for a more robust version. (Of course, the more robust version has to have significant additional features to warrant the extra expense.) Treating your free app as a loss leader works and I think sites that realize that (and can produce a version with enough features that people will pay extra for) will succeed.

   Micropayments? Hasn’t caught on thus far, so I’m not sure why all of the sudden it would work.

   Subscription models? The problem is that most of the sites trying this don’t have unique enough content. Sure, I could pay for it, but if I look around for long enough I could probably find comparable free content. For highly specialized publications (i.e. trade mags), this could work, but for most, I seriously doubt it.

   Begging? I can’t see it working more than once. Blogger’s was a desparate need; I’m sure if they tried to do that again they wouldn’t get nearly as much money.

   Donations, on the other hand… I could see more personal sites doing this if there’s something in return. With Blogger, it was that you’d get a bumper sticker. Not a great incentive, but one nonetheless. What about a musician offering 5 free MP3s on his website, but, if you donate $15, you’ll get them on a CD, plus 2 bonus tracks not available online, plus a bumper sticker or something like that. Or a writer offering a PDF of a short story, but for a $10 donation, she’ll mail you a printed-out bound version, along with another short story not available online.

   Shareware — well, I rarely use it (and when I do I don’t pay) but there are a lot of people that do. The great thing about software is that it scales beautifully. Your cost to produce the initial unit is huge (development time, etc.) but after that your marginal cost is essentially zero (of course there’s bandwidth, hosting…). It works best for small, quick-to-develop programs that are genuinely useful. (And games, too.)

   In the end, it has to be something that people will pay for, and it has to be something that is not available for free elsewhere. I used to use those free greeting card sites a lot, and now that the big ones are charging (Blue Mountain, eGreetings), I’m just finding other free sites. eCards are useful, but there are so many other free ones out there.

2. 2

   christina on January 3, 2002 at 9:53 am

   What i don’t understand, .jeff, is why the muscian and author offering gifts for a donation different from selling the product of the CD or book. What should these folks simple sell their product in a straightforward manner…. and the same for software.

   When money flowed like honey from the VC mountain, people like the trotts or noah grey could give away the fruits of their labor and still pay rent. Now it’s another story… imagine: they work for hours on a product, give it away for free, spend time answering problems on the buliton board, don’t make a penny, and on that same buliton board people just complain and ask for more (I ask for more, but I also donated, and have no regrets). I remember working at egreetings, where their was a huge staff of customer service people answering questions and complaints all day– for a free product. As far as I’m concerned, the only mail they should have gotten is a thank you. I wonder sometimes if, when you offer something for free, you take away its value.

3. 3

   jefflash (aka .jeff.) on January 3, 2002 at 6:00 pm

   “Straightforward selling” doesn’t take advantage of the medium enough. People like free stuff, especially stuff that they’d normally have to pay for. Especially free music (Napster has shown us that).

   By giving away some content for free you draw people in.

   Take a musician, for example. The musician sets up a website to buy CDs. Why would I buy this person’s CD? How do I know it’s any good? I wouldn’t, unless I had already heard him somewhere or someone personally reccommended him to me (and even then I’d probably want to hear it first). In most cases, that’s not going to happen.

   So, he gives away a few free tunes; the people who like it may pay for more (hell, I’ve bought a bunch of CDs this way). Even if he doesn’t sell a CD, he gets someone to listen to his music, and maybe they’ll check him out when he comes to their town, or maybe they’ll link to his website from theirs…

   There’s also a mental part of it; when you call it a donation people feel guilty taking it and not paying for it. A $10 donation that gets you a CD and bonus tracks and a bumper sticker and newsletter sounds better than just plain ol’ selling your CD for $10.

   I think blindly putting things out on the web and assuming people will pay for them, without ever having tried/sampled/heard/read/tasted/tested it, is a bit arrogant. At the same time, assuming people will pay extra for something that doesn’t provide much more of a benefit than the free version is a bit arrogant.

   Sites that understand this well:
   fuckedcompany.com
   google.com
   morningstar.com
   hotmail.com

   Sites that don’t understand this well:
   bluemountain.com
   adventive.com
   napster.com (new version)
   spellchecker.net

4. 4

   phemi on December 2, 2002 at 7:53 am

   i heard i was getting this websitevfor free and it’s really thoughtful of an organization to think of this.

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