The Business Web 2.0
As CEO of business-based social networking site WeCanDo.BIZ, read my take on the role Web 2.0 technologies can play helping businesses to grow.
Tuesday 7 July 2009, 10:38 AM
Could "Fremium" social media evolve into a pay once unlimited access model?
The "freemium" model, where users get access to most of a web services features for free, but where the best bits have to be paid for, is getting a lot of coverage currently as the way in which the web can make money where advertising isn't working -- read most social networks. It's worked well for porn sites in the past; business social network XING makes its money that way; Plaxo is moving to the same model by charging users for its useful Outlook contacts sync feature from the end of this month. It's been mooted -- and denied -- as a model for Twitter too.
So it comes as no surprise that Google has always made the all singing, all dancing version of Google Apps, the internet giant's equivalent of Microsoft Office, available under the freemium model. But should we be surprised that they're now doing their bit to conceal the fact that the free version still exists (here: http://ow.ly/gETX)?
Well perhaps not. But the whole thing got me thinking about what's likely to come after freemium...
Anyone who has been using the internet for any length of time will remember that we started off paying for each minute we were connected to the internet over dial up access. Then people like AOL changed that to a fixed fee every month for unlimited access. Then Freeserve came along and offered it free. Then broadband appeared and we went back to a fixed fee but up to a point, over which if you used it more you got charged. This will exists, but many other providers over a fixed fee for an unlimited service.
Home phone bills have followed the same sort of pattern; and mobile phones the same. It's not a million miles off the model used for cable/satellite TV subscriptions. It's something we all accept and are used to. I am questioning whether, as more and more sites look to charge their users a fee for premium access to features, the potential exists to pay a single fee for premium web usage which would give unlimited access to all subscription/fee-based websites?
How would it work? Well, one could log in through a single site which handles the billing and then provides direct access to the services we've paid for. If we stray outside of the sites we've paid for unlimited access to to other chargeable sites then we could be prompted to add that to our sub service for a small additional premium (or if we upgrade to the next level and open up access to a collective of other sites too). As such models exist away from the web, it's not beyond the wit of man to deploy a system for ensuring each of the destination sites offering the premium services get their share of the single subscription fee.
Hey, I could even imagine site owners doing deals on the margin that "portal" site would make if it directed users towards their services.
All we need is a company that is already used as an web point of entry; can handle taking payments; knows about redirected traffic to other sites; and has a method for enabling a single identity to be use across the rest of the web. Something like the Google supported OpenID or Facebook Connect for example...
Google could do this in an instant of course, but it's Facebook that is keener to turn revenue from its membership and the fact that so many of its 200 million users have it as their homepage.
Have I unearthed a revenue model for them that's win/win?
Your comments welcome, as ever.
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
PreviousComments on this post
Very interesting. It seems to me that there is a fundamental conflict between users who want/need/expect everything on the internet to be "free", and producers/content providers, who simply have to find some way to pay the bills. The equipment and connections to run a web site or service are certainly not free, nor are the people to develop, maintain or provide content for it.
I think what is happening in the newspaper business today provides a good example of the problem. There seems to be considerable resistance to specifically paying for online news content, perhaps having it as part of a "Freemium" package would be a way around that?
jw
JW
Many thanks for your comment.
Yes, newspapers are a great example of a need to find a valid source of revenue from the web. They've found their print version sales (and revenue from advertising) battered by the availability of news online. So they now all have websites, except they're mot making enough from advertising there either. As well as ads may have worked in the past, in a downturn they get trimmed. And online properties are annoyed that their business models are getting so affected by advertisers business models when the internet continues to grow.
Few newspapers have had the balls to level a subscription for fear of their online views dropping off, costing them the little they get from ads. I guess where my thoughts are heading is, why doesn't Google, Facebook or even Sky or the ISPs bill customers a monthly amount for access to a bundle of premium access websites? For example, £10 for exclusive access to the best subscription only news websites, or £20 for customer networking websites? Visitors could continue to get access to free resources in across the web, but the best stuff only comes if you have "Web Plus".
With several/many websites doing this, no one website would need to feel they were risking everything but bucking the trend for free.
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
"why doesn't Google, Facebook or even Sky or the ISPs bill customers a monthly amount for access to a bundle of premium access websites? For example, £10 for exclusive access to the best subscription only news websites, or £20 for customer networking websites? Visitors could continue to get access to free resources in across the web, but the best stuff only comes if you have "Web Plus".
With several/many websites doing this, no one website would need to feel they were risking everything but bucking the trend for free."
Virgin media UK have more or less ventured into this territory already by rounding there basic home service packages into one monthly lump sum fee, unfortunately this translates into customers having to pay a 2nd time for supposedly free TV channels if you take into account the TV license fee.
By this I mean if you take closer look at the basic package they have on offer ie; TV, Phone, Internet, you will find that the basic TV channels in this package are actually free view channels and nothing more.
If you then combined this with what some ISP's are thinking about doing in terms of passing the cost's of streaming services like TV stations net players back onto the broadcasters, who will then in turn pass that cost back down to the customer via (TV License), If these stupid types of idea's go ahead customers will soon find them self's being charge from both ends of the same line/services.
Then take the same idea's and apply them across general net or website access most imperticular access to sites that the ISP's do not own is a recipe for disaster.
Pure unadulterated gluttony' hurriedness idea, and I'd imagine it would start quite a few law suits as well, I thought the whole point of the word (Internet Service Provider) was just that, not (Internet Service Dictator).
With the planned upcoming deployments of such services like 4g wireless broadband net access etc, I think you find an explosion in smaller companies coming along to take a peace of the action this just might be the wake up slap that the current big ISD's need.
CA
Thanks for your contribution CA.
This isn't really so much about the traditional ISPs -- whose role, I agree, is less certain in an age of mobile internet including 4G and WiMax -- but about making the fact that website owners want/need to start charging for content.
The thought is sticking in everyone's craw, not least of all because if there are a number of websites you value and could find a way to justify paying for, the bill could soon rack up (like it would if each individual TV channel took money from you for access to JUST that channel).
My idea is someone we already have a trust relationship taking a subscription fee so that you get a bundled price for access to all the premium websites you want at better value than subscribing to each.
It's not tough to do, we just need to find an enterprising web company to do it. ISPs already invoice you so it's not hard to add this element to an invoice, but my original thoughts were that Google or Facebook might pick up the challenge.
It needn't be dependent on ISPs, as it's really about controlling website logins, rather than core internet access.
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
Yus granted the running cost's of such sites like face book will be huge given how popular they have become over time, but having said that they new the risks involved if there online advertising revenues failed.
for such sites to start charging for login pass's as it where for there user's is at best a touchy subject for two main reasons, one being what service are they actually providing? social networking? and what else.
The second concern is the sale of peoples identities who's who of copyright ownership, if I upload my image onto your website then how does that grant you copyright's over me?
See it is a difficult one to fathom all in all its not like say a loan programmer selling he's own applications from he's own website, where in turn he offsets he's running cost's against he's revenue.
Suppose its best looked at like a dating website, it could work if the fees are kept realistic, however if they get to greedy then people would just leave for rivals sites, I suppose the make or break decision would come back down to quality of service they provide and how aggressive there pricing is.
Edit;
Maybe setting up a business that depended on advertising revenues in the first place was not such a great idea after all, I would even dare say that if such idea's where put forward in todays environment they would be back heeled.
Hindsights a great word maybe the only way forward is to appreciate it and learn from it.
CA
Setting up a business that depends on advertising isn't such a dumb move -- it's how newspapers, TV and commercial radio survives.
But I think there are aspects of currently free social media sites that people would pay for, if offered over and above what is currently available for free.
Twitter users in business would pay to be able to more easily market to their followers, either through communication tools or having access to market data about their followers. Ditto Facebook I would imagine, although I think it highly likely that consumers would pay for some services on Facebook too; they are already happy to pay mobile phone companies to text friends, so why not pay a small amount for funy communication features online? One of Facebook key income streams is currently virtual goods, or friends paying $1 to send another friend an online "gift".
Small businesses can find themselves paying a fair amount each month to have access to online services enabling them to run a blog, maintain their website, get e-mails, do mass marketing, manage customer relationships, produce invoices... each of these billed individually. Why not pay one company for a pass for unlimited access to all the online resources you need?
Ian Hendry
CEO, WeCanDo.BIZ
http://www.wecando.biz
Yes tv & radio services have a proven history with advertising which works we'll, but there running cost's do not spike quite as significantly as web servers when the volume of user's increase.
Again yes charging business's for all in one packages along with charging user's for small quirky services is viable, but i can not see that coming close to covering the running costs.
As for charging company's for access to millions of users feeding patterns yes this would bring in the most revenue, but again it does come back down to copy right of ownership, will any of the user's receive there cut for having there details sold?
CA
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