The web enables us to listen to music, watch tv shows and follow the latest news all without paying a cent. But while things are slowly but surely becoming free, I still believe people are willing to pay for certain value propositions.
Image courtesy of laffy4k
I believe the following 5 things are uniquely profitable in a world of free:
1. Convenience
People are inherently lazy. If you make their lives easier, they will pay you for it.
There are several ways to listen or download music for free, yet people are still paying for songs via iTunes or amazon.com. Why? Because of how easy it is to find and download music on those sites. People value their time more than the 99 cents per download. If you make things convenient and easy people will pay.
2. Quality
Price ensures a more serious and interested clientele. There are many online forums that are free (i.e. Sitepoint, DPreview), but there are also a handful you need to pay for to access (i.e. Webmasterworld, SomethingAwful, metafilter). I believe the reason people are willing to pay for those online communities is because the quality of the content is better. There is a higher signal to noise ratio. This same premise applies to dating sites. People will pay for membership to online dating sites, as opposed to finding dates through any number of free social networks.
3. Additional Functionality
Many websites give consumers just enough services to whet their pallets, and then charge for more functionality or more services, also called the "freemium model." Notable examples include the 37 Signals' product offering, Flickr's Pro Account, and Skype.
4. Customization
Wordpress.com is a great example of this. They provide anyone the ability to have their own personal blog for free however they charge for the ability to customize the CSS or a the blogs domain name for additional fees. Smugmug is another example.
5. Privacy
People still value keeping their private information private. To protect their identity people are willing to pay GoDaddy an extra fee when registering a domain name to ensure the address remains undisclosed.
What do you value enough that you are willing to open your wallet for?
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Note 1: I would like to delve into this further and have proposed a talk for next year's SXSW conference on this topic. If this discussion is of interest to you, I welcome any feedback and would appreciate your vote.
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Kevin Kelly, Wired Magazine's cofounder, has a really great list of attributes he asserts are "better than free." These qualities people will pay for in a digital age and include:
1. Immediacy
2. Personalization
3. Interpretation
4. Authenticity
5. Accessibility
6. Embodiment
7. Patronage
8. Findability
I asked my twitter followers and received some interesting suggestions:
* accessibility
* silence
* beauty
* freedom
* peace of mind
* respect
* attention
Any other ideas?
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Posted by Avi Muchnick on 2008-08-27 11:24:12
I will always pay for convenience. I will also pay for beauty - give me a beautiful interface that is fun to use, and I'm willing to pay more for it. Case in point are how I treat cellphones. I bought an iphone and a motorola Q, even though those phones weren't free with a cellphone plan (as others were). A lot of the reason for that were how the phones looked.
Posted by thaumata on 2008-08-27 14:33:10
Like Avi, I will pay for convenience, too. If you have an item or service that replaces 20 other items or services that I am already using, I'm sold before you open your mouth. If it's an elegant solution that happens to be pretty, I will shelllll out.
Posted by tamat on 2008-08-27 15:19:14
There is one that I find interesting and I'm not quite sure if it fits in any previous category. It is to pay to be part of an elite inside a bigger group. Not because any special feature, just to see yourself above the others. For instance in the online game Natural Selection those who payed had a special icon next to their names, those players tended to be more respected. In games like World of Warcraft people is paying for having the best items, but the true is that what they are paying for is to be "cooler" than the rest of the players. People like to feel the belong to the cool guys. Interesting article btw.
Posted by innocent_bystander on 2008-08-27 17:50:27
Nothing specific really, but Aviary really embodies everything people pay for IMO.
Posted by cinco de mayo on 2008-08-27 19:28:36
Is this a subtle hint that you guys are planning to charge? I would pay just curious.
Posted by Blaze on 2008-08-27 19:54:44
They have to be tricky with their pricing plan. They don't want to lose all of their simple hobbyists (aka: me), but at the same time they have to get some reward for all of this work. I'm thinking if their marketplace takes off that a commission on sold works would work well. I don't know what they should do until they actually get buyers though...
Posted by Kimbro Staken on 2008-08-28 02:23:58
I think there's way too much of a tendency to give things away. I like paying for services that are useful to me for the simple reason that they provide me value and I want them to continue to provide me value. When I start using a new internet service one of the questions I always ask myself is what is the business model? If it's not apparent to me how they're going to make money I'm much less likely to commit to it.
Posted by Jeff Moore on 2008-09-07 12:54:11
Many websites give consumers just enough services to whet their pallets, and then charge
I was gratified to see the correct spelling of "whet." It is so tacky when people say something "wets" their appetite or whistle. But the roof of the mouth, hence the place that is sharpened or whetted, is the palate. A pallet that is whetted gets sharp edges on the wood planks it is made from.
Yeah, I know this will get moderated out before it's posted, and that's okay. I just wanted to help your post look its best.
Best of luck with your application suite, and I hope to find its components available soon.
Jeff
Posted by Ben on 2008-09-12 23:28:27
Your example with iTunes and convenience got me thinking, because i don't think i buy songs from iTunes because i'm lazy. But it could be related.
It could be convenience, but i think it's something bigger than that. It fits. It's the right tool. When buying songs to listen to on my iPod, it makes the most sense to buy it on iTunes. The tool for purchasing is directly connected to the tool for listening.
The product has to fit. There has to be as little impedence as possible to get to the underlying need--in this case, to listen to my music.
Similarly, i use Opera as my web browser, mail client, and RSS reader primarily because email, blogs, and the internet are so closely connected that i want as little impedence as possible when using them. Opera is free now, but i would pay for it if i had to.
I can get most of that functionality (and oh so much more) with Firefox, but it takes more work. Work is resistance. Impedence. Flexibility comes at a cost. Just ask Linux.
Posted by Jeff on 2008-10-08 20:50:36
You know, there are plenty of things I would pay for on the Internet. 1) I would pay to avoid ads and pop-ups 2) I would pay to use a kick-ass web app (like Aviary) 3) I would pay for great customer service and not just some email address that goes to sleepy tech support team in India that were hired off the street. 4) I would pay for a great product if I knew that the creators would use some of the profits and user suggestions to make the product even better for us, the users. 5) I would gladly pay for an operating system that doesn't crash 6) I would pay to see spammers set on fire in the public square (hint, hint DOJ - we have to come up with that bailout cash somehow!) Just like Kimbro I won't put any of my eggs into some web app's basket if they have no plans on generating some income. And NO, adsense does not count!
Posted by ????? on 2008-12-04 04:46:37
To be honest ! I am not the kind of person who is ready to pay for these except Wordpress Awsome .
Posted by ????? on 2008-12-04 04:46:44
To be honest ! I am not the kind of person who is ready to pay for these except Wordpress Awsome .
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Posted by David on 2008-08-27 02:11:31
I think there's a good size group out there willing to pay for "ad free".