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Robin Good
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The half-forgotten subscription model deserves our praise and renewed attention. In the Digital Age, it has become more popular than ever.
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Do Paywalls Change the Engagement Equation? - The Huffington Post Jake Batsell seems to think so, saying that while advertising-driven models of digital journalism aim to maximize page views, when news organizations introduce online subscriptions "it reconfigures the benchmarks for success."
Which leads to the question: What are online readers willing to pay for digital content?
It's one of those complex issues troubling publishers, editors and reporters who have to worry about producing enticing content to compete with the plethora of digital fare, and, ensure the success of their revenue streams.
Via Lelio Simi
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Robin Good: Interesting short article at GigaOM by Rag Srinivasan, highlighting the not too well known story of how "freemium" came about thanks to a number of tests that were run by MIT behavioral economists.
The article questions the freemium model strategy which hopes to extract a sufficient number of paying customers from a much larger free user base.
"Freemium can only offer the hope that customers will fall in love with your product and be willing to pay for it later. This is a scattershot approach to monetization."
And I agree. But freemium can be still an effective business model as long as you do take into serious considerations the key questions posed in this article before centering your future marketing strategy on it.
Good questions being asked. 8/10
Full article: http://gigaom.com/2012/07/21/freemium-has-run-its-course/
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Robin Good: If you are looking for a good introductory guide to the use of crowds for the generation of revenue and the extended monetization of existing line of products/services, I definitely recommend giving a good look to this guide prepared by Ross Dawson and Steve Bynghall.
In the guide you can find out why crowdsourced business models are so promising and why they are being adopted rapidly by the major brands around the world.
Recommended reading. 8/10
Read or download the full guide here: http://www.scribd.com/doc/75173330/Getting-Results-From-Crowds-Chapter-22-Crowd-Business-Models
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Robin Good: Matthew Ingram has just published a great article on GigaOM about the news media industry and the increasing realization that the content it produces is more often than not found, discovered, shared and read somewhere else from that content originated.
He writes: "...one other thing that becomes clear from the Pew report is just how big a role aggregators of all kinds — both human and machine-powered — are playing in news consumption.
Despite the growing evidence to the contrary, many newspaper companies and other traditional media outlets still seem to think the vast majority of their audience comes to them directly and prefers to read their content above all other sources.
More than anything else, this is the core philosophy behind the rise of paywalls — which more and more papers are implementing — and also the millions of dollars that media companies have poured into developing iPad apps and other walled-garden-style approaches to news delivery. The assumption is that readers will want only the content that comes from that specific outlet."
But this is not anymore the case.
"What does all of this mean for media companies?
More than anything, it means that trying to recreate the scarcity of content that used to exist in print — when media outlets controlled not only the creation of news but the platforms through which it was distributed — by using paywalls and subscription apps is fundamentally a losing battle.
...One response to that is to shrink your audience down to those who will pay, as some outlets like the Financial Times have done and several of Rupert Murdoch’s British papers are trying to do.
The other approach is to be as open and distributed as possible, to try to take advantage of the democracy of distribution instead of fighting it, and then to find other ways to monetize that audience and their attention, whether it’s e-books or live events or the “reverse paywall” model Jeff Jarvis and others have proposed.
Either way, aggregation and curation are the new reality of media, whether media companies like it or not."
Must read. 9/10
Full article: http://gigaom.com/2012/03/19/if-you-have-news-it-will-be-aggregated-andor-curated/
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"In the old, narrow view of capitalism, business contributes to society by making a profit, which supports employment, wages, purchases, investments, and taxes.
Conducting business as usual is sufficient social benefit. A firm is largely a self-contained entity, and social or community issues fall outside its proper scope.
...
[But] in recent years business increasingly has been viewed as a major cause of social, environmental, and economic problems.
Companies are widely perceived to be prospering at the expense of the broader community.
Even worse, the more business has begun to embrace corporate responsibility, the more it has been blamed for society’s failures. The legitimacy of business has fallen to levels not seen in recent history.
This diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle.
A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades.
They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success.
...
The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges.
Businesses must reconnect company success with social progress.
Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.
It is not on the margin of what companies do but at the center."
Must read. 10/10.
Read the full article: http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1 (requires free registration)
(Curated by Robin Good)
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Excerpted from the article: "Noah Kagan built two multi-million dollar online businesses before turning 28.
Mr. Noah has quite the start-up resume. He was employee #30 at Facebook, #4 at Mint, had previously worked for Intel (where he frequently took naps under his desk), and had turned down a six-figure offer from Yahoo.
...Noah’s helped create Gambit, an online gaming payment platform and a multi-million dollar business; and AppSumo, loved by entrepreneurs and moms everywhere...
The purpose of this post is simple: to teach you how to get a $1,000,000 business idea off the ground in one weekend, full of specific tools and tricks that Noah has used himself.
He will be your guide…"
....
"I’m going to suggest is that you start with a much simpler essence of your product over the course of a weekend, rather than wasting time building something for weeks… only to discover no one wants it."
Here the key steps:
Step 1: Find your (profitable) idea
Step 2: Find $1,000,000 worth of customers
Step 3: Assess your customer’s value
Step 4: Validate your idea
Read the full article (full examples and references) here: http://www.fourhourworkweek.com/blog/2011/09/24/how-to-create-a-million-dollar-business-this-weekend-examples-appsumo-mint-chihuahuas/
(Curated by Robin Good)
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"You are more than three times as likely to crash your startup as you are to ring the NASDAQ opening bell."
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Startups and bad predictions
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Robin Good: Here is a good article illustrating the several different alternatives available to any web designer to extend his revenue channels.
The creation and sale of design templates, icons collections, ebooks, advertising as well as the development of dedicated tools, software and plugins can be just some of the many extra revenue-making options available.
From the original article: "To summarize, the main lesson I’ve learned over the last couple of years is to have a long-term view and invest in yourself, not chase a quick buck.
The plan is rather simple, then: build a network, cultivate a strong identity to ensure the network knows who you are, and then come up with a product you can market to it."
Informative. Resorceful. 8/10
Full article: http://www.smashingmagazine.com/2012/08/27/designer-passive-income-experiments/
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Robin Good: As the author of The Startup Owner's Manual, Steve Blank is someone who has been experimenting, studying and analyzing startups for many years and who has a comprehensive vision of what it takes to be a successful startup and wher emost new digital companies fail.
In his own words a "startup" is "a temporary organization designed to search for a repetable and scalable business model".
In this excellent video interview by GigaOM Chris Albert, the focus is on the state of startups and entrepreneurship.
From the original article: "When Steve Blank talks about entrepreneurship, people listen.
...Blank co-founded the CRM software company E.piphany and the video game business Rocket Science.
His current gigs as an entrepreneurship professor at Stanford, UC Berkeley and Columbia give him a unique insight that combines a historical perspective with a look at the next generation of entrepreneurs.
Key takeaways:
1) Startups are not smaller versions of big companies, so don’t try to be like them
2) Startups are about searching for a business model, not executing a business plan
3) Contrary to the myth, Steve Jobs interacted with consumers more than you think
4) Amazon has been hugely important to the boom in startups
5) Today’s students have a “wonderful entrepreneurial arrogance”
Insightful. 9/10
Watch the video interview in full here: http://gigaom.com/2012/05/11/steve-blank-on-small-startups-big-execution-and-steve-jobs/
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Robin Good: If you have been wondering how can it ever be that by giving things out for free people will buy more of your products/services, you must check out this great report on consumer adoption of freemium products and services.
“If it can’t ‘sell’ for free, can it ever sell at all?”
From MarketingPilgrim review of the report by Cynthia Boris: "The free sample has been used to tempt grocery shoppers since the invention of the toothpick, yet many of today’s marketers are reluctant to give anything away.
Apps, ebooks, access — you gotta give a little and if you do, you’ll get a lot.
iYogi just released a new study and infographic all about the power of the Freemium model.
Their results show that 100% of the people they surveyed have tried a Freemium product and 42% have gone on to pay for it."
(Source: MarketingPilgrim)
Must-read. 9/10
Full Report: http://insights.iyogi.com/research/consumer-adoption-of-freemium-products-and-services.html
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Fred Wilson writes:
"Making movies is expensive and risky. I totally get that the studios need to make a lot of money on those movies to make their business model work.
But denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model.
It leads to piracy, as we have discussed here many times, but more importantly it also leads to the loss of a transaction to a competing form of entertainment.
...I am sure there was a time when scarcity was a good business model for the film industry.
...I understand their muscle memory in terms of the scarcity business model.
But restricting access to content is a bad business model in the age of a global network that costs practically nothing to distribute on.
I've argued this point many times with film executives. They insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market.
That just doesn't make sense to me.
If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can't see how they wouldn't make more money."
Rightful. 8/10
Read the full article: http://www.avc.com/a_vc/2012/01/scarcity-is-a-shitty-business-model.html
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Jeff Jarvis at Buzz Machine considers the upside-down logic of paywalls at online newspapers, where low-value readers get their content for free while loyal, engaged readers are required to pay.
Instead Jarvis proposes that newspapers build the opposite — a system of credits that rewards readers for actions that show loyalty (and benefit) the publication, such as:
a) sharing stories across social media,
b) looking at ads,
c) reading more articles (which generates more ad inventory), and
d) sharing data about yourself that enables the paper to charge higher advertising rates.
Jeff Jarvis wites: "Imagine that you pay to get access to The Times. Everyone does.
You pay for one article.
Or you pay $20 as a deposit so you’re not bothered every time you come.
But whenever you add value to The Times, you earn a credit that delays the next bill.
* You see ads, you get credit.
* You click: more credit.
* You come back often and read many pages: credit.
* You promote The Times on Twitter, Facebook, Google+, or your blog: credit. The more folks share what you’ve shared, the more credit you get.
* You buy merchandise via Times e-commerce: credit.
* You buy tickets to a Times event: credit.
* You hand over data that makes you more valuable to The Times and its advertisers (e.g., revealing where you’re going on your next trip): credit.
* You add pithy comment to articles that other readers appreciate: credit.
* You take on tasks in crowdsourced journalistic endeavors: credit.
* You answer a reporter’s question on Twitter and the reporter uses your information: credit.
* You correct an error in a story: credit.
* You give a news tip or an idea for an article The Times publishes: credit.
Maybe you never pay for The Times again because The Times has gained more value out of its relationship with you.
If, on the other hand, you hardly do any of those things, then you have to pay for using The Times."
...
"You see, that values the local reader over the remote reader.
My idea for the reverse meter values the engaged reader over the occasional reader — and even rewards greater engagement.
And therein lies, I think, the key strategic skill for news businesses online: understanding that all readers are not equal; knowing who your more valuable readers are; getting more of them; and making them more valuable."
...
"The key strategic opportunity for news sites is relationships — deeper, more valuable relationships with more (but not too many) people."
Must-read. 9/10
Read the full article: http://www.buzzmachine.com/2011/12/19/why-not-a-reverse-meter/
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Robin Good
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From the article: "We create economic value out of information when we figure out an effective strategy that includes aggregating, filtering and connecting."
"Filtering is what helps us deal with the vast amount of information available to us."
"...the real question is, how do we design filters that let us find our way through this particular abundance of information?
And, you know, my answer to that question has been: the only group that can catalog everything is everybody." (Clay Shirky)
We try to filter information so that we end up with something that is relevant to us – it helps us learn something, it helps us solve a problem, it helps us develop a new hypothesis about the world around us.
These are all connections – and this is what really drives value creation.
However, we can’t connect without some filtering going on. So filtering is important, and it’s a term that includes several different sub-types. I can think of at least five forms of filtering.
...we can use these ideas about filtering to help with business model innovation by changing where it takes place in the value network.
One of Shirky’s points is that since Gutenberg, the economic logic of publishing required publishers (of books, music, movies) to act as filters in order to maximise their investment.
As publishing and filtering has shifted out to human networks, publishers no longer need to fill this role.
Someone (or some network) needs to, and since that creates value, it’s something that can perhaps be monetised.
You can see this in investing. You can put money in Berkshire-Hathaway, where investment choices are run through the personal expert filter of Warren Buffett. Or you can invest in individual stocks recommended by a broker- which is filtering through an expert network. Or you can take advantage of DIY investing, where you do your own filtering, probably aided by some heuristic filters as well. Three different investing business models based on three different filtering methods."
Check this video: http://vimeo.com/8748509
Read the full article by Tim Kastelle: http://timkastelle.org/blog/2010/04/five-forms-of-filtering
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![From Failure To Failure: Small Startups Need To Be Searching For Repeatable and Scalable Business Models [Video] | Online Business Models | Scoop.it](https://img.scoop.it/B7Hx73bz742o6W0pYmrNjjl72eJkfbmt4t8yenImKBVvK0kTmF0xjctABnaLJIm9)
An excellent in-depth article by Kent Anderson analysing the key advantages and benefits of the subscription business model for news and content publishers of all kinds.
Key advantages of subscription model according to author:
The article cites and points to many relevant examples and companies which utilize a subscription model and are successful at it.
"The subscription model is allowing music publishers to compete with iTunes. It is allowing Amazon and Target to compete with grocery stores. It is allowing the Washington Post to reimagine itself. It is allowing editors to make a living selecting the best from the rest. It is your cell phone, your wearable, your streaming service.
The subscription model isn’t a relic.
It just may be the hottest and best business model around."
Informative. Insightful. 8/10
Full article: http://scholarlykitchen.sspnet.org/2014/06/30/hiding-in-plain-sight-is-the-subscription-model-the-optimal-business-model-for-the-digital-age/
Reading time: 13'