Online Business Models

Audioboo - in which Channel 4, UBC Media and Imagination Technologies have invested - launched a Pro service aimed at media clients like radio stations a while ago, but it gained little take-up.

The new effort is a more substantial revenue plan. Now it is throttling its core free service a bit to find a choke point at which users might pay, as well s trying to mobilise some content worth paying for.

Audioboo is facing growing competition from SoundCloud, but Rock differentiates the two. “We’re all about real-time spoken word, they’re about music,” Rock says. “They don’t do real-time particularly well. Our content is about trying to find clips pretty quickly.”

Dave Goldberg, a pioneering Internet music entrepreneur, used to have a glamorous job as vice president of music at Yahoo (YHOO), which bought his startup Launch Media for $12 million.

Now, as CEO of Palo Alto-based SurveyMonkey, he peddles online survey tools to corporations, schools, and community groups. "A lot of people ask me, 'Really? Surveys?'" says Goldberg.

Really. It turns out that those prosaic online polls are a tidy business, thanks in part to a management and technology upgrade instituted by Goldberg -- who is married to Sheryl Sandberg, the ultraconnected and savvy operating chief of Facebook.

Since becoming SurveyMonkey's CEO two years ago, he's tripled the company's registered users to 8.5 million, more than four times that of its nearest competitor, Zoomerang.

Technology is helping cut transaction costs in many domains.

Want to rent a movie? Forget the old days of driving 10 minutes to Blockbuster and spending 30 minutes arguing with your significant other about popcorn flick versus art house. Netflix will have a few hours entertainment downloaded in a matter of minutes and even help the indecisive with suggestions.

But is what’s true for procuring movies soon to be true for procuring services as well?

Start-up Zaarly hopes so.

The app aims to bring local buyers and sellers of both goods and services together easily, taking the hassle out of errands and odd jobs.

Where once you might have cruised Craigslist or called around to friends to find a man with a van or an Ikea assembly genius, now you pop your request and what you’re willing to pay onto Zaarly and local folks bid for the job and fulfill your request without stress.

Close your eyes, and cast your mind back to the first dotcom boom in the late 90s/early 00s. What’s your overriding memory of that whole crazy period?

Or if you’re too young to really remember, what do you immediately think of when you hear dotcom bubble or dotcom boom mentioned in relation to Silicon Valley at the turn of the millennium?

I’m going to take a stab and guess that it has something to do with over-inflated valuations of ill-conceived, kooky ideas. 

Here at FMC, we tend to think a lot about changing business models for musicians. Certainly, many artists are still making the majority of their money from selling CDs, merch or playing gigs.

Yet we’ve come to realize that musicians’ access to potential revenue — especially in today’s digital landscape — expands far beyond that.

Recently, FMC started ponder all this in a more organized fashion: just how many different ways are there for musicians to earn money? We’ve come up with 29 so far, which we list below.

In the digital marketplace, the most effective price is no price at all, argues Anderson (The Long Tail).

He illustrates how savvy businesses are raking it in with indirect routes from product to revenue with such models as cross-subsidies (giving away a DVR to sell cable service) and freemiums (offering Flickr for free while selling the superior FlickrPro to serious users).

New media models have allowed successes like Obama's campaign billboards on Xbox Live, Webkinz dolls and Radiohead's name-your-own-price experiment with its latest album.

A generational and global shift is at play—those below 30 won't pay for information, knowing it will be available somewhere for free, and in China, piracy accounts for about 95% of music consumption—to the delight of artists and labels, who profit off free publicity through concerts and merchandising.

Anderson provides a thorough overview of the history of pricing and commerce, the mental transaction costs that differentiate zero and any other price into two entirely different markets, the psychology of digital piracy and the open-source war between Microsoft and Linux.

Looking at book publishing statistics and noting huge e-book growth is fun—but not in the case of the new statistics released by the Association of American Publishers, which show print book revenues substantially down and the 161 percent growth in e-book revenues in the first six months of the year unable to make up for that loss.

The AAP’s monthly reports represent sales figures from 79 publishers reporting data in four markets (trade, K-12, higher education and professional/scholarly publishing). 15 of those publishers also provided data on e-books.

These stats are less comprehensive than those provided by BookStats, the AAP’s joint venture with the Book Industry Study Group, which launched last month and includes data from nearly 2,000 publishers. Early BookStats reports showed that book sales grew between 2008 and 2010.

The AAP’s new stats refer to trade books:

What does content mean for online retailers, and how can publishers successfully work commerce into their websites? Those were the questions discussed at a Financial Times panel in NYC last night.

“There are lots of things that merge between media businesses and 2.0 commerce,” said Susan Lyne, chairman of Gilt Groupe. “We’re all competition for each other in that we’ve got limited time to spend on something besides work and family.”

Rob Grimshaw, managing director of FT.com, alluded to the challenges that lie ahead for publishers: “Just because we’ve opened a shop doesn’t mean we’ve become retailers.”

Some takeaways:

As more newspapers roll out paywalls, they are looking for new types of content and services to entice readers, and are also turning to new types of technology to power the payment platforms themselves.

New London, Conn.‘s The Day is promoting its new paywall as a “membership program,” with benefits beyond online content.

And the Southeast Missourian and Richmond Times-Dispatch appear to be the first two newspapers to use Google (NSDQ: GOOG) One Pass technology, which the company rolled out in February.