Posts Tagged: freemium

web2.0 — 7 Comments
7
Jun 10

Top 6 Issues Holding Back Mainstream Adoption for Virtual Online

We spend a lot of time working in or evangelizing the virtual online and the future of the 3D Web. We have already made the jump beyond the snags that catch most people. What is really holding the average person back from enjoying virtual online experiences? It is not just one hot issue that is holding back the revolution for the 3D Web. There are a set of interconnected problems blocking people from enjoying this brave new frontier online, that pretty much all need to be solved at once.  Although I would say that in my list below that the first two are most urgent and solving them gives some uplift to users and might encourage them to have hope. Of course, these are not the same issues for the early ad0pters–who already got passed the hurdles and can answer the “so what” question.  Simple fact is that mainstream online users can deal with 2D stuff, watch videos, chat, skype etc, but virtual, immersive is still very new to them–even in concept.

I was hoping to keep the list to 5, but I think following seem to be the 6 main roadblocks on why mainstream online users are not diving straight from Farmville, GTA, WoW into OpenSim-powered Virtual Online Experiences:

1. HOT ISSUE: Hard to Access

I was with some Noobies the other day and it was painful to watch them try to get oriented on using their avatar.  They were not gamers and the whole 3D spatial thing was a big shock. I was about to puke on the floor as they spun their camera all over.  However, after about 45 minutes helping them get around and customize their avatars, they seemed to get the main ideas. Some people think this is part of the “1 hour” experience challenge, but actually it is the first 10 minutes where they get so frustrated they close it all down and swear about how impossible it is.  I guess even with 3D movies, people complain about getting headaches and you don’t need to navigate anywhere.  The reworked SL viewer, while usable-ish, really is not an ideal solution. We are hoping our plans for using Unity3D will help here.

Even beyond all the tech issues, the people I was with had a lot of trouble with figuring out where to go and what to do. They wanted web pages to explain it all (which we even have and with video tutorials), even when there signs and info inside the virtual areas. They really just have too much coming at them all at once.

And people are wary about downloading new stuff–even if they have skype, java, virus protection, air apps  and other stuff on their machines. People don’t even like to get new browser plug-ins, which is way Unity3D is trying to get pre-loaded as part of Chrome.

Nonetheless, I think people would deal with this HOT ISSUE if point 2 below were  clear to them–>

2. HOT ISSUE: Compelling Content

In general, the gripe from the uninitiated is that there is not enough to do and/or that the content created is low quality.  The content in total though, is probably not any worse than the rest of the web. Really what people seem to be saying is that they can get content other ways and dealing with the 3D, immersive is not worth the hassle (see point 1).  I call this factor the “so what?” which challenges the early adopters to answering the reason for why something is interesting to these followers.

We have a lot of new, amazing content on the Heritage Key grid–more than 6-8 hours worth of high quality fun learning stuff.  We are also running live events regularly. But people don’t know what they are missing and then when they give a try they hit point 1…

3. Improve Performance

Once you can get Noobies over the line to being at least basic users, then they will start to hit some of the performance issues.  Even though some causes for crashes are due to firewall or are bandwidth related and require other types of admin support.

While OpenSim has made a lot of progress in the last year in terms of how well it works, there is still a long way to go. I am sure a better matched viewer would also make the complete experience better. We can design around a lot of the weaknesses, but frankly a better physics engine would also be…a lot better. Improving the concurrency at reasonable content load will also help a bit.

The avatars are also still quite limited and stiff.  In the first instance this isn’t a major turn-off, but certainly more fluid, smarter and more realistic avatars will increase interest.

4. More Interesting Places to Visit

People will need to have a stronger sense of the broader, more varied set of experiences out there for them. The only way this can really scale out to the web is by having more and more content across more and more grids made by more and more people.  It will need to be more than just empty regions to get people engaged.

5. Increased Features

OpenSim is short on a few key features right now — micro-payments and voice in particular. Sure there are ways around this, but it isn’t that easy or works in a very robust way.  There needs to be a larger developer community thriving as part of the ecosystem.

6. Movement Between Grids

Once each Grid is more capable, then people would probably find it exciting to move between them. Moving between grids is a lot more complicated and potential more rewarding than zapping between web pages.  The “closed world” destination is just too constrained.  We are not sure that hypergrid is the right kind of solution as it doesn’t give the grid owners the right set of management or security tools.

Massive Numbers of Users

My guess is that there will be 600 million people around the world that  by 2012 could potentially access 3D Web experiences. It will be really hard to sit next to all of them and pull them across the first 10 minutes of their virtual skill and orientation ladder.

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freemium / web2.0 — No Comments
22
Mar 10

FT Strengthens Paywall, Does Special Google Access Track

naked girl swinging from chandelier sketch wallpaper

Ft.com is swinging from their chandeliers with 120,000 paying online club members. But is a closed community a long-term play?

Getting people to pay for content is the major focus for online. The Financial Times is taking a big lead in this area with more than 120,000 paying customers forking out £4 a week = £500k/week revenues . They claim to have 1.9 million registered users as well. The FT is an interesting case study as it has a very loyal following, is globally respected and customers have money.(ok, so WoW has 11.5mm paying customers paying £7/month)

This move raises some interesting questions? Is 120,000 a large or a small set of customers? More to the point is £25 million in revenue a year a  big enough number? For the FT as a publisher any cash has got to be good cash. They post 480,000 daily paper readers. They claim 55 million pageviews and 2.7 million unqiues. As a guess maybe the can monetize 75 million page impressions and yield £2.5 which is less than £200,000 month. The New York Times said back in 2008 that they needed 1.3 Billion pageviews to make online interesting– they only had 173mm at the time.

What is the trade-off? Blocking traffic will certainly reduce pageviews big time. Fewer pageviews  reduces click related ad revenue. Anyway for the Ft.com even if they lose 50% of their pagewviews–they only need 25,000 new customers in a year to break even on their paywall–which is less than 1% conversion on their uniques. The FT is really a sort of financial club, so is losing a bunch of non-payers even negative? More likely it will make their paying customers feel like they are getting inside track/info.

A bigger issue for FT has to be the cannibalisation of the newspaper subscribers. The better the ft.com offering, the less likely it is that busy jet-setters, captains of industry will buy the physical paper and just take the iPad versions. Probably 80% of the 120,000 paying ft.com customers also are within the 480,000 paper subscribers.  Do you want the FT twice?  Do those customers care? Or are the delivery mechanisms useful for different purposes?

The New York Times, which is not clubby and has much larger circulation and online viewership,  is launching a premium content plus special viewer offering called the Times Reader 2.0. It is an interesting move to make the paper more interactive online — cool enough crossword puzzles!  Maybe they will have special first person shooter games soon — play the Obama administration game of hunting up votes in Congress?

Dropping the free access also expands the market for their competitors–like Economist or Yahoo Finance. Economist is still trying to get their own paywall gambit lined-up.  Bloomberg is free on tv also.

The dual track access via google search is perhaps ok as tech solution to peek and pay, but really looks like bait/switch. Hitting the excerpt is more frustrating and I don’t think will help FT eat their customer cake and sell the crumbs to the unwashed public.

In terms of online community — is there something to consider about a closed community versus a public one?  Perhaps this paywall strategy will do quite a bit of damage to the randomness of comments and the dynamic nature of what the ft.com could be otherwise?

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convergence / web2.0 — 2 Comments
14
Oct 09

From Old to Newest Media in the Time of Convergence

One of the biggest distinctions between the future of what users will want to do on the internet from what they did or in fact are doing now, is the difference between being passive viewers and active participants. Old Media doesn’t get this important orientation on how it needs to treat its audience. Imagine a bar where you could only talk to the bartender? It is like the mentality of the Economist to set a paywall for their content and beg for their “loyal” customers to pay. The “make–>push” content model is not going to thrive in the Time of Convergence (which is almost really here this now btw).

In my little sketch above I am trying to tease out some of the key issues facing online media organizations. Our approach of course, as you can see in Heritage Key ( I hope), is from the almost-off-the-chart right position of newest media. We are trying to figure out how to mix the content-focus with social tools with the interactive tools in the most unique way.

I can break-down some of our ideas as follows in terms of the content that we make and people consume:

  • News — breaking items, needs to be fast on the site and some value add to reacting to web flares, creating news content is a big plus
  • Articles — this is the focus of the commission effort to effectively surround useful topics with a series of articles, interviews, video pieces. You would expect to gain some lift on google/SEO as you create content against sets of keyword objectives.
  • Media — images, video, galleries, maps that are either unique or curated. Presentation and navigation are critical. We use Solr now to add discovery aspects to site search.
  • Interactive — answer the challenge of what to do on the site. So we have some quizzes, but really the big attraction for Heritage Key is the Virual Experience (GoVirtual).  While enabling comments on a site is not always so easy, it is hard to consider that basic feature as very interactive these days.
  • Directory — collects, curate, manage relevant data that is needed by the community. Add community/social filtering to expose data back to site visitors (i.e. popular, rated recently, new)
  • UGC — shift now is to manage the flow of user generated content and raise relevance and quality. YouTube is struggling as an example to separate out the noise/infringing content from the serious/regular content creators. My sense is that the site owners need to direct/drive UGC a lot more. It will be the role in fact of the site to help people do more than they can otherwise do themselves = a better package, more traffic, more distribution, more promotion as much as a better concept.

These are the components, the challenge is to get the mix right and scale the production costs against the overall revenue potential of the site/brand.

As we continue to rollout our vision on this in Heritage Key, it is clear why Old Media doesn’t get Convergence and why even New Media players will have challenges making the next transition. Organizations work better on push. You can plan, manage push in a much more predictable manner. Where the site needs to marshall the community, well, it is a lot more difficult and outcomes less certain. Video killed the radio star. The requirements for success in the future will be no less dramatic. The “push” stars won’t “pull” communities.

One way to mitigate some of the risk is to get the hardcore users into the alpha/beta testing areas. It is important to engage people that will be the evangelists or even find solutions with you. But you will need to expose the ongoing work–which is a minimum is uncomfortable. With large deployed online brands it may require new branding and even new sites as testbeds/community crucibles.

Another point in comparing the players that is worth making is about the cost of content creation. The Old Media players have very high costs, often with long cycle times from idea to publish. Production costs must go down. Newest media content production is low and will get lower. The quality is perhaps not the same, but as we already see with blogs and tweets the immediacy is must greater.

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convergence — 4 Comments
8
Oct 09

Media Convergence = Browser on TV

I think about the future of media, technology so much that I worry that I think the present is the past. But check a LED tv playing a Blu-ray disc and immediately you will see that the future is now here (and can be delivered to your home by Amazon).

People who wax eloquently about how nice it is to open a book and feel the pages, see the great images in them of course still have a great point, but they should also consider how hard it is to get a Wii controller out of the hand of a 6-year old (or forty+-year old).

Media Convergence, what is it all about? Well, in a simple way it is the endgame where you can finally browse the web on your tv. It is, however,  a lot wider than just your living room as you can consume digital media on the go as well. You can download an eBook to an inexpensive reader and subscribe to podcasts on your iPhone.  LED televisions, which might catalyse Convergence to the next phase, are awesome and not so expensive even. These slim, low-energy devices blast intense digital data at you and in their afterglow, you will understand that the digital future will be arriving at your home real soon.

What is exciting about this Convergence though is not just the really cool ways in which we can access media or how stunning the quality is–it is the shift from audiences being passive watchers of broadcasts, printed materials to the active mode of pulling what you want, when you want it, how you want it. Further the social web puts you into the mix and let’s you participate and (typically) enjoy the interaction a lot more.

It is really this fundamental change in consumer behaviour that will be impossible for “old media” to deal with.  The audience needs to become the community. The content creators are not commodities but the leading voices and micro-stars that engage and drive the energy. The web generation is consuming online data voraciously. It is active, it is multi-threaded, it is cross-platform — and they are the stars of their own shows.

Online advertising is already pushing beyond both print and television. What is going on in the Book Publishing Industry? Of course a lot of the latest data coming from print, media and book publishing industries is depressed due to the overall global economic crisis. But nonetheless, if you take a look at the stats from the AAP about US book sales in July 09 book sales you can see some interesting trends.  Sales for eBooks are $16.2mm and growing rapidly–but trivial in the mix of the $25 Billion industry.  New hardcover and paperbook sales were holding their own during the summer time, but taking a beating compared to last year. Mass market titles are potentially no-man’s land down 15% compared to last July and down 5.3% for 2009 trend–probably this area is under the most direct pressure from online.

Book publishers should also be very concerned about their Educational books — where they enjoy some big margins, but also face major issues with costs for students as well as a whole new way of studying.  Higher education titles had $941mm sales out of a total of  $1.54 billion which is more than 60% of the total pie. What will the new media landscape do to the textbook market? Is the combined force of economic pressure and the newest way of digital media consumption a cocktail that shakes the publishing industry into a froth in 2010? Net net, Book Publishers are fighting online for shrinking piece of a shrinking pie.

We are thinking a lot now on how to create the new wave of content and brand experiences that will thrive when it is really out with the old and in with the newest in 2010. Our first pass on all this is Heritage Key. Check it out and let us know if we got it right or not!

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freemium / web2.0 — 3 Comments
7
Oct 09

The Economist Erects the Paywall (follows FT)

The Economist, who runs Drupal like we do as their core CMS btw,  sent me an email today explaining the free access to their site will change dramatically on October 13th. Content from the print editions and .com articles older than 90 days will only be available to digital subscribers–who will pay $79/year or $19.95/month. No Free Looks at the Newstand and Fewer Online also There is also an “academic” subscription for 4 months at $30.

Ben Edwards, the publisher, further tells me in this email (and really I didn’t even know I was registered on their site even) “We will also enhance the experience we offer our most loyal readers by expanding our subscribers-only features.” So, the Economist is trying to link loyalty with paying–seems like a terrible idea. Loyalty comes at price? In fact they are the ones “taking something away” from their audience without really offering some new value. So where is the loyalty on their side of the relationship? Wouldn’t it be more compelling to offer a subscription that added more than the free offer? Or maybe just state the truth–we need more money and less noise from too many users? But let’s see how it goes.

The Financial Times has been charging for content for some time already at £3.99/week = $640/year! The Guardian ferreted out of them that they have about 110,000 payers = more than $7mm in annual revenue.  Guardian quotes Lionel Barber from FT:  ” He said the new digital world “poses a threat but also an enormous opportunity to established news organisations”, and warned that the “mediocre middle” was most at risk.”

Looks like the Economist is going cheaper and after larger base of payers.  They missed the opportunity for the 110,000 and more people that are paying for FT. I guess they will need to market this pay-to-access a lot harder. Right now there isn’t much info on the site to inspire “the loyal” to reach for their cc or pp.

We think the “Freemium” model makes a lot of sense, but how it is introduced, marketed and supported is going to separate the winners from the panicers.  The example of Flickr charging for a “pro” acccount at $25/year seems to work.  There is in fact a massive amount of loyalty for Flickr as the hardcore use it as a key online tool/resource/social area. I would even say that Flickr could reasonably charge more.  Yahoo doesn’t release details on the value of the pro accounts, but we might guess they are worth $5mm–$10mm? But no mattter how you look at it they need other revenue sources–like ads shown to the non-pro accounts.

Freemium needs the revenue mix. The risk of course is that in going to a paywall like Economist is doing, you alienate your overall audience and lose more revenue in the process than you gain.  But maybe downsizing the audience and finding the true core is the way to go anyway. If there is a lot activity on the site, but no monetization from ads/sponsorship, then what is the point of having a .com anyway?

Components to the Freemium Mix:

* Subscribers — trick is to get the offer right and add something to free that is useful, but doesn’t cripple the free access = traffic volume

* Ad revenue — via ad networks, adsense / hard to get this productive without traffic and it can clutter up the site

* Sponsored Content — also good  for co-creation on new content that could deliver big lift for both parties

* eShop — exclusive products/web only — but what to make, offer and can you fulfil orders? and what about returns?

* Affiliate Deals — like Amazon, Commission Junction –which can deliver high cpc values, but maybe not high total revenue

One way to think about Freemium is to consider the marketing costs to attract people to a premium only site. So the Freemium has a built-in flow from SEO if you do it right.  if your content is behind the paywall is won’t get crawled = it doesn’t exist online. Also if you have a community site–well, you need enough people to have  comments, discussions etc. Premium only will never have the same immediacy, scale, rawness, openness as Freemium. So in fact, Premium vs Freemium vs Free sites will be very different experiences.

I think also there is an interesting aspect about the value of the community contributions. Shouldn’t people that make comments, add content get some recognition? We have a points system and can imagine reward activity on our sites. But of course we a fresh view on this aspect, where “old media” is looking to penalize the freeloaders (who in many ways created value for them).



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