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Old 02-12-2002, 10:42 AM   #1
jnestor
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Default More and more paid sites

I'm starting to see more and more websites (or actually newsletters) going to pay only subscriptions. Top5 the venerable internet humor list went to once a week unless you pay recently and now NetSurfer's Digest the long running and popular website review zine is going totally pay only. They have an interesting article on why at: http://www.netsurf.com/why_subs.html

I don't actually agree with most of what they say in that article. I think it's very possible to run an ad supported site profitably and things will get better. I also suspect that they'll be out of business in 6 months since I can't see many people paying for their site.

Still, I find it an interesting trend. It'll be interesting to see if either of these can make a go of it. And then to see if niche web sites can make a go of charging for access.
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Old 02-12-2002, 11:25 AM   #2
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Well I guess, it is all perspective on this. I have to agree with you that sites that migrate over to a paid status will be hurt with traffic as the vast majority of the world does not realize just how bad this market for ad revenue has become.

In our field many shareware sites now charge or have a section were they charge for access to there site. But then again many of them have real staffs with large overhead and with ad rev being the only income it just will not cut it. They almost all have instituted things that you would have never seen 6 months ago ranging from popups, banner saturation, ads the size of a mack truck and paid inclusion. Maybe thats why we are picking up so much hehe. On the flip note we cannot even fill our inventory with DC FC etc. Just not enough ads out there now even with the big guys.

In our case we have just two people myself included and we do not rely on the sites rev for a living. I would think that this will become more and more the norm as major corps and midsize companies net wide are going under with there online presence daily as it is nothing but a drag to the bottomline.

I can name 10 major archives that have poofta in the last 4 months alone just in my area. As for everyone thinking it is going to come back I for one am doubtful on this, it is basically becoming the real world online and will remain this way, if your not profitable your out end of story and straight cpm advertising with great rates will never be back as well. Why? Because again like the real world you get paid if they get paid.

Just my dig on things but in my estimate within 3 months all cpm campaigns will be gone completely except for the largest of the large branded sites. Companies like CJ will be the future.

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Old 02-12-2002, 12:52 PM   #3
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I think pay for any services on the web will be a trend that will soon be accepted.

There are trends to show that most businesses would find it extremely hard to managed purely on advertising revenue. Even big giants like Yahoo are finding that advertising revenues are on a steady decline and alternative sources of income must be found.

With the number of people shopping online increasing year after year, many people would not mind paying for quality content that meets their needs.

This is where a micro payment model has to kick in . Companies like paypal who enable people to do micro payment transactions are the companies who will thrive in the future. These companies of course must provide a secure model which enables consumers to trade safe (secure transactions) and a not so-techcie/geeky (easy of use) fashion. People are still not so confident about using their credit cards online and thats why services like paypal will prosper.

If a micro payment model can be applied globally and have a reach expanding all over the world, than paid websites will be the norm of the future.
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Old 02-12-2002, 03:00 PM   #4
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A few decades ago people thought that nobody would actually pay to watch television. Now I doubt there are more than a few people out there that can say that they can watch TV for free, without any monthly charge. If enough websites switch to a pay-only service the masses will begin to accept them.

As for the micropayments system, I think it could work, although I think it needs to be run through a system much broader and safer than PayPal. I think a different company will make such a system, and if I only knew which one I could make a very good stock investment right now.
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Old 02-12-2002, 03:46 PM   #5
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david,

A very big incongruity in your analogy is that there are no hobbyists providing free content on TV.

On the net there will always be hobbyist webmasters who will produce good quality, content rich websites without looking for financial gain.
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Old 02-12-2002, 05:11 PM   #6
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I have to agree with you Robert that the web will have its share of hobbyist giving us quality content.

However, there will come a stage where even this hobbyist will have to bear some cost and this cost has to be passed down to somebody. People understand this and will pay if they really value the content.

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Old 02-12-2002, 06:40 PM   #7
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Good point Robert. The hobbyist sites will likely always be around and likely will always be a deterent to people paying for content. I imagine the hobbyist will also be able to cover their costs with advertising. The questions is can the hobbyist turn a website into a reason to "quit their day job". And if so will this be via an upturn in advertising or the ability of at least some hobbyists to get people to pay for content.

Top 5 from what I can tell started as a purely hobby kind of endeavor. According to them it now requires one person full time to do the work and they seek to pay for that person via the subscription fees.

Randy Cassingham's This is True newsletter is similar.

Netsurfer Digest as far as I can tell started as a business - ie they raised money and hired employees from the start.
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Old 02-12-2002, 06:52 PM   #8
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the problem is, if there is a shift towards the hobbyist (free) sites, then those hobbyists will have to figure out how to cover their much increased bandwidth costs.

And at that point, it ceases being a hobbyist site.
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Old 02-12-2002, 07:27 PM   #9
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I think even more important than money is the time to keep the site updated. I'm making good money with my website, but still its very difficult for me to get some spare time to update my site.
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Old 02-12-2002, 08:54 PM   #10
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I never liked the idea of pay subscriptions as they pertain to certain things:

Bulletin Board: I don't like the fact that I would have to pay to share my knowledge with others. All the owner is doing is providing a forum that anyone could have done. It's all user contributed content, and unless you want to pay posters for answering questions, you're being pretty greedy.

Napster: Unless Napster wants to pay me grievances for my bandwith people use, I wouldn't want to be charged for people to download off me.

Content sites: $2.95 is a pretty common price for a monthly rate as it's usually the lowest one could charge with some processors. $10 cpm is considered an awesome price for unique viewers. Do you think your content really is worth $2950 cpm? If someone charged 10 CENTS a month they should be making a tremendous amount. Now that's a reasonable fee, and is about 100 times what they already make. If you could convert 1% of your visitors to paying a dime a month, you're doing pretty darn good. If I had to pay $2.95 for every site that complained about the market instead of trying to improve their conditions, I would be a very poor surfer indeed.

Overall, I think if you're going to charge, charge an extremely low rate, as does it really cost you $9.95 a month to let one person post at the board? No, it costs more like 5 cents. Anything more than a subdollar range is price gouging.
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Old 02-12-2002, 09:17 PM   #11
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I came across a nice article by Knowledge@Wharton a few days ago, which covers this topic.

http://knowledge.wharton.upenn.edu/a...&articleid=417

It's worth a read.

Quote:
Consumers will agree to pay for some content, but only if it is truly valuable and impossible to find elsewhere, Reibstein and Croson contend. In other words, the content "has to be proprietary and differentiated," says Croson.
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Old 02-12-2002, 09:33 PM   #12
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Here's a great free-to-pay resource, for more reading: http://theendoffree.com

I'm slowly reading back through the archives, and finding it great fodder for new ideas, or new takes on old ideas. For example, one article mentions that ConsumerReports is signing up over 75,000 paid subscribers a month to their online service. At a renewing $5/month.

That's pretty incredible. What's even more incredible is that the site is, umm, basically empty. I paid for it a few months ago, and was appalled at the lack of content, and the lack of common-sense wizards/tools I would have expected.

Anyways, it's an opportunity for someone with a few million dollars that wants to do it right, I think. Of course, they are a non-profit, and if you were a for-profit it might be harder to get going. They have also been around forever and built up a reputation. That said, really the site is incredibly bad.

Sorry for ranting, I couldn't help it.
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Old 02-12-2002, 11:44 PM   #13
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My opinions (which are worthless..otherwise, why would I post them for free?) are this :

* Unique sites that are hard to duplicate without a notable upfront cost will (generally) survive and thrive

This wasn't true several years ago. Thank goodness it seems this may finally be the case. Fortunately, a ton of venture capitalists were burned during the last go 'round. Many were burned on the next opinion I hold...

* Unless a site can earn the majority of it's revenue from something other than advertising, an easy to duplicate site (except for a handful of those that already have a major user base) is very likely to fail as anything other than a hobby site

This holds true for the majority of "not easy to duplicate sites" as well. The exception being those unique sites that truly take advantage of direct advertising (which is a VERY taxing venture). Otherwise...

* Sites must embrace a mixed model of pay features versus free features to be successful over the long haul

Straight subscription sites are normally a bad idea. Why pay unless you can actually see results? Still, a site must give a user reasons to pay other than a promise of "something better." This isn't an easy goal to achieve, but one well worth attempting. Finally :

* A site must be lean

A site that makes $100k a year with 10 contributors is not successful. That's because there are 10 people that need a cut. On the other hand, a site with 2 contributors and the same income is a success. A simple theory, but one that is often overlooked.

Them's just my opinions. As always, best of luck!

--Mike
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Old 02-13-2002, 03:03 AM   #14
tristram1
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Hello,

The amazon.com honor system is designed to make small donations to websites easily.

I wonder how amazon.com is doing with their honor system. Anyone has any news at this?

thanks.

tristram
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Old 02-13-2002, 03:20 AM   #15
Heartz
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How are webmasters who have subscription based services doing ? Anyone on this board offer such services ?
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