Social Infotainment

Freemium Business Model: The Dilemna

2009-09-18T03:14:00.009+05:30

How long can the Startups hold to the mantra of Free!

Right from the advent of commercial use of the Internet, everything has been expected to be free both by the consumers and the producers. Be it content or services everything has always been free, or at least most of them.Giving away a product, service has always been a great marketing concept. In the bullish Web Startup space the idea has always been to get the eyeballs first and to think of monetizing them later. Google has managed to do it successfully, Facebook has always been on the same line though the sun ain’t shinning yet on them. Twitter’s monetization has always been a point of discussion. But is it really worth to give your stuff for free?

Then there is idea of providing your services for free and charging a premium for extra features etc, know as the freemium model. There are a number of services on web proving there services on the freemium business model, from Xobni to Gmail every other service has a premium feature list attached to it which can be used at a premium. Even content/blogs have been experimenting with this model, see Gigaom with Gigaom Pro, or the paid reports at Techcrunch.

Why is web so obsessed with freemium?
It all begin when web exploded with exponential numbers during late 90's every other developer had a great product the only way to attract mass audiences was to give it for free, then came the bust. after that the idea still lingered only thing that changed was that the companies/venture capitalists were cautious about revenues and commercial viability of the product so then came the premium part making the freemium model as we see today. Even the 30 day trial softwares exist on this ideology that user will get hooked and proceed to buy the product.

Furthermore unlike any other industry the operational costs(bandwidth, hardware) gets cheaper each days, which fuels the idea of free in freemium.

The Dilemma
What should be charged?
When should I charge
Whom should I charge?

There always is a debate among the product developers that what features should they charge for, if its too less the potential customers might not see the full value, if allot is given for free then it might become a freeloaders heaven. Some statistics show that only 3-5% of the free users opt for premium versions later. And the percentage of the users who jump from free to premium in minority of the total users using the premium versions. Thus it is highly unlikely that by having a free version of a service the company get any premium users in future. 37signals with their flagship product Basecamp is one of best examples of a company with successful adoption of the freemium model. Giving the idea to the user that the service being provided is a free version and the premium one might be rolled out later is a better approach than, first getting everybody on the board and then thinking of rolling out a premium version so as to supplement the adverting revenues or keeping the company afloat. This model is destined to fail.

Then there is dilemma regarding what should be charged for the premium service, its hard to sell a product at 250 $/ month if a free version exists. or the services can be priced dirt cheap so that the conversion from free to premium user increases. But there are two things that hinder this

1)The user base is not geographically locked in most of the cases of web application, a free service with say 10 million monthly users if starts to charge 50cents for a months usage to American users will opt for it, but the users in countries like India might not be very happy about it.

2)No one wants to risk once established user base and go for 100% premium model, since the entry as well as operational costs are so low in Web business if a hugely popular service starts to charge every user, even though it being cheap, other will quickly jump to provide a free alternate.

Recomended Reading: Some Serious Statistics on the Freemium Model

Business Factoring: The Basics

2009-09-17T12:31:00.013+05:30

How Startups can fund their business using the practice of business factoring.

Business Factoring is the practice to raise capital by selling the orders who's payments are yet to be received/invoiced. The invoices are sold on a discount to a third party in exchange for immediate cash.Unlike a bank loan three parties are involved in the process.

This mode of raising capital was previously common in textile and manufacturing industry but now-a-days almost all types of business consider business factoring as a mode of financing at one point or another.Companies sell their invoices at a discount to their face value if the calculations show that it is better to use the proceeds to strengthen its own growth rather than functioning as its customer's bank.Henceforth factoring should only be practiced if the rate of return on the proceeds invested in business expansion exceed the costs linked with Factoring process.

The IT, ecommerce, Saas companies can use business factoring in the times of inadequate cash reserves.Some firms also resort to this practice to show extra cash on their balance sheets.

CrunchBase Information

meebo

Conduit Platform

Information provided by CrunchBase

5 Kick Ass iTunes Alternatives

2009-06-15T17:19:00.003+05:30

I’ve had enough with iTunes its slow, has a massive memory footprint, and half of it is a store which I don’t really use. So here are five alternate ways to laden your sexy iPod.

Songbird is an open-source customizable music player. It's built off of the Mozilla API and combines the web and music management in one, and is a great way to find new music. Supports importing media, formats supported MP3, FLAC, Vorbis on all platforms; WMA, WMA DRM on Windows;AAC and Fairplay on Windows and Mac. Is crossplatform, Support dor 25 languages, Browser, Library Management, Custom UI, has support for all the iPods except the Touch .. bummer. In short lots of stuff but no iPod Touch !!

LINK

foobar2000 is yet another advanced freeware audio player but just for the Windows platform.Its free, supports gapless playback, customizable keyboard shortcuts, secure CD ripping, streaming support, a lot of audio formats(details)

LINK

This thing is still around? Yea, the granddaddy of Windows music players is still alive and kicking, Winamp will still get the job done. The Full version (which is free) and the Pro version both include integrated iPod support and all version will playback iTunes protected files, again, as long as QuickTime is installed.

LINK

Its all rings and bells, manage your music with playlists, Support for MP3, AAC (M4A), OGG, WMA, FLAC, MPC, WAV, CDA, M3U, PLS, etc.Sync with iPhones, iPods, and most any MP3 phone or Audio Device, Record & Convert, Tags, Burning, Subscribing to podcasts, Customizable Skins.

LINK

This one is the simplest of them all. No music playback, no playlists nothing. Just a simple, quick and reliable application to load your iPod with some music.

Currently in its alpha stage it doesn't support Photos, Video.

LINK

Publish any File as a Public Web Site in Seconds

2009-06-13T02:59:00.007+05:30

A free no frills service to publish any file as public site. Every converted file to a web page has a unique web address so you can share it with friends, or other people on the internet. This allows information to be shared quickly and efficiently to a large audience.

Pros

No download limits
No CAPTCHA codes
Multiple simultaneous downloads and uploads
Unlimited page bandwidth
No sign up required
No software to install
Link directly to the generated web page

Cons

File2.ws is NOT a place for permanent data storage or backups, any file may be deleted with or without warning.
File2.ws is designed to host files which receive lots of hits, if your file does not receive lots of hits then it will be automatically deleted.
You can not upload a file more than 15 MB at once.

Link

A ‘Wow Dats Cool’ RSS Reader

2009-06-13T02:41:00.002+05:30

All of us have seen a news ticker or a stock ticker, now how about a ticker that displays random stories from a list of RSS feeds you tell it to track, that means practically low maintenance personalized news source and that too done so neatly.

Meet snackr, it's an RSS ticker that pulls random items from your feeds and scrolls them across your desktop. When you see a title that looks interesting, you can click on it to pop up the item in a window.

Requirements : Adobe Air

Download

Spending Too Much Time on Twitter .. err This Should Rescue You

2009-06-13T02:13:00.002+05:30

I’m always looking for better ways to organize my life which translates to spending less time organizing and more time doing. There’s so much of Getting Things Done stuff out there. But at the end of the day who’ll tell you that you’ve been too busy socializing on facebook or tweeting the trending topics. Well here’s a solution.

ManicTime automatically collects data on your computer usage. It records active and away time, as well as which applications you used and for how long you used them. All the activity information is logged in a local database so that the privacy is not compromised.

Simple Graphic Presentation Of Your Daily Activities
Accurate And Efficient Way To Tag Time
Find Out How Much Time You Spend On Different Tasks

here’s a screenshot

Link

Gmail Mobile on Steroids

2009-06-13T01:44:00.003+05:30

Today Google announced two improvements for Gmail for mobile. These improvements are for iPhone/iPod Touch OS 2.2.1 or above, as well as all Android-powered devices, and is available for US English only.

The first improvement is faster address auto-completion. Google speed’s up the process by reusing previously fetched matches in subsequent searches.

Another improvement is the Keyboard Shortcuts. Complete list of the keyboard shortcuts can be seen here.

A No Nonsense Productivity Tool

2009-06-13T00:52:00.004+05:30

The single most important task in increasing your productivity is to get the things bogging you down on a to doo list. There area numerous ways/applications to do that. But Doomi as one app that does all the work sans any bells and whistles.

It is an Adobe Air app so it runs on Windows Mac OSX and Linux. It just stays out of our way and out of your browser. It has all the basic features one uses, and none of the ones you don’t. Create, edit, set reminders, and keep archives of your old tasks. It can’t get simpler than this.

Though I’ll appreciate if they come out with an iPhone app.

5 Most Popular Uses of Twitter. And How Can These Affect its Monetization Strategy.

2009-04-28T16:22:00.003+05:30

Over the past year Twitter has been the media favorite, primarily because of two reasons

Explosive consistent growth
Speculations about its revenue model(if any?)

Apart from these factors. Celebs like Barack Obama to Britney Spears, and now Oprah have fueled the growth. But Twitter being a business what matters at the end of the day is how people use its services, whether as a medium for conversation, following the topics of there interest, or to search for information.

Uses ?

Micro Blogging Platform. The intended use by its co-founders(also the people behind the popular Blogger platform). A lot of bloggers use twitter as a medium to publish feed to their original blogs. Or tweeting about other people’s posts relevant to their niche. But the original idea of micro blogging is practiced when one tweets about a certain event happing in real-time.

Affect: In such a scenario people will continue flocking Twitter to find interesting and more importantly new stuff to surf. Also how many people have twittered(retweet) about certain content can certify its credibility.

Conversation Platform (micro brainstorming). People reply to their friend’s tweet and thus starting a conversation. This in itself has a very less potential however if somehow tweets result in brief brainstorming sessions then they might be of interest.

Affect: Much like other social networks, if twitter gets adopted as a mean of chit-chat will make it difficult to be monetized.

Life Streaming. Here what I mean by ‘Life Streaming’ is tweeting about things a person is doing/thinking. Much like the way facebook’s status updates.

Affect: There are currently three major monetization strategies being speculated

Advertising

Charging for Premium Accounts

Charging for API access.

If twitter is majorly used as a life streaming service, then going by the trend options 1&2 do not apply. However people will still be using the service for purposes like keeping a check on what there fav celebs, friends, parents or in some cases Pets, Homes, Refrigerates are up to. And as the current stats show majority of twitters use Apps instead of the original web version, so only option left would be to charge for API access, but then the app developers must also have a mean of earning, which is remote.

Customer Care | Public Address System. Using Twitter as a communication platform to have a one-on-one touch with their customers, or use by politicians, media, celebs etc to reach out the audiences.

Affect: Use of Twitter as the new age Radio will result in a cliché business model of charging the twitters(i.e the speakers). However chances of this being a reality are bleak.

Search. Twitter as a search engine. This is a dependable use(on the above four uses). Provided Twitter continues to capture any of the above activity in considerable numbers. It can certainly be a good business sin one way or another. Here’s how.

Affect: From users searching for news, to brands monitoring the conversations to collect feedback, or people finding other people(read twitters) of similar interests. All this can be easily monetized.

About Social Infotainment

2009-04-25T23:26:00.005+05:30

I’ve started this blog as medium for sharing my views on things like marketing, entrepreneurship, lifehacks. SocialInfotainment serves the early adopters, entrepreneurs and geeks to be better at what they like to do.

What all is covered at SI ?

Revenue Models
Startups
Speculations/ Discussions around an industry trend.
Internet
Mobile
VAS
eRetailing
Advertising
Productivity Tips (Lifehacks)

About the Blogger

SI is authored by Supreet Sharma. I’m a final year student pursuing my bachelors in technology majoring Computer Science. This blog defines almost what I am and what I want to achieve in my life. I feel I’m a born entrepreneur, tried my hands at lots of different part-time ventures thought my student life, earned my first profit in 7th standard by selling stickers popular among my classmates. Have been involved with lots of others ventures (some of them were really kind weird). But I must say most of them were profitable.

I’ve spent last 5 years of my life seeing how businesses revolving around Internet, Mobile have evolved.Learning by reading numerous blogs discussing the start-up ecosystem.So SI is a natural evolution, an attempt to document what opinion I have on the related things, and also an attempt at networking with like minded people.

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Social Infotainment's Mind Map

2008-09-17T11:35:00.002+05:30

This is a MindMap describing various ideas surrounding the topic/point of discussion of the various blog posts on SocialInfotainment, and how they connect to each other and thus fit into the SocialInfotainment ecosystem.

The MindMap is dynamic and changes over time as the blog progresses.
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