Monday, July 24, 2006

BUSINESS MODELS://Moving from free to for-pay at Amie Street

Moving from free services to for-pay is a hard thing to do. Think of free music/video, free websites and applications, free newspapers, free banking services, free broadband (even if the latter two are not really free). They create a new generation being used to not paying for many products and services.

Move to paid services (TimesSelect form the New York Times), and usage shrinks. Of course, there is always advertising. On the internet, the targeted nature will allow you to grow for several years to come.

Other models include Skype (free voice, pay for features). Noteworthy are Jobster and Amie Street.
  • Jobster, which just attracted funding from Reed Elsevier et al, makes money from corporate customers. The model resembles the Live World (which just attracted funding from WPP) model: build blogs for corporate customers. UPDATE: see also JotSpot's corporate wiki building tool JotSpot 2.0: the whole Web 2.0 range of social networking, blogging and wikis for corporate customers!
  • TechCrunch reports on Amie Street, which has an interesting model: uploaded songs are free to download at first, but as demand rises, so does the price for each song. (In order to enhance this mechanism, people who recommend songs are rewarded.)