Comments on: Kamikaze Marketing

By: David Semeria

David Semeria — Sat, 11 Jul 2009 15:41:18 +0000

Jonas, the App Store is very instructive. Above all it demonstrates that if you take away the friction, large numbers of people don't have any problem with paying for stuff on the web.

It's also interesting to note that hardly any of the software/services offered in the App Store are subscription-based.

The App Store represents an excellent model for how to charge for products. The real challenge going forward it find a model which works for services.

Subscriptions are not the answer.

By: Jonas

Jonas — Sat, 11 Jul 2009 13:24:11 +0000

Micropayments work if you do it right - just look at the iPhone App store.

By: David Semeria

David Semeria — Mon, 06 Jul 2009 12:28:26 +0000

Glad to hear it. I just wanted to describe how the concept can be applied to many different types of service, not just pure content.

By: fredwilson

fredwilson — Mon, 06 Jul 2009 12:15:30 +0000

disqus is being monetized. there are paying customers of the Disqus Plus
which is their high end offering. the company is not talking too much about
that as it is still early days. there will be a number of paid offerings
combined with the classic free offering. they are very much a freemium play.

By: David Semeria

David Semeria — Mon, 06 Jul 2009 11:12:59 +0000

I answered that question with an email.

While you're here, let me give you an example of a service close to your heart which could perhaps benefit from usage-billing - Disqus. I really like the service, but I have absolutely no idea of how it could be monetized - apart from advertising, of course.

What if Disqus said that for up to 100 (or 500, whatever) comments a week the service is free. After that it you start paying a tiny amount for each comment up to a maximum weekly fee (the maximum fee can be different for commercial and non-commercial sites).

Each website would get a monthly bill for the total amount of usage, and at the beginning of each week the usage counter gets set to zero.

I don't see how anyone could worry about lock-in or argue the system isn't fair.

By: fredwilson

fredwilson — Mon, 06 Jul 2009 10:45:06 +0000

who would be an ideal industrial partner?

By: David Semeria

David Semeria — Mon, 06 Jul 2009 10:22:37 +0000

I don't know of any general-purpose examples for the browser, but similar models have been very successful in the cloud, as I'm sure you know.

The key problem with usage-based models, even if they are viewed as being much fairier by users, is that you can't just graft them on to existing technology. Amazon understood this and invested heavily in creating a software infrastructure to support their model.

We have created a general-purpose platform for supporting usage-billing (for both software and content) in the browser, but given the size of the project and the technical resources required, we don't think it can be rolled-out without the involvement of an industrial partner.

By: fredwilson

fredwilson — Mon, 06 Jul 2009 09:59:11 +0000

is there an example of this model working somewhere right now?

paid music services like rhapsody could use something like this

By: David Semeria

David Semeria — Mon, 06 Jul 2009 09:04:56 +0000

Absolutely.

LM's micro-billing envisages a threshold level of usage below which you don't pay (and is reset every week/month etc). There is also a maximum fee, so that people can know the most a service could cost per month/week.

Only active users pay for the service, and since everybody pays the price can be much lower.

By: fredwilson

fredwilson — Mon, 06 Jul 2009 08:47:08 +0000

if they can make that work, the micro-billing, then i agree

but i also think it should happen after some implicit free trial, which is
what i like about the nine free visits