Ampers & Dot

Following up on last Friday’s post on advertising (wow Zach, way to stick with the constant posting… jerk), today’s all about the “freemium” model of web 2.0 monetization. Freemium refers to the concept of offering standard services for free but then charging for premium features. The theory being that you attract the masses with the free services, then pull in the power users by offering just enough added functionality to make the product worth some money.

The best example of freemium is Flickr. Most people see Flickr as just another online way to upload and host pictures… for FREE. But, for $25/year the photo-sharing site offers additional image storage and sharing options for “Pro” users. The added features are supposedly good enough that if you’re a Flickr power user, it’s an obvious choice.

Makes sense, I guess. The only problem is that I’m not a power user so I don’t really get it. But what about something for which I am a power user? Say, Firefox (Internet Explorer just doesn’t make sense to me anymore), WordPress, or Twitter?

The concept is that the added features have to be compelling enough to make the free version seem less desirable, BUT while still keeping the free version as valuable as possible to draw users in to begin with. This is a daunting task and one of the main reasons that freemium models are met with skepticism.

But let’s look into the three examples I gave earlier: Firefox. What if you had to pay for extensions? Right now I use about a dozen or so add-ons to enhance my daily browsing (shortlist: New Tab Homepage, Advanced Dork, Quick Restart, SEO for Firefox, ColorZilla, Better GReader, Better Gmail 2, MeasureIt, Send Tab URLS, and about a third of a dozen (4) others). YES: I would pay for this functionality (well, some of it). New Tab Homepage opens new tabs into my homepage- yeah, I’d pay five bucks a year for that. ColorZilla let’s me find the color of anything on a page and returns the Hex code- an absolute necessity for blog designing. YES: I’d pay for it. And same goes for the others.

So what about WordPress (the blog platform that powers this site)- would I pay for add-ons here? Right now I’m using many, many plugins - the ones that you can see are: AJAX Comment Preview (the cool thing that lets you see your comment (go test it out by commenting!)), Get Recent Comments (to show you the active conversations), the AddThis button (little thing that lets you share my posts with others (that you never use…)), and the rest are all behind the scenes things that I would ABSOLUTELY pay for because they help my blog function.

The last example: Twitter. Right now many have argued for making Twitter into a freemium service. With its incessant downtime, why not be able to pay to have the damn thing work? The service makes about $0 a year and has server problems about six times an hour. Let’s change this.

And here’s how: for $20 a year give people the functionality of unlimited friends and unlimited messages per day. The free service would then be throttled down by limited friends to 500 (so Leo Laporte with his 42,000 friends might want to pay for this…) and limit daily messaging to 15 per day. Most people don’t have 500 friends, nor do they Tweet more than 15 times per day. But the power users, who exceed these numbers, would be happy to fork over about $2 a month to be unlimited.

There, I just solved your problems. (Can I have a cut of the premium money? No? Damn.)

But lastly, the real problem with freemium: as soon as one company starts charging, someone else will figure out how to do it for free. The public will get swayed by the freeness which will take your users, and revenue, out the door. And that’s Plurking annoying.

What would you pay for online?