How to make money in web2.0

In answer to Aljosa Japundzic’s post about how to monetize a web2.0 service, here my small reply. Of course you can go for the old school ad-model, or even try to sell your data for marketing use. But there is also a third option: the pro account. I translated a post I made a while ago about how Google could make money with YouTube by creating ProTube.

I was originally inspired by the book “Information Rules” from 1999 that explains how you could give away free software and still make a buck by creating a pro version. I shall write down six strategies that can easily be blended or broken in smaller pieces, and end with an example for the ProTube case.

More Options
This one can be found, for example, by Flickr or LinkedIn. Those who pay have an easier way of browsing and working with the site than those who don’t.

Quantity / Quality
Also a Flickr option (but also found on Live Mail and Gmail), those who pay have more storage, or can use a higher quality version of your product.

Speed
Sometimes the case, pro users can download and upload files at a higher speed. Or if it's still the case, can access the version of your site that is hosted on a faster server.

Delay
Users who pay can first use your lab and beta features, and can get a higher degree in involvement.

Annoy
Although it sounds a bit rude, this is what a lot of sites use - annoy the non paying visitors with advertisements, and let the pro-users work ad free.

Support
And the last example, one from the old world, gives support to you users; gives them the possibility to be in contact with a real human. Make them feel you still care.

The ProTube case
Although it seems now that Google is going for the add revenue model for YouTube, it isn’t that hard to imagine how they could make money by selling pro-accounts.

• Pro users can edit their videos, and can upload several videos a day.
• Pro users can watch all videos in high quality and can download them in several formats.
• Features from the lab are first given to the pro users.
• Pro users don’t have to watch advertisements.
• Questions of pro users will be answered by humans in a reasonable time.

I have a strong feeling that the people behind Flickr knew all those ideas, and combined them to build a great photo site. Which is still the only web service where I bought a pro-account. So next time you try to finance your project with Google ads, think about the alternative.

This is the first post of Sjors Timmer, who recently graduated as a Master in European Media and is working for an exciting web start-up and blogs for several websites.

Lonelygirl15 is boring

If, in the midst of all the 2006 buzzwords, we had to go for the ultimate one, it would be "web video" or rather, YouTube. The stats that are published last week in the newteevee.com article Go Stat Wild: February Video Traffic confirm the obsession of marketeers, advertisers, investors and mainstream media over YouTube. The poster child of user generated content. The ultimate fulfillment of Andy Warhol's 15 minutes of fame prediction. The company that was consuming terabytes per day in bandwidth, and would have succumbed under these costs if it wasn't for Google.

It's ok to obsess over a bright new kid, but the side effects are somewhat annoying me. A few examples:

1. The majority of web video consumers are not using the hosted services. If they forward web videos, they'll often use peer-to-peer networks, instand messaging or even plain old e-mail (with the video as an attachment!)


2. Every big internet player feels obliged to launch a me-too-youtube initiative. Me-toos are boring.


3. Advertisers ask their agencies for campaigns that depend on user generated content. Only an utter minority of, say, the Belgian internet users is able to capture, edit en upload a pretty decent web video. And even if they do so, it wouldn't be to review this or that product. Most succesfull user generated web videos are variants on the lonelygirl15 meme, or the "my cat sneezed" variant. Lonelygirl15 is stuck in YouTube. And for frequent updates on your pet's health the kids now prefer Twitter.


4. There is no such thing as wisdom of the crowds. Really want to know what pleases the crowd? It's Idols, or any other show involving freaks. Anything involving bikini girls is a good second, and my guess is that cute animals are on the third spot.


5. It's no use to search for an advertising model. Pre-roll advertising annoys consumers. In-video product placement is tricky but might work in some cases. And launch a tv ad of movie trailer in Tubespace and hope it will go viral? Good luck with that. You'll have to compete with all the freaks, the bikini babes and the cute animals.

Does this mean we have to give up the idea alltogether that advertisers can somehow get in the mix again? Of course not. The only mistake advertisers can't afford to make is to export their "old skool" advertising formats onto the new web videosphere. This means: no intrusive advertising, no display advertising, no dirty tricks, not even subliminal advertising.

The only thing left to do is to re-think advertising. It will take a while before new advertising standards will arise. In the meanwhile, all an advertiser can do is follow this mantra: be passionate, be proud, and be honest.

Considering consumers as people

The media digitalization, as much as the contents classification (tagging), is strongly changing our habits starting from the way we communicate and the way we relate with companies. And this is happening very fast. Marketing and advertising have to fit themselves quickly, putting in crisis some of the elements that have been the core of the communication strategies for the past years; for example it needs to shift from the classic approach “consumers considered as target to hit” to “people with whom talking to”.

Considering consumers as people is a significant, complex but necessary step. In this way consumers are no more passive receivers of the advertising messages, but they become individuals with who make sense to start a true relationship, a conversation, a dialogue. Considering that these individuals have become content producers therefore they have become significant purchasing influencers.

To face this new communication ecosystem, it is not enough, naturally, opening a corporate blog or uploading videos on YouTube. It needs to start a real renewal in the way of considering a company, knowing that it is going to be a gradual and complicated process. In theory it seems to be easy: being transparent, building brands with clients, talking with them, etc. The main problem is that companies have always been used to just communicate, not to talk, not to really listen to. It is evident that leaving part of the communication control in the hands of people is something scary. But this is an irreversible route.

IAB Interact Congress video announcement

Alain Heureux, President of IAB Europe and IAB Belgium, announces "Interact": the first IAB Europe Congress in Brussels on the 4th and 5th June 2007.



You can also see this movie at YouTube or Metacafe

Viacom sues Google for $1 billion

Viacom sued Google and its online video subsidiary YouTube for $1 billion Tuesday, the first big lawsuit against the online video site and its parent for copyright infringement.