Re: Revenue Strategies

From: Randolph Scruggs <randolph_scruggs_at_email.msn.com>
Date: Mon 3 Apr 2000 12:06:34 -0500

THOMAS GRADY WROTE:
> I can't decide whether to charge a monthly
> subscription via credit card (say, $15)
> or go out and sell advertising for the site

Thomas, Content may be king. And the top three things
about a site may be Content, Content, Content. But,
unfortunately the web is a place where the
Enclyclopedia Britanica is free and the few places that
I do pay a small anual fee for I get access to a huge
aray of data as I need them. So the trick for most
sites seems to be figuring out a way to make a buck on
content whose value may be high, but whose relative
value to free content may be nill. A few models of
pay-for-content seem to do OK, but they tend to be
areas of addiction (e.g. porn), high committment (e.g.,
some religious, charity, and politcial), downloadable
versions of traditional products (e.g. software, music,
videos), searchable versions of enormous data bases
useful for researchers, investigators, lawyers and the
like (e.g., Electric Library) or e-versions of time
sensitive off-line publications (e.g., WSJ-although for
some this may better fit under addiction). If you
wanted to do a pay-for-content (I consider software a
special case of content) site with the target group,
you would probably want to have a long free-trial
version or a free limited edition home page with
critical extras for subscribers.

But the good news is that the eyeballs of the people
who might be interested would be fairly valueable to
other marketers. So advertising, sponsorships, and
affiliates would seem to be the most logical revenue
model to go after first.

If I were a potential investor, I would want to know
whether the same information is already offered free or
bundled through other sites. And, if they don't, isn't
the concept so simple that it would be easy for a
programmer to add to a Quciken site or other finacial
portal? If you had access to historical information,
forecasting models, norms, or other information that
would be difficult to find or duplicate elsewhere, then
either model starts having more appeal. Even then, my
exit strategy may be to sell the technology/proprietary
information bundle to a major financial portal rather
than trying to develop the niche site as its own
enterprise. Quciken, for example, has more options for
monetarizing your customers than you do, therefor they
may be willing to pay more for your proprietary
content, if you have some, than they would be willing
to pay you for advertising on your site.

When we finally get the ability to pay nickels and
dimes for small chunks of information, I expect the
landscape of the web to change dramatically. Many sites
that are currently losing money may have a chance, many
that could not get funded may, etc. If any reader has
opinions or forecasts on that event, I would be
interested in hearing from them.

Randy

Randolph B. Scruggs
President, Strategy Mavens Inc.
randy_at_strategymavens.com




Received on Mon Apr 03 2000 - 12:06:34 CDT