Great post. Agree completely and would go one step further. I ran a poll on this a few weeks back - suggesting people should pay £12/$24 a year. So far 53% said yes they would, 35% no, 9% would pay less and 4% would pay more. Vote here Mashable readers and let me know what you think.
Adam Hirsch
· 1 year ago
$20/year for a service that ROCKS is one thing, paying a $1 for content is another.
Long story short, I would pay Twitter $20/year for it to never go down!
jerry
· 1 year ago
That might a good idea for you 'cause your blinking ads are giving me a headache :-)
Mark Dykeman
· 1 year ago
Steven, your idea is certainly worth considering. I'm sure I could handle $1/month and if I felt that the money would go to good use, I'd sign up for it. If they lick the majority of their problems, that is.
Steven Hodson
· 1 year ago
I wouldn't be surprised if a lot of people would in fact sighn up for something like this - if it would reach the 50% mark I'm not sure.
Niko
· 1 year ago
I'm pretty sure that it wouldn't even reach the 5% mark. Look at how many people use Wikipedia every day, and how few donated in the last financing round. Given the fact that Twitter et al. are by far not as "useful" as wikipedia, I'd guess far less people will be willing to donate to these services.
beaulebens
· 1 year ago
A lot of people claim that they'd do this and they'd do that, but all too often, they really just won't when it comes time to put their money on the table.
Expecting a 50% donation rate (even of only a dollar) is *way* too high in my opinion. Maybe I'm too conservative, but I'd expect it to be more like around 5% if you were lucky. Now maybe Twitter is in a special position because due to its nature, it gets a lot of regular use, but still.
Steven Hodson
· 1 year ago
I agree with you Beau under normal circumstances but in the case of Twitter I think we could very well be surprised at the number of folks that would sign up either as a single shot donation or a monthly subscription.
Twitter has already broken the mold of what a successful web service should be maybe it could do the same here.
nb3004
· 1 year ago
I'm not sure I understand twitter is a business not a non for profit organization. It seems like asking for donations as a revenue stream so the founders and VC's can make a lot of money is uninspired.
Steven Hodson
· 1 year ago
why is it uninspired? .. can it really be any less inspired that slapping ads all over the place and hoping that'll bring in enough money to make everyone happy?
Ludovic
· 1 year ago
I totally agree with Beau. I think that there is a big difference between people saying they would pay and people would actually pay ! The rate would be around 5% and not 50 % ... thats way too high !
Yes 50% probably is too high for most Web 2.0 businesses after all they are all pretty well knock-offs of other ideas.
Twitter has broken the mold in so many ways that while 50% might be a stretch the loyalty and depth of the community around Twitter might surprise us all.
Jackie Peters
· 1 year ago
I don't think many people will pay, I wouldn't, not when there are other services that are comparable and free. I've been wondering lately why no one's charging for API access. You could leave the API open and free, but charge a percentage to anyone who profits from it. Facebook could get a piece of profitable applications, Twitter would have gotten a piece of Twhirl when it was acquired. But by leaving it open up to the point of profit you are still encouraging improvement and innovation. That seems to make the most sense to me and I can't understand why no one is doing it.
Steven Hodson
· 1 year ago
What is comparable to Twitter? The fact is that there really isn't anything that has been able to attract a community around it like Twitter has. We have put up with downtime and crashed databases and the best we can do is sit on FriendFed and poke fun at the Twitter downtime message screens.
If your network of friends and their network of friends (or even a fraction of them) are willing to accept the downtime and other problems around Twitter and possible through some actual money its way are you still going to leave?
Especially since no-one is forcing you to pay a single red cent?
shan
· 1 year ago
Sorry, not gonna work. More than 50% of internet users are outside of US. The users in developed countries can easily 'pay' for themselves if they agree to ads (click 5 ads a month @ $0.20 / ad)
OTOH, the users who are just coming online (from India and China) - for them $1 / month is a HUGE amount for something that's not worth it. Sure, they might blow up that money in a restaurant everyday - but look these people don't even want to pay for Windows, paying for an online service is out of question.
branden
· 1 year ago
yep, count me among the pessimists. 50% donation rate is a pie in the sky dream if you ask me. as for a straight pay model, i'm a pessimist there also. i think you'd see people abandon twitter for other services.
personally i think twitter stands a good chance adopting a premium service model. ala basecamp, the basic service is free and there are a couple pricing options (or a single option) above that. $12-$24 gets you unlimited tweets, no ads and a couple enhancements.
Felicia
· 1 year ago
My web series, The Guild, has been supported by viewer donations for 9 months now. It definitely is a small portion of the viewership that does contribute, but the loyal fans keep us afloat. I think there are people out there who will pay for a service, but if there is a viable free alternative, there is where you run into problems.
Steven Hodson
· 1 year ago
I have found the same thing Felicia with the WinExtra Community Forums which is supported by donations - both single shot and subscription based.
Sure the amount of money isn't gang busters but it "helps" defray some of the costs.
As well like I pointed out to Jackie Peters - where is there anything xomparable to Twitter. You can point to Pownce or Jaiku but then why hasn't there been a mass exodus to them especially during the recent hard times at Twitter.
The very tenacity of the Twitter community to stick with the service regardless of all this could very well bely the fact that something like donation subscriptions could be viable.
chris
· 1 year ago
Asking for donations is a bad revenue model, period. Musicians have offered their material for an optional fee and have failed miserably. Sure, you could earn enough to supplement a couple of folks, but there's no way a true company with real expenses, salaries, etc... can survive on "can you spare a dollar?"
I wish people would stop trying to get us to believe that freely available services are a consumer right. BTW, isn't that what many complain about WalMart? They move in, undercut the competition with "unfair" pricing strategies and drive them out of the market, right? Somehow they're wrong and companies like Google are right???
mikepk
· 1 year ago
Therein lies the fundamental flaw in the current form of web 2.0, the flaw that will eventually lead to it's unraveling or metamorphosing into something substantially different. We started offering a couple of premium services at grazr.com, without changing any of the services we had been offering for free (all of that remained free). We actually got feedback amounting to "how *dare* you charge for something".
It's not that there is no business model, it's that the philosophy of Web 2.0 has made it *extremely* difficult to apply any reasonable method of monetizing products or services. Everything *must* be free, oh and the service *must* be reliable, and please don't clutter my screen with ads, besides I don't really see them anyway.
Donations? I'd be curious what kind of participation rate you'd really get. My gut feel is that I agree with most of these other comments, you're crazy if you think you'd get 50%. I'd be shocked if you could get enough revenue to keep the lights on.
Steven Hodson
· 1 year ago
I totally agree with you that the ethos of the whole Web 2.0 everything should be free has created a really big problem for those looking to bring something of value to market and get something back from it.
But this isn't anything new ... just ask all the hshareware developers out there - if there are any left. The moment ad supported software or free downloads of this or that came in vogue in Web 1.0 you say a radical drop of peoples income. This was only made worse by the following Web 2.0 everything must be free.
I have never liked the philosophy of everything must be free and don't mind me while I block any and all ads because we don't think you should make any money.
It would be interesting to see what the result of a donation model on the size of Twitter would be. However I am for some reason a little more optimistic over it than it seems other folks are.
Keith Henry
· 1 year ago
You have some good points, but I disagree on one.
You say that:
"...the number of users is approaching one million ... and if only 50% of those took a donation subscription of $1.00 per month that would bring Twitter a nice sum of $500,000"
I think the problem is that subscribers is not the same as active users. You say "if only 50%" as if that's a safe reasonable figure. Conversion rates in this sort of product-extension are more likely to be 0%-1% somewhere. Even 10% is in-their-wildest-dreams high.
They might be able to pay their hosting fees this way, but millions of VC $?
There is money to be made in all this, but it's not a get rich quick model, and unfortunately that's what most VC want, expect and probably have been miss-sold.
Orrorin
· 1 year ago
I agree with Mikepk,the "free" philoshopy underlying web2.0 has brought us a dilemma. However, this has helped bringing us many new accessible services. Twitter is only one of them, and though we may agree paying a donation for our favorite web2.0 tool, what about the 20 others we use? Would you pay to get access to Youtube or all other UGC you visit?
Like most of their movies, it's one big pile of exaggeration, but we may find an ounce of truth.
I personally believe that the donation model will have limited results for a few top services, while the actual advertising model will dwindle and be replaced. So what's next? If we find no real alternative, VCs can still use ebay to auction their shares...
David Jaeger
· 1 year ago
There definitely does have to be a better revenue model for companies that want VC money... Uri's two step model is interesting.
However, I think that the biggest thing most companies miss are the "paid services" that can be added on top... For example, maybe twitter could roll out a private corporate version, and have one company show how having all of the employees in a department on a twitter stream increases communication, productivity etc.
Take Pownce's model - add the 250mb file upload, and add that as an upgrade (similar to Uri's idea)... There's really no lack of possible monetization methods besides for advertising. I could go on a rant about this one, but unfortunately, lot's to be done...
Rox
· 1 year ago
Seems to me there is a root problem, that can be summed up in the word "consciousness."
Right now, the market consciousness is all about the free. Business models are a side discussion to changing the fundamental experience of how we exchange energy with each other and how we place value on those exchanges, and how that value gets translated and transacted.
Some bloggers for example don't care about the money, they thrive on comments. Attention is their currency, both giving and receiving.
The more you scale, the more fixed costs you have; in the internet space it's more servers and more pipes.
Steven, your post is part of the consciousness-building process IMO. To me, we will get "there" faster once we address that fundamental challenge, and not let the biz model ideas distract us. How we perceive and feel about the exchange of money and other forms of currency is morphing; it's going to be a while before we have new systems that are generic enough for creators and consumers to identify and apply. OTOH, there is a ton of momentum moving us away from everything always being about the Benjamins.
To me, it is relevant to decide how, after years of free-binging, we want to return to the discussion of money. On the plus side, it is one of the easiest ways to measure and transact. OTOH, some people naturally garner gobs of it while equally talented and perhaps more generous others seem unable to get it. That is the part of the formula that is due for tweaking. The usury parts.
I think methods of "opt-in" are a stepping stone. As the creator, do what you want first and foremost, so you and your concerns are met. Let people pay who see value. Flag them in your customer database. Give them perks of some sort. And make no promises to those who are along for the ride, unless they are feeding you in other ways. Because once again, it doesn't always have to be about the money, and that also doesn't mean we have to take money completely off the table.
Marc Falk
· 1 year ago
If the uptime was acceptable, I would gladly pay 20$ a year!
amolpatil2k
· 1 year ago
Unlike some of my other comments, this one might be controversial so please take it with a pinch of salt (Mashable is most welcome to delete it).
In my opinion, everything in the world is based on competitive advantage both in the present and in the future. When we get paid by Adsense, we feel we have created value. In actual fact, we haven't.
Adsense hypnotizes us into thinking that by writing a few lines about something and getting a few hits, we really can create value. The truth is that value can be created only if we are able to reduce opportunity cost.
Because we remain hypnotized, we concentrate on our writing rather than on opportunity cost. In the future when opportunity cost does prove to be the only arbiter of value, we would find our competitive advantage lacking all thanks to Adsense.
charlie
· 5 months ago
Its no wonder that marketers are moving online and video is certainly where its @! Video is far more valuable than other adverting mediums because it so targeted...you are able to communicate your offering by speaking directly to your potential customers on demand, and track/measure performance! www.adwido.com
All Comments
Long story short, I would pay Twitter $20/year for it to never go down!
Expecting a 50% donation rate (even of only a dollar) is *way* too high in my opinion. Maybe I'm too conservative, but I'd expect it to be more like around 5% if you were lucky. Now maybe Twitter is in a special position because due to its nature, it gets a lot of regular use, but still.
Twitter has already broken the mold of what a successful web service should be maybe it could do the same here.
The Opening Hours
Twitter has broken the mold in so many ways that while 50% might be a stretch the loyalty and depth of the community around Twitter might surprise us all.
If your network of friends and their network of friends (or even a fraction of them) are willing to accept the downtime and other problems around Twitter and possible through some actual money its way are you still going to leave?
Especially since no-one is forcing you to pay a single red cent?
OTOH, the users who are just coming online (from India and China) - for them $1 / month is a HUGE amount for something that's not worth it. Sure, they might blow up that money in a restaurant everyday - but look these people don't even want to pay for Windows, paying for an online service is out of question.
personally i think twitter stands a good chance adopting a premium service model. ala basecamp, the basic service is free and there are a couple pricing options (or a single option) above that. $12-$24 gets you unlimited tweets, no ads and a couple enhancements.
Sure the amount of money isn't gang busters but it "helps" defray some of the costs.
As well like I pointed out to Jackie Peters - where is there anything xomparable to Twitter. You can point to Pownce or Jaiku but then why hasn't there been a mass exodus to them especially during the recent hard times at Twitter.
The very tenacity of the Twitter community to stick with the service regardless of all this could very well bely the fact that something like donation subscriptions could be viable.
I wish people would stop trying to get us to believe that freely available services are a consumer right. BTW, isn't that what many complain about WalMart? They move in, undercut the competition with "unfair" pricing strategies and drive them out of the market, right? Somehow they're wrong and companies like Google are right???
It's not that there is no business model, it's that the philosophy of Web 2.0 has made it *extremely* difficult to apply any reasonable method of monetizing products or services. Everything *must* be free, oh and the service *must* be reliable, and please don't clutter my screen with ads, besides I don't really see them anyway.
Donations? I'd be curious what kind of participation rate you'd really get. My gut feel is that I agree with most of these other comments, you're crazy if you think you'd get 50%. I'd be shocked if you could get enough revenue to keep the lights on.
But this isn't anything new ... just ask all the hshareware developers out there - if there are any left. The moment ad supported software or free downloads of this or that came in vogue in Web 1.0 you say a radical drop of peoples income. This was only made worse by the following Web 2.0 everything must be free.
I have never liked the philosophy of everything must be free and don't mind me while I block any and all ads because we don't think you should make any money.
It would be interesting to see what the result of a donation model on the size of Twitter would be. However I am for some reason a little more optimistic over it than it seems other folks are.
You say that:
"...the number of users is approaching one million ... and if only 50% of those took a donation subscription of $1.00 per month that would bring Twitter a nice sum of $500,000"
I think the problem is that subscribers is not the same as active users. You say "if only 50%" as if that's a safe reasonable figure. Conversion rates in this sort of product-extension are more likely to be 0%-1% somewhere. Even 10% is in-their-wildest-dreams high.
They might be able to pay their hosting fees this way, but millions of VC $?
There is money to be made in all this, but it's not a get rich quick model, and unfortunately that's what most VC want, expect and probably have been miss-sold.
Would you pay to get access to Youtube or all other UGC you visit?
Have you seen this vid from IPower? http://ipower.ning.com/netneutrality
(sorry,don't know yet how to put a link)
Like most of their movies, it's one big pile of exaggeration, but we may find an ounce of truth.
I personally believe that the donation model will have limited results for a few top services, while the actual advertising model will dwindle and be replaced.
So what's next?
If we find no real alternative, VCs can still use ebay to auction their shares...
However, I think that the biggest thing most companies miss are the "paid services" that can be added on top... For example, maybe twitter could roll out a private corporate version, and have one company show how having all of the employees in a department on a twitter stream increases communication, productivity etc.
Take Pownce's model - add the 250mb file upload, and add that as an upgrade (similar to Uri's idea)... There's really no lack of possible monetization methods besides for advertising. I could go on a rant about this one, but unfortunately, lot's to be done...
Right now, the market consciousness is all about the free. Business models are a side discussion to changing the fundamental experience of how we exchange energy with each other and how we place value on those exchanges, and how that value gets translated and transacted.
Some bloggers for example don't care about the money, they thrive on comments. Attention is their currency, both giving and receiving.
The more you scale, the more fixed costs you have; in the internet space it's more servers and more pipes.
Steven, your post is part of the consciousness-building process IMO. To me, we will get "there" faster once we address that fundamental challenge, and not let the biz model ideas distract us. How we perceive and feel about the exchange of money and other forms of currency is morphing; it's going to be a while before we have new systems that are generic enough for creators and consumers to identify and apply. OTOH, there is a ton of momentum moving us away from everything always being about the Benjamins.
To me, it is relevant to decide how, after years of free-binging, we want to return to the discussion of money. On the plus side, it is one of the easiest ways to measure and transact. OTOH, some people naturally garner gobs of it while equally talented and perhaps more generous others seem unable to get it. That is the part of the formula that is due for tweaking. The usury parts.
I think methods of "opt-in" are a stepping stone. As the creator, do what you want first and foremost, so you and your concerns are met. Let people pay who see value. Flag them in your customer database. Give them perks of some sort. And make no promises to those who are along for the ride, unless they are feeding you in other ways. Because once again, it doesn't always have to be about the money, and that also doesn't mean we have to take money completely off the table.
In my opinion, everything in the world is based on competitive advantage both in the present and in the future. When we get paid by Adsense, we feel we have created value. In actual fact, we haven't.
Adsense hypnotizes us into thinking that by writing a few lines about something and getting a few hits, we really can create value. The truth is that value can be created only if we are able to reduce opportunity cost.
Because we remain hypnotized, we concentrate on our writing rather than on opportunity cost. In the future when opportunity cost does prove to be the only arbiter of value, we would find our competitive advantage lacking all thanks to Adsense.