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How Much For Free, How Much For Pay

March 30th, 2010 by Seth Kenvin

Week Of Deep Thoughts Post #2

Today’s deep thoughts in a moment, but first some knee surgery levity. Met a customer this morning who gets surgery on a torn meniscus tomorrow (my op was for new ACL & repairing some femur damage) — best wishes Michael! Anyhow, we arrived at destination simultaneously, from different directions, converging with each of us on crutches. That gets heads in the room turning.

Drawing topic again today from stuff in the small-n news right now. Firm moves being made by big-N News Corp to insist on for-pay journalism on the internet. Closer to our company’s home is the weak commitment and shrinking programming from video content owners for Hulu, despite lots of viewing, is in large part driven by desire to retain capabilities for monetization from viewer pay.  Closer still, as a software company, we face dilemma of maximizing our user base with ability to use our stuff for free versus maximizing revenues by making sure all’s paid for.

Our posture emphasizes for-pay usage, and we prefer maintaining that from the outset of our growth, instead of jeopardizing momentum by switching later. New users can sign up and try the full range of video.Market7 services for free, at decent capacity, but the limitations are set such that usage can’t practically extend beyond doing a single, not-gigantic, video production project. One could argue that by not giving away more during our early existence and maximizing user base we are in fact not optmizing our revenue prospects. We feel differently and think it’s best for start-ups to orient ourselves by intelligently & always understanding how users tangibly value offerings, and to adjust operations with consideration of that.

Lots of people seem to expect News Corp to face some difficult come-uppance  while trying to reverse its own participation in getting consumers to expect news on the Internet for free. That may be a good point. We’re picking a practice of having usage for-pay from the get-go with no switch in model anticipated.

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