{"id":12307,"date":"2012-08-17T05:23:06","date_gmt":"2012-08-17T12:23:06","guid":{"rendered":"http:\/\/www.web-strategist.com\/blog\/?p=12307"},"modified":"2012-08-21T06:36:40","modified_gmt":"2012-08-21T13:36:40","slug":"social-networks-premium-vs-freemium","status":"publish","type":"post","link":"https:\/\/web-strategist.com\/blog\/2012\/08\/17\/social-networks-premium-vs-freemium\/","title":{"rendered":"Social Networks: Premium vs Freemium"},"content":{"rendered":"

<\/a><\/p>\n

Screenshot of App.net shows a bare bones microblogging platform<\/p>\n

So why does App.net have an uphill battle to reach mass market? I’d argue that while niche premium social networks may emerge, however they’ll only serve a small market. The majority of the addressable mass market is already accustomed to advertising in other media channels, so being exposed to highly relevant ads in will be worth the . The other option, is to head the Wikipedia business model way, and depend on revenue injections from other parties, or raised funds on a donation based model as we see Jimmy Wales compelling ads requesting donations.<\/p>\n

So why did I give my $50 commitment to App.net despite the massive uphill challenges they’ll face? Well, for three reasons: 1) It’s my job as a research analyst to know the market which I cover 2) Selfishly, I wanted to secure my user name jowyang (just as I have on Twitter) and 3) I’m interested in seeing if crowd funding models can work –despite the concern over Kickstarter scams<\/a>.<\/p>\n

Matrix: Comparison of Premium vs Freemium Social Networks<\/strong><\/center><\/p>\n\n\n\n\n\n\n\n\n
<\/td>\nPremium (App.net)<\/strong><\/td>\nFreemium (Facebook, Twitter)<\/strong><\/td>\n<\/tr>\n
Business Model<\/td>\nUsers pay up front, in the case of App.net, $50 for a year of service, site is funded by users<\/td>\nFree tools available to any who agree to Terms of Service, such as Google+, Twitter, Facebook. Business model often includes marketing, advertising, donations.<\/td>\n<\/tr>\n
Data Usage<\/td>\nAs paying customers, data is controlled and managed by users, developers, and owners. Users able to export data at any time via download feature.<\/td>\nTerms of service often indicate the data can be used by social network and is owned by social network.<\/td>\n<\/tr>\n
Governance<\/td>\nManaged by website owners, not clear if customer council, app developers may have upfront info on API changes.<\/td>\nRoadmap defined by social network, developers, brands, and users at mercy of changes, often without advance notice.<\/td>\n<\/tr>\n
User Experience<\/td>\nAdvertising free experience, with focus on social and engagement features.<\/td>\nAd rich experience, including marketing and advertising directly in social stream. In the case of G+ it supports Search business model and remains ad free.<\/td>\n<\/tr>\n
Market Type<\/td>\nAt this time, early adopters, first world technologists. May incline towards disposable income and influentials<\/td>\nMass market, global.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\nWhen it comes to social networks like Facebook and twitter, we should all remember that these are free global communication tools, and nothing comes without a price, including seeing marketed content. When it comes to new business models that are advertisement free, we should also remember, you either pay now, or pay later, to use these tools.<\/p>\n

So users and developers of social networks (whether premium or freemium) should recognized you’ll pay now, or pay later, you always<\/em> pay.<\/p>\n

Update: Well that didn’t take long, here’s the parody site<\/a>. There’s more discussion on my G+ feed on this<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[191,50],"tags":[],"class_list":["post-12307","post","type-post","status-publish","format-standard","hentry","category-business-models","category-social-networking"],"_links":{"self":[{"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/posts\/12307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/comments?post=12307"}],"version-history":[{"count":0,"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/posts\/12307\/revisions"}],"wp:attachment":[{"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/media?parent=12307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/categories?post=12307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/web-strategist.com\/blog\/wp-json\/wp\/v2\/tags?post=12307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}