Most media companies are struggling mightily as they search for a business model in the web 2.0 world – a problem exasperated by the fact that may web 2.0 companies (Facebook, Twitter) are facing similar struggles themselves. While it’s clear that there is demand for various content and services, how to actually get paid enough to support them is a challenge. Which got me thinking about what these, and other, companies might be able to learn from dating and poker sites.
Why dating and poker you might ask? Well, what I find so interesting about both of them is that the very act of paying to participate in the service being provided (either everyone, or a select group of people) is absolutely crucial to the service being provided. In other words, the free versions are distinctly worse than the pay versions, simply because they are free, even if the rest of the functionality is the same. That’s seems like a compelling business model worth exploring to me – though I suppose I should explain a bit further.
I’m going to gender stereotype a little bit here, but I think most people will agree with it. If you are an attractive female looking for a date, and you post information about this interest along with a picture and other relevant information online, you’ll probably attract a lot of attention. In most cases, I’m betting far, FAR more attention then you could ever want, including a lot of people that you REALLY don’t want attention from, if it’s on (say) a totally “open” website / dating service. But what certain sites have done is simple – make guys pay to send a message to a girl. While often a fairly small amount per message, you can see how it would cut down on troll behavior, unwanted messages, etc. – not entirely of course, but very helpful. From the guys perspective, it not only makes it more likely a woman will post a profile (i.e. value from more selection), it cuts down on competition a bit when your soul mate pops up.
Ergo, a business model pops up as well. In this case, there’s a certain class of people on the site that are likely willing to pay to send a message, and the process of making these people pay increases the value of the service for everyone, including those paying. Might a similar model with a bit of a twist work for media companies, or other industries, somehow?
Then there’s the online poker example. I of course don’t play myself, because it’s illegal and all – but if I did it would probably be on low buy-in tournaments at PokerStars, and just for fun to blow off a little steam every once and awhile. And the reason I, er, would do the buy-in tournaments instead of playing in one of the multitude of free games available is that the free games are terrible – strictly because they’re free. Everything else about them is the same.
You see, Texas Hold ‘Em poker is a pretty simple game to learn, and the fun comes from the procession of bluffs, reads, and other decisions you have to make over the course of the game. But from my experience understanding when people aren’t betting real money, all of this goes out the window – might as well call the all-in bet with 2-7 unsuited on an 2-J-K rainbow board because I COULD still win, and if I don’t I’ll just play again from my infinite pile of free money! For those that don’t do poker-speak, basically the game is ruined when people don’t really care – and it’s amazing how even a little bit of money / skin in the game can either make people care, or only attract the people that do care.
Now that I think of it, fantasy sports are similar in that regard. I play in a few leagues with friends, and we mainly use social pressure to keep people engaged, because if someone starts losing and stops playing it ruins it for everyone – but having a little juice in the pot seems to work a little better. It’s also what makes joining public leagues so frustrating, as plenty of people might start, then quit or get bored – which tends to happen less when money is on the line. Again, in theory given the illegality of it and what have you.
But you get the point by now. There are a few areas of the online economy where making people pay money makes it a better “collaborative”experience for everyone. Thus, I’m wondering if there’s other places online where similar principles could be put into action in order to conjure up a Web 2.0 business model. And I have a hunch there’s something about communities and conversations on media properties that might fit the bill – which I alluded to a little bit last time from a slightly different angle.
{ 1 comment… read it below or add one }
I was surprised, that you are so writh your analisys about opker and dating sites… it’s the quality that the client will have “to pay”.
Great article