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The Bucks Start Here

A while back I had the opportunity to meet Josh Hallett at the Orlando airport, and as part of our discussion on services like, Flickr and the like, we got to talking about the economic models for such services and what people would actually pay for, versus expect for free. I won’t presume to speak for Josh on the subject, but my own feeling is that people will in general pay for services they find useful, as long as they’re comfortably out in front of free alternatives (just like the software biz, in fact). I think the dot com collapse necessarily drove home the fact that at some point along the line, someone has to pay directly or indirectly. The question is how, when, and how much?

This question is one I’ve pondering a fair amount recently. For example, it’s a question I discussed when I met with the guys from FeedloungeAlex and Scott – over the past few weeks, because while they’re fully committed to having a free version of their very cool Ajaxian feed reader (still in private Alpha), they’ll be adding more advanced, for pay features as well. All I can say is sign me up.

One might reasonably ask why I’d pay for a service like Feedlounge when I’ve been happily using the admittedly far less sophisticated but to date free Bloglines, and my answer is simple: I’ll pay to encourage innovation where it benefits me. This is just my personal view, but I do not view purchases as a simple exercise of purchasing services at the lowest cost (for the record, I do recognize that this is as much an indication of my socio-economic standing as anything else, and that not everyone can afford to take such a stance – which is perfectly understandable). For me, it’s a much more complicated equation of cost and tangential factors like rewarding innovation or convenience.

For example, when I lived back in Maine there was a General Store about a half mile from my house and a Wal-Mart about 20 miles away. If I’m buying strictly by economics, I’m going to be shopping at Wal-Mart, because everything is about half the price of the general store. But consider Kant’s Categorical Imperative, which roughly states that an action’s relative virtue should not be judged on as an isolated, individual basis, but as if everyone in society did exactly the same thing – i.e. one person littering is not a big deal; a thousand people littering is. In that way, should I view my purchases strictly as an economic transaction, or should I take into account behaviours outside my own, knowing that if everyone behaved that way, the General Store would have no customers and thus go out of business? As you might guess, I lean towards the latter. While living there, I tried to push as many dollars as possible the way of the General Store because along with the actual items I’m buying, I’m purchasing something just as important to me: convenience. That is, if the General Store were to go out of business and I just needed a can opener, I’d have to drive 20 miles to get it. Not convenient.

In similar fashion, I’ve done my best all along to reward economically those services I found to be of benefit to me personally, irrespective of whether they brought me higher levels of service or not. I was an early subscriber to Flickr not because they gave me a bigger upload quota – I don’t take enough pictures for it to matter (or at least I didn’t then) – but because I liked the service, and like the General Store I wanted to see them continue as a going concern. I’m a monthly subscriber to Audioscrobbler for much the same reason; I get no tangible benefits from subscribing, but I’d like to see them stick around. As soon as Feedburner offered a paid option, I signed up, and if was to ask for cash, I’d pay for that too. In all of these examples, what am I buying, besides services? Innovation.[1]

Anyhow, this is all a very long winded way of saying that, for me personally, the bucks have to start somewhere, so why not here? Whether that mindset is prevalent enough to sustain a new generation of lightweight micropayment type services – at least long enough to get bought out – remains to be seen, but I’ll be kicking in along the way. I don’t view this behavior as altruistic or charitable, but rather a purchase of things other than the service provided. My apologies if this all comes across as “holier than thou,” because such was not my intent. I’m merely trying to understand the purchase rationale for these types of services better than I do now, because it’s important for me to understand the drivers behind pumping out new services.

At any rate, I expect to be a paying customer of Feedlounge when they go live, and hope that other developers feel there’s enough economic incentive out there to continue driving innovations that make me more productive, entertained, or connected.

[1] While I’d argue that all of the mentioned services represent innovations of some form or another, it’s interesting to speculate on how my impressions of their respective innovations have been affected by their respective abilities to foster communities around their services, thus augmenting objective impressions of the services with subjective ones.

Categories: Trends & Observations.

  • Josh Hallett

    Go ahead, speak for me. You said it well.

    Regarding your statement:
    As soon as Feedburner offered a paid option, I signed up, and if was to ask for cash, I’d pay for that too. In all of these examples, what am I buying, besides services? Innovation.[1]

    I agree, I also signed up for FeedBurner’s paid option. I will also add one other element, I also feel like I am paying for past usage.

    On the subject of newsreaders I have always been a NetNewsWire user and paid for the app well before my trial was up. I have never been a huge fan of Bloglines. The interface and controls were just too rough. I’ll take a look at FeedLounge though.

  • Bill Higgins

    I’m with you too; well said.

    This essay will be a good one to point people at when I see them using a shareware version of Winzip for the 887th day!

  • sogrady

    Josh: agreed. one thing i believe lots of people would pay for – and have told any number of folks this, the feedburner guys included – is better synchronization. i prefer the experience of offline readers, but can’t restrict myself to a single client. it’s just not gonna happen, hence my usual reliance on bloglines – it’s primitive UI notwithstanding.

    Bill: hahaha – great example. i’ve never thought of it that way, and truth be known i don’t remember every paying for WinZip. so much for my claims :)

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