The Fight For Free Dumb
First off... looks like Facebook backed off their new terms to own all you put on their site.
Meanwhile, some blog banter going on out there on Active Rain's new pathway to revenue.
Seems they are now seeking some cash in new members after seeking it through ads and everything else.
I have always thought it bass ackwards to offer free when at some point you know when the Angels stop their propping up, you will need to show something. Call me crazy and I know thats how they do it in cities with silicon in its name. But it just is not sustainable.
Pat Kitano gives his tips on how Twitter might get some revenue. As Twitter is the most obvious site that you just know is busting at the seems in growth. But it too cannot show any cash. I am not in the VC game, but I can only imagine it a tough go to get any of those folks to open up their purses on 3 to 4 years of negative cash in an era of no credit. Which is about what many of these top of mind sites have been doing.
Limitations of Hosting New Media
The free is what is part of the driver. The attraction.
So why would anyone pay thereafter? Put another way. Many serious folk have been jumping on Facebook and Twitter of late. Wondering what is all the buzz. Would they still do it, if not for free?
I have an alumnus from high school who told me he jumped on FB because it is free and there is no way he would join Classmates. And as someone who has been my high school class reunion coordinator for the ten and twenty year, that frustrates the hell out of me. But human nature is what it is.
Three Ways Out
1. Offer a service to sell.
2. Offer ads
3. Sell the clunker
Inevitably, the way out for most of the free social sites is to first sell the service. Then sell various forms of ads. While the lucky ones sell out for their big payday. Letting the buyer deal with the mess where they usually just strip the technology off the carcass and let the thing die.
I do think the challenge that AR has is that it is a "me too technology". It was unique to the community when it started but it does have its free competition these days with a number of similar 2.0 social communities. (Great world we live in when for profit companies compete to not charge anything ;-).
WordPress MU is a blog cult favorite along with a bunch of free software that implies the promise of running your own Active Rain. OK sure you have community over there. We will see how loyal that is. But it is always hard to go from free to anything paid. The psychology is all off. That's like going from flat fee to a percentage. It is possible, but it is a ton of work.
To make themselves unique, I think they would be much better off by offering a premium blogging system with full and unique IDX integration, and a CMS. This on first pass seems so "me too". However, no one that I know of is actually offering all this on a wide scale(OK maybe that is how we can get more comments in this blog. Here come the offers folks lol). But alas, it may be too late in the game for them to get geared up for that backbone.
At the end of the day, the fee model should have been the start and perhaps the free come later. Many of the premium site template hosters offer this. Alamode and Point2 offered free I believe. But they hold out a large enough perceived value to bump up. And that is in my opinion the challenge that AR faces. And it is only indicative and a peek into the future of the net. As idealism meets economics.
Lessons to the agents. Get your own web presence that is branded. Everything on site and elsewhere serves to create you as the authority for your market and gets your visitors to want to raise their hand to at least hear more of your good stuff. If not actually ask you for your business then and there.
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