Quick aside: I’m writing this from a Denver Starbucks. After trying three separate wireless networks, all which had paywalls, I of course managed to find one with excellent signal and no WEP password. This is why paywalls don’t work: we are used to free, we will find free. No matter what.
So, on the topic of trying to charge for something that people can otherwise get for free with just a little extra work, let’s talk pricing models. As it stands, the easiest content to get for free that historically has been paid for in other forms, are music and video files. P2P networks are too powerful to be stopped by lawsuits and corporate muscle (muscle that is getting more and more atrophied by the quarter), and the general Internet-using public has gotten used to the luxury of free media. So, to go back and start charging those same people with micropayments and paywalls is quite difficult (with the exception of iTunes, which made the process of buying music exceptionally easy, enough to siphon off a good portion of music listeners/customers). What to do? make the purchase of a product an incentive-based experience. When I buy an album, and then go and tell 10 of my friends to do the same, that artist and its label (if they even have one) are making money not just from my purchase, but from my promotion. Yet I see no difference in my price whether I tell 1,000 people or just one. What I’m proposing is something like this: I agree to buy an album for X. However, I’m not immediately charged, but instead given a short window of opportunity (a few days, weeks, whatever) to get my friends to buy the same album. For every person who buys the album based off my recommendation, the price I pay decreases a bit. As more people buy off my recommendations, the more my price drops. If I get a certain number of people to buy the album in that time period, my price becomes zero. The object is of course to reward your most loyal customers. Pundits might say that this effectively turns everyone into salesmen, and intentions get all out of wack. But, when you talk about a friend-to-friend recommendation, disingenuous promotions simply don’t hold water.
The difficulty in this system would be tracking who recommended what to who, and verifying that process. But platforms already exist where people recommend things all the time (a la Facebook, Twitter, etc). Build an app on top of them and have the whole process–from communication to transaction–occur within it. With revenues falling off cliffs in all facets of the media business, it couldn’t hurt to at least experiment with models such as this. Cuz I’m sure as hell never going to pay $9.99 to log onto the Internet for 30 minutes…and if everyone starts password protecting, I’d rather learn how to hack WEP than whip out my credit card.
[update: there's a company that does something similar called Popcuts, though its more based around discovering music and store credits rather than rewarding promotion. Still awesome.]
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