13 Feb 2014

Take my money!

The free web curse must come to an end. There is a price on everything we use and consume, why wouldn’t that be true for the web.

I have had this discussion over and over with a lot of people in our industry: a lot of what we see as problems in it (tracking, monopolies, lack of innovation…) currently derives from the fact that we collectively assume that everything on the web should be free. As much as I am convinced that there needs to be a free experience on the web, I am also convinced that there is a growing room for a paid experience on most services we use. I also believe that this would bring a lot of good outcomes.

Would you pay the price?

The first question that comes to mind, is “how much would that cost?” to pay for Google Search, for Facebook, for Twitter, or for Firefox.

Many people I asked assume that this price would be outrageous and this is the reason why most people don’t pay. It’s hard to guess the price in a market economy with no supply, but we can assess what this services make per user with their current ad-supported models. There is obviously some math involved, but it’s a common calculation. Using the Twitter IPO fillings, Ritchie King and Zachary M. Seward came up with… $0.55 per active and per month on Twitter. Business Insider did more math for the most popular services and the numbers are much much lower than you’d expect.

If you paid Google for what they make with ads, you’d pay about $10 per month and that would probably be the most expensive service to pay for.

Now, would you pay for it? I would. Maybe 3 times that. But it’s probably legit to wonder if non-nerds would pay for it. This is probably hard to assess in details, but I just to highlight that CandyCrush seems to generate about $800,000 daily from its 8M active users. That’s about $3 per month per user… for a casual game.

It’s obvious that not everyone will pay, but it’s probably safe to assume that some people will pay, especially if the counterparty is an ad-free, tracking free and generally faster experience for them.