$5 a year is a ridiculously low income when compared to advertising. I seriously doubt google would still be around if they had tried to charge users to search the web. Altavista wasn't that bad.
I'm simply pointing out that some services don't really work too well as a 'paid' model.
Also you've got the fact that some of your competition is going to be free. If you want to now charge users directly, you have to be at least 10 times as good, or be offering something seriously different to make them pay.
I'm still firmly in the freemium camp.
1. Make something, get people to use it
2. Grow, make profit from advertising (Stay lean, keep costs low)
3. Once you're big enough, some subset of your users will be willing to pay for extra features
If you instead go for paid only, I don't think you can reach anywhere near the same audience.
Google has over 128MM users. Assume Google just gets the "really amazing product" conversation rate of 10%; at $5/year, that's a recurring revenue stream of $64MM/yr, at the lowest conceivable price point you can come up with for a good product.
"But $64MM is fuck-all compared to the billions it makes now!" Of course that's true, but that's besides the point. Almost any product company number is going to suck compared to what Google can post now. I'm not arguing that Google should be a free service. I'm saying they had options, and it wasn't necessarily between "free or die".
You're being a message board geek, axod. If you have to pick your poison, and it's signing up for recurring credit card charge versus using Altavista instead of Google, I already know what your answer is. Google didn't have to be free; they chose to be, because given a spectacular product, they had spectacular freedom to find the best way to make money.
Hmm do you think they would have gotten so big if they hadn't been free from the start?
How would they have got the message out that they are better? Free trials? :/
Things that are "paid only" don't seem to scale quite as well.
Of course if/when a decent micropayment model emerges from ISPs, then it'll likely change everything.
I'm simply pointing out that some services don't really work too well as a 'paid' model.
Also you've got the fact that some of your competition is going to be free. If you want to now charge users directly, you have to be at least 10 times as good, or be offering something seriously different to make them pay.
I'm still firmly in the freemium camp.
1. Make something, get people to use it
2. Grow, make profit from advertising (Stay lean, keep costs low)
3. Once you're big enough, some subset of your users will be willing to pay for extra features
If you instead go for paid only, I don't think you can reach anywhere near the same audience.