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Charging Does Help Yahoo Make A Profit
Meshach writes "The globe and mail has an article about how yahoo is starting to charge for their email service. Payment is not mandatory but if you don't pay you have many restrictions on your accont. It says that while many are angry about the change enough people are paying that it is helping Yahoo rebound from their slump. This seems like a recent trend in e-business." The conventional wisdom around web stuff that's been free, but converts to pay is that "they die off, no one wants to use it anymore etc etc", but I think what people fail to realize is that for many businesses, less people is *just fine*, if those people are paying.
I hope that yahoo! does not have the same lax privacy policy for paying customers as for non-paying customers
I'm curious. What benefits does contributing to Slashdot give? Is it just the tingly feeling of helping them out? Lord knows, it hasn't raised the quality of the editing!
Does anyone still contibute?
None are more hopelessly enslaved than those who falsely believe they are free. Johann Wolfgang von Goethe.
" but I think what people fail to realize is that for many business, less people is *just fine*, if those people are paying. "
Yes, thats the number one thing the dot-com business men and women must understand. You need paying customers in the dot-com industry just like everyone else, volume doesn't help one bit if no one pays anyway.
Does anyone think that this is unusual or unexpected? Many new businesses (whether drug dealers to that toothpicked chicken pushed in your face at the mall) include giving away samples (in yahoo's case email or other net service) and then making a premium version, weaning off the nonpaying, and incrementally trying to add on additional services for more money.
;-)
The problem of going from completely free to charging for the exact same thing is that is ticks off your potential customer base. Therefore the extra's (like Salon or Slashdot's elminating some ads) try to present a 'value added' aspect that makes the rubes reach for their Discover cards.
I'd only be really surprised if that wasn't a "Plan B" from day 1 or if there aren't more of these new billing plans in the future.
I was very concerned about my email address... I had robertb@geocities.com from way before Yahoo! bought out Geocities. But as the spam increased more and more, the geocities.com/yahoo.com address became more and more worthless. The kicker was when some b*stard used my email address as the reply-to on a spam message... first my inbox filled with bounce messages, then with angry messages from recipients and sysadmins.
I changed my reply-to address to the email on my own domain, dixie-chicks.com, and after a few months, all mail from people I cared to hear from was coming to an email address I controlled. The economics are there:
* 12 euros/year (< us$15 even on a bad day) for a domain name from Gandi.net. If all you need is email forwarding, stop here -- they have it.
* 6 bucks/month for a web host like the one I use. Includes no-ad no-popup web space and unlimited web-based email addresses. Not meaning to plug, but they are reliable and cheap.
All together, it's worth $15 a year + $6 a month for a better deal and better service than I'd ever get from Yahoo!.
Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
However, the catch is that free dry attracts the lowlifes. What happens is that seriously selfish moocher-types come in and split up their wash among 10 dryers at once. Other people get pissed off, some possibly because they wanted to pull the same stunt. Sometimes people even get into fights over this. Now the average guy who just wants to do a wash and dry and go home is thinking, screw this place. And he's the customer that the laundromat wanted all along, but now it's left with the worst customers.
So my friend, said, no way am I putting in free dry. The fact is, the lowlifes drive out the good customers. And businesses are very much concerned about keeping the lowlifes away while catering to the paying customers while staying friendly to the honest-but-not-yet-committed customer. It's a delicate balancing act, and businesses that try to extend themselves to attract customers (e.g., free e-mail) can get abused by the moochers, which can seriously affect costs and threaten the business. So when someone says, "you're going to piss off the people who are getting it for free," the answer will be, "if they were just trying to leech off me, then screw 'em. If they're a good customer, they will be willing to pay a reasonable price."
Personally I don't see what the fuss is about. Yahoo are not, whatever the article says, removing anything from existing Yahoo Mail users, but they are creating good reasons for people to switch. I've been saying for a long time I'd be happy to pay money for POP3/IMAP access if it means I don't have to sign up for spam (previously the only other option) and now it's available, I intend to do exactly that.
I really hope they make a success of it. The "Ads fund everything" model, as well as being bankrupt anyway, doesn't suit everyone. It certainly doesn't suit me. I find most TV channels here in the US unwatchable, radio is beginning to go the same way - even NPR devotes an unhealthy amount of time to "Morning edition is underwritten by the..." spots - and a significant number of websites have become unnavigatable and unreadable because of an obsession with overloading them with ads. Tried visiting your local news channel's site of late?
I'm willing to stump up cash. I did it for Salon. I'd love to turn off the ads on Yahoo in general, though - POP3/IMAP access aside - this doesn't appear to do much in that area. But it is a step in the right direction. I hope they make a success of it.
You are not alone. This is not normal. None of this is normal.
Yahoo is right to do this. They provide a service at some expense and have to recoup their costs.
... the more popular the data becomes, the more widedly it is distributed, the more available it becomes, all the while adding no additional cost to the providor. The cost instead is shared in tiny increments by everyone, in a barter system of essentially perfect effeciency.
... for there is nothing preventing a static copy being preserved on your own system, to be reloaded into the net when the old copy expires.
... greed seems to know no reasonable bounds these days, now that we've elevated it to diety status ... but the bar would be very low for hobbiests and enthusiasts to step in and offer a free alternative. Adopting such an architecture would go a long way in keeping the net free, in both senses of the word.
This is true of anyone offering a service. Now, perhaps the costs (e.g. for my own web page, http://expressivefreedom.org) is low enough that the cost is simply donated, but in that sense that cost is recouped from my day job.
The current client server architecture of the web (which BTW stands in start contrast to the underlying peer-to-peer architecture of the internet itself) places almost all of the cost burden on the publisher. The more popular a web site (or email service, or IRC server, or IM servcie, or what have you) the more bandwidth they need to buy, the more servers they need to cluster together, etc. They have no choice but to recoup their costs or stop offering the service, and if advertising is no longer sufficient (costs have outstripped that line of revinue), then customers will start to have to pony up.
But what is often ignored is that there are architectures where the costs are shared and distributed.
USENET was an early implimentation of this (still costly, because ALL the data is copied to ALL of the distributed servers), where everyone doesn't go to ONE server, they go to ONE of THOUSANDS. USENET still carries more data than any single website (even groups.google.com, which is merely an archive, not a stream of information).
FreeNet is a better implimentation, where data which is in demand is replicated to caches closer (in terms of routing metrics) to those wishing to see the data. The originating site bears only the cost of making the inforamtion available (and providing a small portion of their local drive and bandwidth to cache other unrelated data)
Restructure the web on a P2P basis, as FreeNet is doing, and you don't just get the Anonymouty and Uncensorability it was originally designed for, you get the scalability and low cost (regardless of popularity) of participation which the web in its current, client server form, will never enjoy.
FreeNet does dump old information no longer in demand (least popular, oldest first), a la USENET, but that is easily corrected by the one intersted in providing said information
Were Yahoo running on such an architecture, it is likely that their add revinues alone would be more than enough to cover all their costs, and there would be no need to begin charging for their other free services. They might choose to anyway
Unfortunately, there are powerful media interests who do not want to see a world of peers exchanging information, they want to see a new channel by which they can dump their dreck into our minds, while keeping us placidly on the couch where we belong. So, if such a change is going to occur (and with the release of FreeNet 0.5 the software is certainly available and usable), it will have to be because people like us, at the grass roots level, prefer an even playing field to the centralized, "read what we tell you" architecture cable companies, media cartels, Microsoft, and large content providors are tryig to foist upon us instead.
The Future of Human Evolution: Autonomy
Actually thinking about it, one way for Yahoo to increase revenue is to disable the Bulk folder for the free accounts. Only enable it for the pay ones. The worst case for them is just lots of 6mb mailboxes full of spam. If they market it well they could lure people over to the "Spam Free" pay service. I am sure many users would be happy to get away from spam and be willing to pay for it especially if they use the Yahoo account as a primary email location.
Hedley
I once fired 7 customers... and my billable hours went up 35%. Now I was doing about the same amount of work, but was getting 1/3 more money.
Some customers are too expensive to keep if they keep getting a free ride. The 7 in question here kept turning in call backs on things outside the scope of work, and demanding that these items be "fixed" before they would pay for the previous work. Since it's my policy not to bill for work the customer doesn't accept, it was getting too expenseive to let these keep sucking on the tit. So it was Bubh bye for them.
One kept calling back, wanting more work done, and I finally told him that I felt that my competitor could better serve their needs. "But they won't come out to us anymore!" they said. "I won't anymore myself", I said.
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
The client-server model that the "old internet" has relied on is broken. The ad-revenue cycle is destroying quality of service, shutting down many good sites permanently, and we're losing vast quantities of content in the process.
The "old Internet" was funded by government and academic institutions, and commercial activity was forbidden on the backbone. Spam was nonexistent, nobody launched DDoS attacks and few people bothered to forge email addresses, though plenty knew how. Nothing was wrong with the old Internet; it just wasn't mainstream.
The "new Internet" has many more resources online, but we suffer the excesses of commercialism at the same time. Between spam and ad-supported websites, we are bombarded by as much advertising online as in the physical world, if not moreso. And, as in the physical world, we're tired of the constant advertising, and it's losing effectiveness. It's the "new Internet" that's broken, because the advertising business isn't working too well to support most online content.
Maybe it's time we find a way to actually pay for all this content we desire? I'm not sure how best to implement it, but if you were to take the costs involved with providing the most useful services, and divide those costs among the millions upon millions of Internet users, it would probably be fairly cheap on a per-user basis. Maybe it's time for the Internet to find a better way than annoying advertising to sustain itself?
I'm beginning to wonder if marketing isn't a bit like antibiotics -- useful in moderation (to find out about products you didn't know of but would want), but dangerous to overuse (because it generates resistance which makes it become generally lrdd effective), and it doesn't matter if some marketers restrain themselves, because the abusive ones can ruin it for everyone.
I believe the marketing profession has created for itself a Tradegy of the Commons. The incessant advertising on all fronts has lessened the value of all advertising. There's just too much of it. Some marketing is useful to the consumer; if they don't know that a product is out there, they can't buy it, even if they'd like it. Most companies, however, seek to shove their products down the consumers throats with a barrage of advertising. This is counter-productive, and it explains the ever-growing hostility people are beginning to feel towards advertising in general.
I don't see any easy solutions to this, but I have an uneasy feeling that this form of advertising-driven capitalism may be due for a major reckoning, and the results could be ugly...
Deven
"Simple things should be simple, and complex things should be possible." - Alan Kay