consultaglobal

I just read Clyde Smith’s blog on FastCompany. Clyde runs Prohiphop and talks about examples in the music industry involving ad supported free music such as Fergie’s branded tour and Prince’s new CD giveaway in the U.K.

The web has made free services quite popular, whether driven by advertising revenues (e.g. Google) or by the open source spirit (e.g. Linux). What follows is a couple of examples:

“Blyk is the first pan-European ad-funded mobile network. It will offer customers free mobile phone calls and texts in return for receiving advertising on their mobile handsets. For advertisers, Blyk is a superior medium for engaging young consumers in UK. Major brands, including Buena Vista, Coca-Cola, I-play Mobile Gaming, L’Oreal Paris, StepStone and Yell.com mobile have confirmed that they will be among the first advertisers to use the Blyk network when it launches in the UK this summer”. Blyk’s press release: “Orange and Blyk announce MVNO deal”

“OpenBusiness is a platform to share and develop innovative Open Business ideas- entrepreneurial ideas which are built around openness, free services and free access. The two main aims of the project are to build an online resource of innovative business models, ideas and tools, and to publish an OpenBusiness Guidebook”. Creative Commons UK, in equal partnership with Creative Commons South Africa and FGV Law School in Rio de Janeiro, Brazil.

A third option adopted by a number of emerging players focuses on the “freemium” business model:

“Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base”. Fred Wilson’s A VC Blog.

WordPress being one of the examples, a free blogging service offering premium features for a fee. In all cases (ad supported, open source donations, fee based premium services) scalability is key. Public’s interest is first achieved by appealing to everyone’s interest in free products. Once an audience or a community has been profiled, measured and established, success can follow but it is not guaranteed: basic business fundamentals around customer’s expectations and competitiveness remain in place.

José de Francisco Lopez Chicago, 09 July 07

Click here to display my most recent blogs or here for my newsfeed.

This blog’s Long Tail:

• Fellowsource: open for innovation
• The innovation gap 1
• The innovation gap 2
• The innovation gap 3
• The innovation gap 4

References and picture credits:

• The Economist on Internet Radio
• A VC on Freemium and on Free Music
• Clyde Smith on FastCompany
• About Blyk
• Ad Supported Music Central
• Clyde Smith’s blog on FastCompany

Consultaglobal’s Innovation Search Engine