Everyday, it seems to dawn on me more and more how many choices Elastic Illusion and Learn2Breakdance face in terms of vectors. Meaning, what direction do we want to head in. What direction is the internet heading in. What direction is the world heading in. It seems like making the right choices is pretty important, because while we can change course fairly easily, if we make the right choices the first time, it will make everything else a lot easier.
The choices really come down to pricing and grouping. At first, I had thought we would basically release a variety of online DVDs for a variety of subjects and charge DVD prices for them. Then the idea of monthly memberships came into being. Then the idea of combining the subjects and charging a flat rate. Then the idea of combining the subjects and charging the same price for all of them that we had planned on charging for each of them. Now, a new idea is to give them all away and insert 10-second advertising in front of each clip and make the money off of ads.
Each of these approaches has pros and cons. Beginning at the end, as is my style, if we give everything away, we are sure to drive a lot more traffic to the site. If implemented in a way that encouraged users to create profiles on our site, this could create a great deal of stickiness. In other words, we could be *the* site on the internet for breakdance instruction. We could then build the empire from there. The downside to this is that advertising may be hard to come by, and we may go into the pattern of losing money for the foreseeable future in the hopes of making it back later, due to our being *the* breakdance site on the internet.
For the paid approaches, they each have their benefits. Discounting the whole package, where we would give access to all of the subjects for $30 or so, could really come across as a huge bargain and could potentially create a volume greater than separating the subjects and charging $30 for each of them. This is hard to know, but I tend to think that it is a better strategy in this internet age. Charging a monthly fee has the upside of not requiring any advertising and of locking in users in a way that they get used to paying for us, and we end up receving money from them each month. The upside of this is also that we can encourage referrals by discounting the price for those who are strong referrers. The downside of course is that many people will simply walk on by, due to the fact that they are used to getting something for nothing on the internet.
I think the dilemma we face is the dilemma of the e-entrepreneur circa 2006. To charge or not to charge. Our situation is slightly different though, considering the content is something that people really are used to paying for. It might be foolish to not cash in on this existing perception, or it might be short-sighted to cash in, rather than give now and reap huge ad revenue later.
At this point, I don’t have any answers and would love to receive any sort of feedback (just getting used to writing like this has any sort of audience lol!). In any case, it is quite possible that the decision may be made for me, if it begins to become standard that ads are placed in front of videos.
I certainly forgot to mention another upside of the ad revenue approach. The demographic that a site focused on breakdancing instructionals would appeal to–namely, young males who tend to be fashion-forward trendsetters–is probably the most coveted demographic for advertisers like Red Bull, Nike, and Apple. This is not to be underestimated. On the other hand, maybe it would be nice to be untainted by a perception of having “sold out” to the advertisers. It is possible though that on the internet, a company like Nike could advertise with a site that actively questions Nike’s business practices (like sweatshops) simply because they think the demographics the site reaches are important.
It’s a strange new world, that much is for sure.
[edit: 5 minutes later. A new idea already came to me. We could show the entire site to unsubscribed users, with 10-15 second truncated clips of everything you would see (hosted on google video to save on hosting) as a member. Some of the clips would be full, and it would certainly be enough to see what you are missing, but annoying enough that it would make you say "damn it, I'll pay the money already." I like this idea, but I said that about all the others 5 minutes ago lol!]
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