Bobby Tulsiani [Posted by Bobby Tulsiani]

Chris Anderson has penned an article for the Wall Street
Journal today, “The Economics of Giving It Away.” Anderson, who was the author of the Long
Tail, has been a popular voice in tech circles promoting the virtues of “Freemium”
business models. In today’s article, Anderson acknowledges that the macro economic conditions have put more pressure on the
paid side (the “mium”) of the model than ever before:

“But it does mean that Free is not enough. It also has to be
matched with Paid… Free may be the best price, but it can’t be the only one.”

Last winter, my colleague Sarah Rotman Epps and I both wrote
about the prospects and forecasts for paid content online. In my report, I wanted to dive in and explore
what value propositions people actually will pay a “premium” for. After all, people have been paying a premium
price for goods for years and we can learn from that. Coke and Pepsi don’t sell sugar water, they
sell “refreshment.” The local gas station dosen’t sell groceries, it sells “convenience."

We know Match.com isn’t selling subscriptions, it is selling
“love” and we know The Ladders.com isn’t selling job listings; it is selling “your
career”. Both of those seem like things
people will pay for – online or offline. In my report, I developed a framework mapping such value propositions to
paid products that I think may be useful to many of our clients.  As always, I would welcome the opportunity to hear case
studies where you have developed such value propositions or feedback on our
current framework.