The economy is in rough shape these days. Nobody’s job seems secure, and no industry is safe, but the Web is an especially hard place to make a living.
Startups are scrambling with greater urgency than ever to find the cash to keep going – either in the form of investment (despite the fact that VC investing is way down) or through business models that could actually sustain them. Twitter might be exploring both – looking for more funding as rumors fly about how they might employ advertising.
Outside funding is only a stopgap, however, and self-sustaining business models for Internet-based businesses are hard to come by.
The Atlantic Monthly published a widely-discussed piece this month pondering the death of the New York Times, hypothetically before this summer. Many people predict the New York Times will go all-digital at some point because that’s the only way it can hope to survive, but the truth is the New York Times makes more money from its 1 million daily print readers than it does from its 20 million daily web visitors. Again, the web is a tough place to do business.
As a case in point, my Flickr Pro account expired a while back, and I delayed renewing it for months despite the fact that Flickr Pro only costs $24.95 a year. A year. It’s a fantastic service that I use regularly, and it costs a fraction over $2 a month. In the “real” world, this would be a no-brainer.
Just yesterday, for example, I spent $16 to park my car and another $6 for a very mediocre tuna sandwich. That’s what I paid because that’s just what what it costs. I’ve been conditioned to accept the fact that a few hours of parking in San Francisco costs me more than a paperback book, a CD or eight months of Flickr Pro.
Unfortunately, I’ve also been conditioned to believe that everything I do on the Internet should be free. I balk at $24.95 a year for Flickr or $2-3 dollars flat for an obviously killer iPhone app, when I know it’s a steal, when I have no problem dropping that and more on a some coffee I will pee out an hour later.
I can’t think of a single business in the “real” world that basically gives away a product as great as Flickr, Delicious, Evernote, Yelp, Adium (to randomly pick a few) or any of the others that are essential to my digital life, but that’s what we expect online businesses to do.
How did we get here, and is it working?