Wednesday, Nov 02, 2005 12:32:32 PM
Revenue Sharing with Your Customers
While reading this article, which took me to a blog posting on 37signals.com, which finally brought me to the source of an interesting discussion by Anil Dash.
were discussing how Flickr.com makes a fair amount of money from the ad
sales on it's site, and brings up that the revenue stream should be
shared with the users, as it's their content that drives the traffic,
Here's a quote:
But interestingness in Flickr doesn’t pay. At least not yet. Non-pro
users are seeing ads around my photos, but Yahoo’s not sharing the
wealth with me, even though I’ve created a draw. Flickr’s plenty open,
they’re doing the right thing by any measure of the web as we saw it a
year ago, or two years ago. Today, though, openness around value
exchange is as important as openness around data exchange. - Anil Dash
Jason, over at 37signals had this to say:
The shift that is going on is pretty radical, actually. The way it used
to work was this: You took a photo, someone used it (to make whatever
they’re doing better), and you got paid for it. They paid you for your
talent. Now, hundreds of thousands of people are taking photos,
uploading them to a site like Flickr, making Flickr better, and Yahoo
is reaping the financial rewards, not the photographers. That’s a
pretty big shift. Yahoo is making money off the backs of the collective
camera. - Jason Fried
After reading these posts, revenue sharing not only sounds like the right thing to do, it also sounds like a competitive factor that we shall start seeing more of.
What's there to loose? You have to figure, if your customers are able to make money from your service, that they will be more motivated to use it, and tell others about it. If you your customers see you as a partner, the relationship between service provider and user grows. One of the first thoughts that you might have against this, is the potential for so much revenue to be "lost" to the user. Well, that all depends on how you structure your business model, and if you offer account upgrades, what that rate is per year. Maybe sharing the revenue will be the best thing you can do as a Web service.
As I thought about this more, I realized that it would be impossible for me as an individual to share ad revenue with 10,000 people - that would be accounting hell. My only option, is to not share revenue with my users. Instead, I'm just going to empower them, as that IS one of the core themes at ArtistServer.com - to empower people.
Great, but what does "empower people" translate to? It means that artists will have the option to input their own Google AdSense Client ID which will get used to display the ads on their pages. If you do not have your own AdSense account - apply for one.
If you have an upgraded account on ArtistServer.com, you would also be able to turn the ads off, or select to display your own ads instead. While it might sound a bit tricky, the new Ad Settings tool makes it easy to set up.
When will this new opportunity become available to artists and members? Very soon! I'm maybe a few days away from launching the new version of the My Account Area and will also launch the Google AdSense services at the same time.
Before you get too excited, I'll include that ArtistServer.com currently does not make too much from Google AdSense, but that I'm seeing a steady increase over time.
Last bit of info on the subject... what I like most about this, is that it would allow an artist to fund their account upgrade. You have to figure, that if you join the site, upload some good music, and add your Google AdSense ID, that in a year, you should be able to make at least the cost of your account back, which would come to about $0.10 per day.
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