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MPFree.com - the Agony of Advertising Business Models

Here’s one that rolled across my inbox - MPFree.com. Its a pay-per-action advertising conduit where members trade accept offers and jump through advertiser hoops to earn free downloads from a claimed library of 750,000 tracks. So - MPFree is one of those weird intermediaries that tries to link a popular whatever-it-is with achieving a consumer action of some sort - another spin on the age old “free iPod” story. The cringing mascot from the MPFree front page summarizes my thinking on these types service: its well worth 99 cents to skip all of this and just get music on your own terms.

The “offers” are all action oriented, and range from the innocuous and humorous…

To the more mysterious and weird…

To the very insistent:

I didn’t get far enough into this to actually qualify to download anything. But the front page claims “Save it or Burn It” - which suggests some DRM-addled file type anyway.

Every advertiser is looking for an edge, but I just can’t imagine that conversions achieved by this method are getting advertisers “quality” customers. Who wants free music downloads anyway? Kids - that’s who. Are kids really interested in help with their sleeping disorders? What does a service like this achieve, other than temporarily inflating membership numbers for advertisers?

Anyway, its funny the regularity with which this business model shows up.

download, free, mp3, mpfree, music, p2p yarrrgh

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SwitchPlanet.com: Free Media Trading with a Conscience

SwitchPlanet.com is a new entrant into the busy “trade your stuff that your done with” market dominated by Peerflix, Zunafish, and Craigslist. SwitchPlanet taps the Amazon Ecommerce webservice for product information, and allows for the trading of DVD’s, games, CD’s, and books.

SwitchPlanet.com, a Fresno based internet trading platform aims not only to succeed in business, but also help society and the environment. The company’s mission is simple, “establish a premier online community that is committed to helping reduce the impact waste is having on the planet by trading the things we no longer use to get the things we want.” [from PRNewsNow]

SwitchPlanet, according to the founder/developer/owner Chris Samarin went live at the end of Feb. ‘07, and since then has signed up ~6,500 users. For the first 22 days of April, SwitchPlanet had successfully completed 2,000 trades, with 1,000 more in progress.

Free Trades and a Social Agenda

SwitchPlanet differentiates itself by offering free trades coupled with a charity component: instead of paying for trades, users can opt to donate any amount whenever they trade (or zero) to SwitchFunds - a donation fund that is regularly gifted to a number of charities. This social agenda, combined with the “green” element of trading instead of purchasing, has garnered SwitchPlanet some very positive press at sites like Sustainablog, TreeHugger, and GroovyGreen. Chris seems legitimately committed to doing some good with his venture:

Members have already stated they love the option and will have no problem making small donations when they can; especially if they keep receiving cool stuff for free. Every little bit counts so if we could get 1 million members donating $1 a month that would be pretty amazing. If we got $1,000 a month that would be great too but obviously the goal is to grow this thing as big as possible so the impact is HUGE. [from GroovyGreen]

…and so do SwitchPlanet members, who since launch have donated $1,500.

Insulating Users from Risk

As with many other sites, SwitchPlanet uses a proxy currency - “SwitchBucs” for actual trading. When you add a movie/book/whatever that you have, you set its price in SwitchBucs, which are credited to your account when you successfully send it away. Similarly, when you “buy” something, you use SwitchBucs in your account, or top off your account by purchasing SwitchBucs (1:1 USD). SwitchPlanet guarantees switches - refunds can be issued to buyers for items not sent, and to senders for items lost in the mail, and so on: SwitchPlanet has anticipated one of the primary barriers to utilization (the uncertainty of trading with a stranger) and eliminated it.

The use of SwitchBucs, a damaged/counterfeit disc banning policy, and the guarantee are all designed to make SwitchPlanet a comfortable and risk-free place to trade.

We offer a 100% Satisfaction Guarantee so if a member receives a broken, unplayable, scratched, wrong, counterfeit or no disc at all they can submit a claim to SwitchDiscs and receive a full refund. If a member is repeatedly involved in sending bad discs or is repeatedly involved in making false disc claims then their account will be terminated. There are many factors involved so each account would be reviewed thoroughly before termination. [from GameShark]

SwitchPlanet adds a layer of reputation security as well, adding an eBay-style member rating and commenting system to the site which allows for the evaluation of potential trading partners:

Business Model

In an interview with GameShark, Chris detailed three components in the SwitchPlanet business plan:

1. Amazon Affiliate Sales: Each disc listed on the site includes the option to buy new. I quickly found that given the 1:1 USD:SwitchBucs exchange and people’s bizarre listing expectations, Amazon was often more cost effective that trading or buying. See more on this in the suggestions below.
2. Advertising: SwitchPlanet has a tasteful AdSense deployment in place already. IMHO, particularly with the environmental and social agenda angle, there’s a better opportunity for woot-style sponsorships (see below).
3. SwitchBuc purchases: As mentioned members can purchase SwitchBucs to start getting discs without having sent any, or to top up their account. Chris indicates, however, that revenue from this stream will be used to fund the purchase of more media to seed the network.

Suggestions

1. A “Suggested Price” feature: When adding discs, it would be great if SwitchPlanet made use of the extensive pricing information that Amazon’s API can surface to suggest a price for a given disc. Amazon will surface, best, new, and used prices; SwitchPlanet could suggest a range between best-used price and new for members to price their discs in depending on condition and whether they are shipping with packaging, etc. Checkout that first screencap above with FlyBoys at 29 SwitchBucs - that’s twice Amazon’s regular price.
2. Site Sponsorship Ad Model: Instead of AdSense, in the long term, SwitchPlanet may wish to sell weekly or monthly site sponsorships. i.e.: charge a flat rate for exclusive placement on the site, in a subtle-yet-always-visible placement format. Woot does this well. Creating a subtle AdSense placement that doesn’t clutter up the site means that ads will get few clickthroughs; the sponsorship model would offer more for SwitchPlanet, advertisers, and members. SwitchPlanet’s unique environmental and socially aware value proposition also makes the site well suited for this type of ad model - the strong brand associations and specific psychographic member profile create a powerful branding environment for companies trying to target the “green” demographic - auto-manufacturers, Whole Foods, etc etc. SwitchPlanet could also be marketed to movie studios, book publishers, and so on. Note - this is a longer term suggestion, once traffic is high enough to back up sales of this type. In the meantime, I’m sure AdSense is good bridge.
3. Social Networking: In a few interviews, Chris has stated his intention of developing the social networking aspect of SwitchPlanet further. I’m not convinced this is a good idea - to my thinking, it dilutes the key brand elements of SwitchPlanet, adding confusion to the switching concept, and positions SwitchPlanet as a competitor against sites which dwarf it. I agree that there’s a place for social networking in the trading-sites space (finding new trading partners, creating interest groups, etc.), but those elements need to be added in support of the site’s core value proposition, not as competitor to it.
4. Localization: Back when I was working on BlockRocker.com, my original intent was to create a hyper-local trading site, such that you could trade with people within walking distance - cutting the greenhouse gas emissions from shipping media back & forth across the country, when copies were likely gathering dust in shelves down the street. Localization, provided that there was a means to protect privacy while still enabling trades would be another great source of differentiation, and really get the green blogosphere going.

Summary

I believe SwitchPlanet offers a quality implementation of a business plan that has merit, and that while the market may have several players in it already, there is room for more. SwitchPlanet goes a step beyond being a credible competitor by adding a differentiating agenda, free listings, and a social element - all good ways to drive adoption and differentiate from the competition.

I’m looking forward to seeing SwitchPlanet continue to grow and evolve, and will be following Chris’s progress.

For other good coverage of SwitchPlanet, take a look at Bob Caswell on Computers.net and PlayWii (which actually has completed switches).

craigslist, p2p, peer2peer, peerflix, swapping, switchplanet, trading zunafish

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VuDu - will this set-top box deliver more than buzz?

The blogosphere is predictably abuzz about VuDu - darkhorse set top instant movie purchase box. NYT dropped the story first, Giz had first UI and hardware pics, and Engadget’s got comprehensive coverage from the top of the pile on Techmeme.

Somewhere in that mass of coverage, I read the thought that I think will sum up the un-appeal of the concept for many: paying $300 for a set top device to have the privilege of paying $6-10 more for movies is a long stretch. Especially when you find out that movies are stuck on the VuDu box and can’t be transferred to your iPod, DVD burner, or anywhere else. In fact, VuDu seems to be about as weak a value proposition as the original crippleware divx disc format. Lots of hype, major studio support, DRM all over, and expensive - sounds like exactly the sort of system that the status-quo players wish would dominate the market.

AppleTV and the XBox360 enable much the same sort of transaction; but in their cases, that business model is buried in a tonne of other value-added functionality that empowers users. In the “battle for the living room,” Apple and Microsoft are taking a tactful, user-centric (though by no means perfect) approach, while VuDu is taking a ham-fisted, compromised flailing swing at it in the clueless style of the RIAA and MPAA.

Yes, I am biased against crippled functionality models like this, and no, I don’t know all of the details, so who knows - I could be embarrassingly wrong. Engadget seems to have come to a similar conclusion though, Mathew Ingram seems to agree, NewTeeVee’s quotes David Zatz’s assessment that Vudu will go the way of Akimbo or MovieBeam - nowhere fast. Paul Stamatiou asks a lot of intelligent questions about pricing and control structure, well Rex Dixon sounds reservedly optimistic.

As for myself, I’ll go on record as having the opinion that this has too many big studio business paw prints on it to take off.

akimbo, apple, appletv, downloads, moviebeam, p2p, video vudu

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CastTV - is there room between verticals and gootube?

I got into a little back and forth on Mike’s post on TechCrunch about CastTV (see the original TechCrunch CastTV post too). CastTV is a video search engine - indexing video from top video sites (YouTube, etc, etc), as well as across the Internet.

CastTV brings some unique twists to the table with their indexing system - it accumulates index data about a video across the internet, for instance - i.e.: if the video is posted in 15 different places, CastTV will treat the video as a single, indexed entity, with fifteen logical locations, as opposed to 15 different entities with different keywords, etc. According to TechCrunch, CastTV also allows for comparison shopping between download sites.

Anyway - my basic conjecture is that CastTV is another Riya - a cool technology in search of a business in a hype-heavy segment. Riya went from a buzz superstar facial recognition technology powerhouse to a marginal “visual search” tool (at Like.com) that let’s you search the internet for handbags you might like or rugs with nice patterns.

My conjecture is based on the fact that between YouTube/GVid and iTunes, most video on the web is well indexed, and keyword, tag, and genre searches, as well as social recommendations, meet most everyone’s search needs. Perhaps if the user-submitted video market becomes more fragmented over time (with an ascendant MySpace video or Photobucket), there may be a case for CastTV. Similarly, if CastTV wanted to delve into the grey market waters of torrents and P2P, it might have more appeal. But as a largely meta-search engine for the top video sites, I question why I would go to CastTV instead of the site where I know CastTV is going to return its listings from anyway.

My other thought is that the specialized searches for which CastTV will have the most appeal will be better executed by vertical sites such as SuTree.com that specialize in a particular video niche.

So - for mainstream searches, I’m seeing CastTV as redundant, and for specialized searches, I see it outgunned by dedicated vertical sites. That being said, I’m very willing to be proven wrong, and happily requested a preview invitation. The other suggestion I made in the TechCrunch comment thread was that CastTV deploy its unique indexing technology elsewhere - using the cross-internet-meta-index for keywords and phrases would at the very least provide a hype alternative to Powerset for the google-pundits.

Note: Here’s what I mean about being proven wrong. Maybe Like.com and the Riya team are finding their footing?

bittorrent, casttv, google, like, p2p, powerset, riya, techcrunch, video, visualsearch youtube

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