Services thinking: disruption through payment
While free is a viable business model for many forms of content, services have typically followed a subscription model. However, there’s an inherent contradiction in this. While services delivered to the home like electricity are in constant use, most services like cable TV or even mobile phones aren’t. Even for the most voracious talkers, sleep happens and therefore it’s unlikely that mobile phone usage accounts for more than 50% of the total. As a result, more than half of what we pay is for time that goes unused.
Of course, the utilities would (and do) argue that the actual costs of use are amortized over the month and therefore we are paying less while we use our phones than we actually should. And while companies like Virgin Mobile have attempted to disrupt this model with pay-as-you-go schemes, they are limited in their ability to offer truly disruptive pricing because they are simply reselling service from one of the major network operators.
However, the picture is entirely different for web services. In the case of services like Linkedin business, or Netflix, or any number of other web services, there is no reason why a subscription model couldn’t be replaced by a pay-as-you-use model. This represents a new market that isn’t free, but is instead cheap.
This isn’t radical thinking, but I think this would dramatically expand the reach and adoption of most web services as well as being a much better business model for Web 2.0 companies to pursue.