FairPay Application/Market Segments
(Working Paper in progress) The
following is a work-in-progress that seeks to catalog an overview of major market
segments in which FairPay is readily applicable, with some notes as to the
various forms it might take. Initial emphasis is on digital media
content and services.
Digital Powers Some
large companies have a broad digital media presence that spans multiple
market segments. Such firms might build a FairPay platform for their
own use, and for use by others, having rich and varied features. Some
of these business are now free, some are paid.
(See blog posts listed by segment below.)
Examples:
Amazon -- Store, Affiliates, Payments
Google -- YouTube, Editions, Newspass (rumored content sales platform),
Checkout
Apple -- iTunes Store
News Corp -- MySpace, Wall Street Journal, Hulu, Fox, ...
Newpapers, Magazines, other editorial
These are mainly text-oriented publishers, with
ancillary images and video. Most are currently free (typically
ad-supported), but seeking to
move to paid models. Some charge now. Some avoid posting content
online for fear of losing print revenue.
See Blog post for further discussion.
Examples:
The New York Times (moving to a free+paid model in 2010)
The Wall Street Journal (paid subscription)
Journalism Online platform (free+paid infrastructure for newspapers)
CondeNast Digital (family of magazines, some content free, some not online)
Video
These range from major Internet video sites like
YouTube and Hulu, to specialty sites, to other providers like cable TV
services (with both cable and Internet distribution). Most are
currently free (typically ad-supported), but seeking to move to paid models.
Some charge now.
See Blog post for further discussion.
Examples:
YouTube (Google) (free)
Hulu (free plus paid)
Netflix (paid)
Time Warner
Sony
Disney
Yahoo
AOL Music
Music was perhaps the first content business
face the creative destruction of digital media on large scale, and the
industry continues to seek better business models and pricing models (and
contain rampant piracy).
Bands like Radiohead have gone on their own with PWYW pricing experiments,
with modest success. FairPay could transform how music is sold by
labels, and other aggregators, and by artists, possibly through shared indie
distribution services.
See Blog posts for further discussion:
Games and Music,
Indie Content Producers.
Examples:
Distributors/Aggregators (iTunes, Amazon, Rhapsody, Pandora, ...)
Studios
Artists Games
Much like music, digital games are also
struggling with pricing and piracy, and have experimented with PWYW. FairPay
could transform how games are sold by distributors, and other aggregators,
and by developers, possibly through shared indie distribution services.
See Blog posts for further discussion:
Games and Music,
Indie Content Producers.
E-books
E-book pricing and business models have been a
subject of continuing contention between distributors, publishers and
authors. FairPay could transform this industry, by making pricing more
flexible, and changing competition from price-based to service/feature based.
See Blog post for further discussion.
Examples:
Distributors/Aggregators (Amazon, B&N, iTunes, Sony, Google, ...)
Publishers
Authors
Software and Apps
Software and "Apps" have long struggled with
free, paid, and piracy, and have used a cousin of PWYW, Pay-If-You-Want
(shareware, which has a pre-set but voluntary price) with modest success.
The emergence of App Stores has added a new level of
aggregator/distributor and made free an even stronger force. FairPay
could support reasonable revenue generation, while offering the low purchase
barriers of free and shareware, and FairPay reputations could be collected
and applied across an App Store.
See Blog post for further discussion (App Store example).
Examples:
Apps/Widgets (Apple, Google, Verizon, Yahoo, ...)
PC software packages
Shareware/Open source
Software as a Service (SaaS) Other
services, including Non-profits / Charities
Many Web (and non-Web) services are free, and supported by ads
or are non-profits supported by donations, and many use freemium models.
FairPay is especially well-suited to non-profits, as a way to link
"donations" to value received by users (combined with ability/willingness to
pay). FairPay might potentially enable new hybrids/intermediates of
profit, non-profit, and socially-responsible organizations/enterprises.
This may also include non-Web services promoted/paid via the Web.
See Blog post for further discussion.
Examples:
Wikipedia
Combination offers including a charitable component
B2B
Business-to-business services also have
significant issues with pricing for digital products/services, and market
segmentation. These generally involve higher price points for which
FairPay models might involve higher value-at risk, but there are many
opportunities to broaden markets with limited use of FairPay. For
example, academic/scientific publishers that charge very high single copy
rates for articles might use FairPay to expand their market for light-use
segments, including consumers and small businesses.
Examples:
Academic/scientific publishers (Elsevier, McGraw-Hill, IEEE, HBS press,
...) Payments
and Infrastructure
Payment service providers are well positioned to
add FairPay offer/sale/pricing/reputation services to their payment services
offered to merchants. Customer Relationship Management (CRM) and
Enterprise Resource Planning (ERP) software/infrastructure providers are
also positioned to extend their offerings to support FairPay.
Cross-vendor FairPay reputation services could significantly increase the
power of FairPay reputations.
Examples:
Credit card services (AmericanExpress, Visa, Mastercard, ...)
Alternative payment services (PayPal, Google Payments, ...)
Specialized monetization service providers (TrialPay, JulySystems)
Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP)
Software/infrastructure providers (IBM, SAP, Oracle, ...)
Physical products
While the near-zero marginal cost of digital
products and services is especially suited to FairPay models, physical
products with low marginal cost might also benefit. This might also
include products and services that are adjuncts to higher cost
products/services, such as warranty service.
Examples:
DVD distribution (Netflix. Redbox, ...)
Appliance warranty services (Apple, HP, Sony, Samsung, ...)
Note: Many of the above businesses have significant instances of
free, freemium, PWYW or similar models that make free an option. Those
businesses might be especially good candidates for experimenting with
FairPay models, since they already incur the risks of no/low payment.
(Working Draft 7/19/10)
To learn more about FairPay, please read
FairPay: The
Future of a Radical Pricing Process |
