An old friend and I had dinner the other night, and he told me that a friend of his was starting a company focused on rating the customer service of online sites. Why? E-commerce sites can no longer compete on price or shipping, and so customer service has become the new frontier.
That’s a fascinating concept in the “free” economy world of Web2.0. I don’t, however, think that that’s sustainable anymore, and more and more examples are proving as much.
I’ve just read an article on TechCrunch about PicPlum. Their whole premise is that the best photographs are worth paying more for. Would you rather send many, poor quality photos, or 15 high-quality photos? I, personally, would like to have a budget per month, and mix and match size and quality against that budget. If you’re going to ask me to pay more, then give me complete customizability. I’m not sure if that’s where they’re going with their concept, but I like the fact that PicPlum is trying to bring value to something that WalMart has tried to turn into a commodity.
One might call that the Apple strategy in that Apple has brought value back to the laptop market where Dell had turned it into a commodity item. IBM, with their ThinkPad division, tried and failed, and so it’s not easy said, easy done.
What’s more, content generators are finding themselves moving away from free as well. The NYTimes showed really solid online subscription numbers this last quarter, and Fred Wilson’s blog about porous paywalls shows that a new medium may be forming for content. This is definitely a good sign for folks who believe in the value of journalism, of which I am one, and is another simple example of the reversal of the trend towards free.
Even clones of the early Web2.0 services such as del.icio.us (Pinboard) and flickr (500px) are starting to, and able to, charge.
I wonder if this is a function of the consumer getting wiser, or if it’s a matter of businesses realizing that the race to zero is no longer a sustainable business model. It could simply be that the indestructible revenue model which was Internet ads doesn’t actually make for a good experience and good web service, and we are now demanding both from our web applications.
Regardless of the why, I think it’s pretty clear that the race to zero has stopped, and that in its place the Web is seeing a resurgence of opportunity.