The web enables us to listen to music, watch tv shows and follow the latest news all without paying a cent. But while things are slowly but surely becoming free, I still believe people are willing to pay for certain value propositions.

Image courtesy of laffy4k

I believe the following 5 things are uniquely profitable in a world of free:

1. Convenience

People are inherently lazy. If you make their lives easier, they will pay you for it.

There are several ways to listen or download music for free, yet people are still paying for songs via iTunes or amazon.com. Why? Because of how easy it is to find and download music on those sites. People value their time more than the 99 cents per download. If you make things convenient and easy people will pay.

2. Quality

Price ensures a more serious and interested clientele. There are many online forums that are free (i.e. Sitepoint, DPreview), but there are also a handful you need to pay for to access (i.e. Webmasterworld, SomethingAwful, metafilter). I believe the reason people are willing to pay for those online communities is because the quality of the content is better. There is a higher signal to noise ratio. This same premise applies to dating sites. People will pay for membership to online dating sites, as opposed to finding dates through any number of free social networks.

3. Additional Functionality

Many websites give consumers just enough services to whet their pallets, and then charge for more functionality or more services, also called the "freemium model." Notable examples include the 37 Signals‘ product offering, Flickr’s Pro Account, and Skype.

4. Customization

Wordpress.com is a great example of this. They provide anyone the ability to have their own personal blog for free however they charge for the ability to customize the CSS or a the blogs domain name for additional fees. Smugmug is another example.

5. Privacy

People still value keeping their private information private. To protect their identity people are willing to pay GoDaddy an extra fee when registering a domain name to ensure the address remains undisclosed.

What do you value enough that you are willing to open your wallet for?

========

Note 1: I would like to delve into this further and have proposed a talk for next year’s SXSW conference on this topic. If this discussion is of interest to you, I welcome any feedback and would appreciate your vote.

========

Kevin Kelly, Wired Magazine’s cofounder, has a really great list of attributes he asserts are "better than free." These qualities people will pay for in a digital age and include:

1. Immediacy
2. Personalization
3. Interpretation
4. Authenticity
5. Accessibility
6. Embodiment
7. Patronage
8. Findability

I asked my twitter followers and received some interestingsuggestions:

* accessibility
* silence
* beauty
* freedom
* peace of mind
* respect
* attention

Any other ideas?

This column was provided by Michael Galpert, co-founder of NY-based Aviary. Aviary is a suite of rich internet applications geared for artists of all genres.

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The Drupal NYC group is having their monthly meetup tonight in NYC. The group is going to discuss setting up Drupal and working with themes. Below is the live feed - should start at about 6:20pm Eastern.

Free TV Show from Ustream

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The Drupal NYC group is having their monthly meetup tonight in NYC. The group is going to discuss setting up Drupal and working with themes. Below is the live feed - should start at about 6:20pm Eastern.

Free TV Show from Ustream

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Multimedia search provider blinkx has announced a distribution partnership with Getty Images today. The partnership brings blinkx search technology to the Getty Images database. Apparently it’s easier to search for images on Getty using the blinkx search rather than the search on the Getty Images site.

blinkx will use their ad platform, AdHoc, to serve ads next to the images from the Getty Images library. Revenue will be shared between both companies.

Last month blinkx made an offer to acquire Miva and this year they have formed a variety of partnerships with Revision3 and the BBC.

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The web enables us to listen to music, watch tv shows and follow the latest news all without paying a cent. But while things are slowly but surely becoming free, I still believe people are willing to pay for certain value propositions.

Image courtesy of laffy4k

I believe the following 5 things are uniquely profitable in a world of free:

1. Convenience

People are inherently lazy. If you make their lives easier, they will pay you for it.

There are several ways to listen or download music for free, yet people are still paying for songs via iTunes or amazon.com. Why? Because of how easy it is to find and download music on those sites. People value their time more than the 99 cents per download. If you make things convenient and easy people will pay.

2. Quality

Price ensures a more serious and interested clientele. There are many online forums that are free (i.e. Sitepoint, DPreview), but there are also a handful you need to pay for to access (i.e. Webmasterworld, SomethingAwful, metafilter). I believe the reason people are willing to pay for those online communities is because the quality of the content is better. There is a higher signal to noise ratio. This same premise applies to dating sites. People will pay for membership to online dating sites, as opposed to finding dates through any number of free social networks.

3. Additional Functionality

Many websites give consumers just enough services to whet their pallets, and then charge for more functionality or more services, also called the "freemium model." Notable examples include the 37 Signals‘ product offering, Flickr’s Pro Account, and Skype.

4. Customization

Wordpress.com is a great example of this. They provide anyone the ability to have their own personal blog for free however they charge for the ability to customize the CSS or a the blogs domain name for additional fees. Smugmug is another example.

5. Privacy

People still value keeping their private information private. To protect their identity people are willing to pay GoDaddy an extra fee when registering a domain name to ensure the address remains undisclosed.

What do you value enough that you are willing to open your wallet for?

========

Note 1: I would like to delve into this further and have proposed a talk for next year’s SXSW conference on this topic. If this discussion is of interest to you, I welcome any feedback and would appreciate your vote.

========

Kevin Kelly, Wired Magazine’s cofounder, has a really great list of attributes he asserts are "better than free." These qualities people will pay for in a digital age and include:

1. Immediacy
2. Personalization
3. Interpretation
4. Authenticity
5. Accessibility
6. Embodiment
7. Patronage
8. Findability

I asked my twitter followers and received some interestingsuggestions:

* accessibility
* silence
* beauty
* freedom
* peace of mind
* respect
* attention

Any other ideas?

This column was provided by Michael Galpert, co-founder of NY-based Aviary. Aviary is a suite of rich internet applications geared for artists of all genres.

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– Docstoc
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– Twitter

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Last month we wrote about the "FriendFeed 9" which were the 9 defaults that FriendFeed offers to each new account. FriendFeed founder Paul Buchheit says that only a few people actually see this default list because most new accounts are referred from someone else which eliminates this default list all together. I am not sure I agree with that - when the early adopter blogs posted about the new beta last week, how many new signups did FriendFeed see via direct links - I will bet that it’s most of them. In fact, the number must be great to the default list because default user Scoble noted yesterday that he can tell when FriendFeed is doing well in terms of user growth simply by how many new subs he gets via the default option.

With the launch of the new beta this week, I thought it was a perfect time to take a look and see where the FriendFeed 9 are now and whether they made any changes to the structure. The FriendFeed 9 is now the FriendFeed 24 - that’s the only change that has been made. The list is completely popularity based, not activity/usage based. This type of popularity list means that the 24 selected individuals will always appear on the list.

This is a very poor way to pimp people - it shows that FriendFeed doesn’t give two knishes about their loyal and active users. This is pretty clear because the most active FriendFeed user Mona (her blog) isn’t even on the list.

Here’s my video on the subject:

Robert Scoble says he wants off the list and in Louis Gray’s post today about the new FriendFeed he discusses this popularity list. He notes, "22 of those users were men, 22 were white and there were two Asian (one male, one female)".

All these popularity lists do is keep the top on top (without any quality backing) and never allow for any user/content discovery. I hope that FriendFeed will look into changing their default policy in the near future. I wrote this post and video because I think every startup should consider the lessons learned here for their own projects.

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Multimedia search provider blinkx has announced a distribution partnership with Getty Images today. The partnership brings blinkx search technology to the Getty Images database. Apparently it’s easier to search for images on Getty using the blinkx search rather than the search on the Getty Images site.

blinkx will use their ad platform, AdHoc, to serve ads next to the images from the Getty Images library. Revenue will be shared between both companies.

Last month blinkx made an offer to acquire Miva and this year they have formed a variety of partnerships with Revision3 and the BBC.

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comScore has released new stats for European Internet usage based on their World Metrix audience measurement service today. The report shows that Russia is leading Europe in Internet audience growth followed by France, Spain and Ireland. Russia’s Internet audience grew 27% from June 2007-June 2008.

As for Internet penetration in Europe, The Netherlands leads with 82% of the total population online. The Netherlands is followed by Denmark, Sweden, Norway, Finland and Switzerland. Based on what I am seeing, Switzerland appears to be pushing out the most new startups out of the top 5 European Internet penetration countries.

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I am not an expert in virtual worlds but on the news tonight there was a segment on Second Life which I thought was worth sharing. The NBC news anchor starts by saying, "The Dark Side of the Web…is Second Life". The segment discusses how parents should keep their teenagers away from Second Life because of all of the sex, porn, drugs, and suicide that occurs in the virtual world. I don’t know about you, but growing up in Brooklyn, most of those things happened on a near-daily basis. The doctor in the segment explains that if teenagers participate in an activity online, they are more likely to want to do it in real life.

Again, while I don’t use Second Life, my guess is that you can find these things anywhere online even outside this "dark side" virtual world.

(apologies for the poor video quality)

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Last year we asked a number of startup entrepreneurs to provide their top tips for success. Today "DebtKid" on the LendingClub blog listed 7 mistakes made when he/she was building out his/her startup. Check out the full blog post for all of the details and apparently later this week will come 7 things done right.

Here’s the 7 things:

1. I Managed People like Michael Scott from “The Office”
2. I Hired My Friends
3. I Budgeted Like Britney Spears: Terribly
4. I Leased A Fancy Office While My Large Basement Went Unused
5. I Raised Money Before I Had Customers
6. I Mixed Business with Pleasure
7. I Assumed Everything Would Go According to Plan

I will get working on the next startup tips ebook. If you would like to participate, send me a note.

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I’ve written a number of times before about startups who employ the freemium model which brings together a free option plus premium paid upgrades. Most startups give away so much for free that users have no reason to upgrade. Most startups I speak with do little (or no) testing to see just what the right level is to set the free/paid bar at.

Marketing Sherpa posted a case study late last week of a golf supply company that increased their sales 685% by adding a "haggle" button next to the item price. The golf Web site is pretty Web 1.0 in look but the case study is well worth a read. You’ve got to keep testing your pricing plans until you find the sweet spot. It could easily mean the difference between small growth and major paid usage growth.

TEST TEST TEST

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Google has announced this morning that they have opened up their ad serving tool Google Ad Manager to everyone. Google Ad Manager is very similar (nearly identical) to the OpenX ad manager software. Google Ad Manager runs on Google’s servers while the main OpenX ad manager requires you to install the software on your server. You only need a Google AdSense account to use Google Ad Manager.

I’ve been using the Google Ad Manager for the last couple of weeks and found it relatively easy to setup and use. You setup your own campaigns, your default ad networks and you can backfill ads with Google AdSense ads so that an ad slot is always filled. It works just like OpenX in that you setup ad slots and ad types and then fill those with your customer ad impressions. This seems perfect for the small to medium size publisher and it does require a bit of basic advertising knowledge to get everything setup to work properly. Their walkthrough could really use some work and would be better as a video instead of a Web overlay.

What would be smart is if they hook up Google Ad Manager into Google Checkout and allow publishers to sell ads directly inside of Ad Manager.

The Google Ad Manager is much more robust than I expected and could put a hurting on the OpenX hosted platform that is apparently coming soon. Back in January OpenX (formerly OpenAds) announced a $15.5 venture capital round and the upcoming launch of their hosted ad manager. 

Just remember as with all Google services, the more you use Ad Manager, the more they know.

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A month ago I posted a video around the following question, "How do you compensate content creators?" I’ve re-embedded the video below for anyone who didn’t get a chance to see it the first time around. Last week Seth Godin joined the movement with his post titled, "Ads are the new online tip jar". It’s great to see Seth say basically the same things I did last month. Maybe with his wide-reaching voice, the online advertising discussion can move further along.

Seth begins with the widely used phrase, "I never click on ads," and then he notes that it’s almost a badge of honor to say that. I completely agree but for a different reason than Seth. Seth believes it’s due to not having the time to interact with the ads. I believe it’s "cool and hip" to block and/or not interact with ads.

Seth continues, "If you like what you’re reading, click an ad to say thanks." Amen to that. Clearly no one is suggesting clicking on ads just to click on them. But interacting with a sponsor or advertiser provides a benefit to the user, publisher and advertiser. And it shows that you value what the content producer offers. Though I would expand Seth’s comment to any content including video, audio, image and text.

Here’s my video on the topic:

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Last week we launched a giveaway for a full pass to the Web 2.0 Expo here in NYC next month. Today we selected the winner at random and Daryn Nakhuda is the winner. Thanks to everyone who participated and if you are still interested in attending, you can receive $100 off by registering here.

Thanks to everyone who participated!

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comScore is out with their June Ad Metrix analysis of the top online display advertising publishers and advertisers in the U.S. On the publisher side, Fox Interactive Media leads the pack with 52.3 billion ad views. MySpace accounted for 51 billion of the 52.3 billion hence my story title. Facebook came in sixth with 3 billion ads and Glam made the report in tenth with just over 2 billion ads.

On the advertiser side, Microsoft leads the pack with 5.5 billion ads purchased. In second place is the University of Phoenix with 4.7 billion ads - guess they have some open seats. Vonage and Netflix came in eighth and ninth respectively with just over 3 billion ads purchased. Experian Interactive is the company who pushes the dancing women/bear/monkey ads for Lower My Bills and the FreeCreditReport ads.

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