Goods and services on the web

Published Dec 18, 2011

I don't really have an introduction for this one. I honestly just wrote everything/anything I thought about. Hopefully you'll get something out of this. I introduce my forecast about business on the web, so let's see if I'm right.

Two examples.

I’ll start with something people can’t really relate to: fonts. In my case, there were two choices to make. FontSpring or Typekit. FontSpring sells fonts with a one-time fee. You buy specific fonts, use them, and that’s it. You have the files, and you can do (almost) whatever you want with them. It’s great.

Typekit is a bit different. They run a subscription-based model where you pay a yearly fee and use whatever fonts you want. There are limits: you can’t download the fonts, and you can only use them on the web. For most people, this isn’t a big issue. Sometimes, it’s a deal breaker.

A tough choice? Not exactly. While these two business strategies seem completely different, they don’t have the same purpose. You don’t really have to choose one over the other. The essential question is basically, “how much do I need?” If you’re not going to use a bunch of fonts, use FontSpring. You might end up saving a lot of money. On the other hand, if you find yourself using a variety of fonts and don’t want to drop hundreds of dollars on each one, choose Typekit.

Now, here’s an example that almost everyone can figure out: music. We’ve all seen Pandora, Spotify, Google Music, and the others, but which one’s the right choice?

Let’s say you’re a casual listener. You can either buy an album, which is around $10, or you can get a month-long subscription from Spotify, which is $9.99 per month, and listen to the same album. Yes, I’m assuming you’ll get the premium membership. Just roll with it. This situation isn’t a whole lot different from the fonts. You can download an album and do whatever you want with it, but you don’t have that much freedom with Spotify.

Again, if you’re a person who buys a couple of albums a month, then you’d obviously choose to go with Spotify. It’s all about how much.

The rise of services.

Now that we’ve thought about some things, I’ll establish my thesis. We’re going to see a rise in subscription-based services on the web. Just forget about one-time fees. It’s inevitable because it’s the way things work. Payment for intangible goods and services is inherently subscription-based because it’s not like we actually own those products. I’d rather let my music be a service rather than a good. I get more choices, and I end up paying a lot less.

Another idea is software. Paying for software is trash. It’s just wrong. We’re at a point in time where it doesn’t make sense to sell software anymore. There’s just no market for it. I’m not against commercial software at all. It’s just that selling software is bad. This will be the topic of another blog post, but if you’re going to develop software and sell it as a good, STOP. Do not misframe.

(Just dumping thoughts here... sorry. If I actually tried to make this good, I’d never get around to publishing.)

Services are good. I claim that you can’t succeed by selling intangible goods online anymore. Subscription-based models are the way to go.

What’s next?

Books, movies, fonts, magazines, etc. Digital media. I’d like to see subscriptions for those. We’ve already seen most of them already, and Amazon has recently taken up a venture to offer a Netflix-like service for books. Excellent! This is the way we should be moving. Why? Because it works. We have also seen subscription games from companies like OnLive. We need more of them, because I think the only issue is price. As soon as more publishers and developers realize the benefits of this new model, we’ll see better prices.

Yeah, I’m done. Not bad for a first interesting blog post, right? Comments are appreciated—just be civilized.