Comments on: Twitter SMS Users Outrage, Twitter Using Drug Dealer Economic Model?

By: Dave

Dave — Mon, 25 Aug 2008 17:59:19 +0000

Twitter has an API which has allowed many 3rd party applications to spring up since its release. Twitter has benefited and perhaps in a few cases been hobbled as to how it will make money from the API (for example it could never plaster the site in adverts for example as people would just switch to an add free client app).

Within hours of the announcement about SMS there were about 5 people working on alternative services, myself included (we came up with http://www.hootsms.com and raced to open for business).

This is an interesting development, where a service gives away content for free, especially when there doesn;t seem to be any alternative way to monetise.

By: Craig

Craig — Thu, 14 Aug 2008 09:18:55 +0000

we’ve allowed ourselves to become accustomed to receiving free services from companies with, frankly, ludicrous or broken business models that couldn’t possibly sustain that free offering over the long term.

Interestingly – and being slightly glib – enough, the exception to this is the BBC. I know that technically it isn’t free, but most people see the news on their website as being a) free and b) decent enough that they don’t need other papers.

But, I’m now wondering…if enough Twitter users said they would pay for their service to their phone, is there a possibility that news outlets could charge for similar? The web being the ‘free’ service but (for those without 3G or wifi phones) SMS updates being paid for?

Probably not as the economic model for the press is still all wrong (but that’s another argument) but it’s a thought….

By: Seamus McCauley

Seamus McCauley — Thu, 14 Aug 2008 08:56:27 +0000

I think one of the ongoing problems with the digital economy is that ever since the first bubble we’ve allowed ourselves to become accustomed to receiving free services from companies with, frankly, ludicrous or broken business models that couldn’t possibly sustain that free offering over the long term. As soon as one company giving away some valuable/expensive service goes (inevitably) bust another ones rolls up to fill the gap, until it almost seems we are entitled to getting free stuff, forever, from businesses that haven’t thought through their development cycle.

Hence outrage when a company comes along that has, deliberately and thoughtfully, manoeuvred itself into a position where it has market share, a network effect, a god service and can really get away with charging. The short history of the web has already been long enough to train us to expect our online services provided by VC-funded, pie-in-the-sky dotcom dreamers who hope to one day recoup their costs through advertising, and therefore to experience perfectly genuine outrage when we come across a real business that intends to at least meet the costs it incurs in providing us a service.