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Social Network Content: Are Users Willing to Pay?
eMarketer, Oct 2009, Pages: 9
On September 15, 2009, Facebook CEO Mark Zuckerberg announced that the social network had surpassed the 300-million-member mark and reached cash-flow-positive status for the first time.Those milestones validated Facebook’s core concept of monetizing its service through advertising, and revived a lingering question that has swirled around social networking since its inception: Will users pay for content?
A close look at the social network landscape reveals that beyond mainstream sites such as Facebook and MySpace, paid content is alive and well. Networks that cater to market niches have particularly thrived on hybrids of paid models and ad-based systems. Some of these players, such as LinkedIn, Classmates.com and MyLife.com, are earning at least as much revenue from fee-based content and services as from advertising.
As the online ad market continues to struggle, paid services including membership fees, premium features and virtual goods will take on increasing urgency for social networks, either as primary revenue generators or ancillary income sources.
Key Questions:
- Are social network users willing to pay for content?
- What is the revenue outlook for paid social networking sites?
- What are the prospects for Facebook and Twitter charging their users?
- What strategies work for paid-content providers when ad-supported competitors enter the fray?
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