From Free to Fee: 7 Services Adding New Charges
The days of getting something for nothing on the Net could be dwindling. More and more companies are rethinking their no-cost approaches and introducing charges for the online services that users have come to rely on.
The shift may not be a total surprise, given the economy's effect on the tech industry, but that doesn't mean longtime customers suddenly confronted with new terms are any less unsettled. The free-to-fee trend is rapidly gaining momentum--and odds are, it's only getting started.
Here are seven services taking the plunge and requiring you to cough up cash to keep enjoying their perks.
1. Kodak Gallery
Kodak has announced that it's shifting to a fee-based model for its Kodak Gallery photo-sharing service (formerly known as Ofoto). Customers now need to spend an annual minimum on Kodak-offered products, or face having their photos deleted.
"We have 5 billion photos that we're storing," says Mark Cook, Kodak's director of product management. "We can support some of that, but it's hard to support all of it."
The spending minimum varies based on how much space you're using: For 2GB or less, you'll have to buy $5 worth of stuff each year to keep your account. If your photos take up more than 2GB, your annual spending requirement jumps to $20. The updated system is already in place for new users. Customers who had accounts before the announcement have until mid-May to meet their minimums or see their photos fade into oblivion.
"If you look at folks that are consuming lots of storage without spending anything, that ends up costing us a lot of money--money we really can't put into developing new output services," Cook says. "In the long run, you end up with companies that are giving things away for free and companies that have business models."
Online radio site Last.fm sparked a minor revolt (200+ pages of comments prior to the post's being locked down) when it announced last week that many of its users would have to start paying to play. Anyone listening to Last.fm outside of the United States, the United Kingdom, or Germany would have to pony up €3 a month to keep the music going.
"We simply can't be in every country where our radio service is available selling the ads we need to support the service," founder Richard Jones explains.
The outrage led Last.fm to delay its decision, but you can be certain that the free ride is ending. It may just be another few weeks until the switch happens.
Web startup LetsCallMe got plenty of coverage when it launched its free anonymous-calling service last September. The service allows you to set up a page where anyone can call you without ever seeing your number--perfect for people who deal in e-commerce but who don't necessarily want to post their digits publicly.
Last month, though, LetsCallMe relaunched. Users found their pages converted to sign-up portals, and--without warning--the free service was gone.
Cablevision Systems' Newsday is just one of the publications converting their online editions into subscription-based services.
"We plan to end the distribution of free Web content and make our news-gathering capabilities a service for our customers," Cablevision COO Tom Rutledge told Reuters.
The idea of charging for Web content is not new: The Wall Street Journal charges for much of its online material, and other newspaper publishers are thinking about following suit. Considering the struggles of the entire publishing industry, you can't blame the paper for experimenting with a new revenue model--warranted or not, however, it's still another hit on your wallet.
Dabbling in high-def discs doesn't come free for Netflix subscribers anymore. The online movie service started charging a dollar a month for access to Blu-ray titles last fall. Then, just this week, it announced it was raising that rate by anywhere from $1 to $8, depending on your specific subscription plan. The company cited increased usage of Blu-ray discs for the change.
The start of March marked the end of free service for phone-recording site Gabcast. The site's previously no-cost phone-to-MP3 option jumped to 10 cents a minute, as its staff had announced a few days before. The service, designed to create audio files for podcasts or audio blogs, still offers a free VoIP recording option--but if you want to phone in, you'll have to pay up now.
Video-sharing service Brightcove switched off its free service just before the first of the year. The site had allowed users to upload video into an ad-supported platform, but the business model didn't prove worthwhile.
"Although more than 40,000 publishers have signed up for the network, it represents less than 1 percent of our revenue," spokesperson Josh Hawkins wrote in a blog posting. "Our core business, the Brightcove platform, has been extremely successful for us and for our customers, so we've decided to focus 100 percent of our business efforts on the...platform...customers pay us to use."
Users with clips on Brightcove's site received the option to pay for a "low-cost edition" of the service's premium platform. Judging by the comments on the official announcement, though, most people didn't regard the decision as being too bright of a move.
Already, numerous other free-to-fee transitions are in the works. Both People.com and Time.com are said to be mulling over subscription-based systems, and a bevy of newspapers may soon do the same. Twitter is toying with the notion of "premium" accounts for corporate users. Even the cable TV industry is tossing around the idea of charging customers for viewing shows online, according to a report published in the New York Times this week.
"Consumers are consuming more content in greater numbers than ever before, but the ability [to] effectively monetize the growth in audience size and engagement has not been keeping pace," theorizes Mark Mulligan, research director of Forrester.
A weak ad market, Mulligan says, only adds to the problem. Factor in licensing fees within services offering copyrighted content, and you have a sticky situation.
"Content owners see all of the growing consumer usage and expect to see appropriate increased compensation, but the sites themselves are often not seeing their ad revenues go up accordingly," Mulligan says.
You can anticipate, then, seeing more freebies say "fee, please" as businesses look for ways to stay afloat. We may not always like it, but in many cases paying for a service is better than losing the service altogether. After all, someone has to do the work, and those people have to get a few shekels for their efforts.
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