Australia-based social networking site FunkySexyCool (FSC) has announced plans to change its business model from a subscription on-deck service to a free off-deck service, all as a result of a billing mistake in Germany.
FSC launched with Vodafone in Germany for a subscription fee of 4.99 euros per month, with some premium services for 99 euro cents. The service was offered for a free one-week trial before the customer was billed, but the FSC and Vodafone systems weren’t integrated properly and the users kept getting the service without paying the subscription cost. “We found out that free users go gangbusters on the premium content,” said Justin Moran, chief evangelist of FSC. The average user was buying 15 premium events a month.
As a result FSC has decided to offer the service without a subscription fee, relying on ad revenue and premium usage for income.”We’re walking away from a lot of revenue globally, but free will drive more users, which will drive more ad revenue,” said Justin. The network has about 200,000 active users globally, in Australia, Germany, Switzerland Austria and South Africa. Justin said FSC would avoid banner ads and instead get sponsors for “money can’t buy experiences”, such as running a popular radio show for a couple of hours.
The premium services are also intended to drive usage around the concept of voting for other FSC users. Supervote lets people vote 500 points instead of 20 while Superstar lets someone vote for all the men or women on the site…there’s a lot of reciprocity so the person buying a superstar will receive a lot of votes from members of the opposite gender. The other one is “Call out”, which puts users message and photo on someone else’s profile — only one call out can appear at a time, so there can be bidding wars over the call out displayed on a page.
If you’re free you may as well be off-portal, which is the other aspects of FSC’s change in business strategy. It is now making its service available using WAP link and using Bango to charge for premium content — a downloadable application is coming in June. Despite this FSC is also partnering with carriers, since in the short term that is the best way to let mobile users know about the site. It’s launching its off-deck beta service in the US on April 9, free with premium services costing $1. On the carrier side FSC met with Cingular at CTIA, is close to a deal with Sprint, in the late stages with Verizon and will launch T-Mobile once it has finished with T-Mobile’s European operations, said Justin. In the long term FSC hopes to be independent of carriers, since they — especially in the US — try to push the content providers to help the carriers sell data packages…Justin listed the carriers as one of the three main threats faced by the company, which is a sad state of affairs but definitely the opinion I’ve picked up from a lot of other content providers.
The other two threats listed by Justin were getting a good internal team (which is common across all companies) and the social networking/community bubble. There are concerns over whether it will burst, whether it will transfer to mobile, and what that would mean for FSC.
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