Web 2.0 non-paying users: fickle, or spoiled?

The young, non-paying users of Digg, YouTube, MySpace, are catered to more than paying customers, these days.
Written by Donna Bogatin, Contributor

In “Web 2.0 QoS: You get what you (don't) pay for?” I ask: “How demanding can a non-paying user be?”

The recent heat wave induced outage at MySpace has sparked much criticism. CNET reports:

this weekend's outage raised eyebrows. It just didn't seem conceivable that MySpace, famously purchased by Rupert Murdoch's News Corp. a year ago, could fall victim to a localized power outage...

To make matters worse, MySpace's young user base is a notoriously fickle demographic. If the service begins to build a reputation for inefficiency, glitches or frequent outages, tech-savvy teenagers and young adults could, conceivably, move on to the next trendy site.

The legions of young, non-paying users of free-to-the-consumer Web 2.0 properties such as MySpace, YouTube, Digg…seem to be catered to almost more than paying audiences are catered to, these days.

MySpace “friends,“ Digg “diggers” and You Tube “broadcasters” not only receive free Internet services such as Web page and video hosting, but the owners of the services, which are provided free-of-charge to the public, are bending over backwards to prevent very non Web 2.0 advertising from “interfering” with the non-paying users' Web 2.0 experiences.

Saul Hansell, in “For MySpace, Making Friends Was Easy. Big Profit Is Tougher,” last April posited:

In buying MySpace, Mr. Murdoch also bought a tantalizing problem: how to tame a vast sea of fickle and unruly teenagers and college students just enough to notice advertising or to buy things, yet not make the site so commercial that he scares off his audience.

In a May Fortune magazine interview Steve Chen and Chad Hurley, Co-founders, YouTube, spoke about the delicate nature of an advertising based monetization strategy for YouTube:

Hurley: We're going to sell sponsorships and direct advertisements. But we are building a community, and we don't want to bombard people with advertising.

Chen: If we wanted to, we could instantly turn this into $10 million in revenue per month by running pre-rolls [short video ads] on the videos. But at the same time, we're going to make sure that whatever revenue model we've built is going to be something that's accepted by the users.

MercuryNews quotes Julie Supan, YouTube's senior director of marketing, in “How will YouTube make money?” last month:

It's not just a matter of whether or not the advertiser will find value. It's also whether the users find value in it.‘ Don't expect YouTube to embed commercials at the start or end of videos, she said. `We don't think those things will be in line with our community.’

Digg Founder Kevin Rose is quoted at a SDForum Search SIG event earlier in the year:

It's (ads) never going to be a part of the site to bombard users with ads. Ads are only on 40% of the available inventory at present. We are trying not to clutter the page with ads.

Web 2.0 properties’ concerns about not “contaminating” their free-to-the-user services with prosaic advertising may be short sighted.

Given the current under-monetization of the popular Web 2.0 services, they need all the advertising dollars they can solicit to pay for the infrastructure offered free-of-charge to their “communities.”


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