Alex King recently wrote about the feedlounge investment and mentions a few interesting numbers about launch and maintenance costs. He also expounds on a possible $5/month pricing for the pro-plans, a price-point corroborated through reader feedback, though there’s no indication that this will indeed be a final price for a paid feedlounge plan. They asked for some feedback in a recent newsletter and in response to the “how much would you be comfortable paying for the paid version of FeedLounge” question i wrote:
Considering that i paid $25 for my NNW-license i’d say i’d be comfortable with paying up to $40 per year if it really has something to offer that i can’t get out of a desktop-aggregator, otherwise possibly less. I wouldn’t be particularly happy with a monthly subscription rate as i usually find these on the expensive side. This is something that imho flickr got right and backpack got wrong.
A few thoughts on this: with lots of free or open-source desktop readers, the advent of online services like bloglines and rss support in mainstream services and browsers such as my yahoo!, firefox and safari, rss readers are quickly becoming commodity software. Only a minority will be willing to pay for rss readers soon, much like browsers are commonly expected to be free these days. When you’re about to introduce a for-pay service or application in this area you’re not really competing against the free alternatives any longer – you’re competing against other for-pay services and applications. I don’t have a pre-release feedlounge account, but let’s just contrast feedlounge with my feedreader of choice, netnewswire, purely based on pricing. Netnewswire is available as a free lite-version and a for-pay version with additional features and for all i’ve heard about feedlounge they’ll offer free and for-pay versions as well. The for-pay version of netnewswire costs $25, Alex King mentions that based on preliminary feedback a lot of people would be willing to spend $5/month for feedlounge – that’s $60/year, a pretty steep price difference. Feedlounge would have to be a radical improvement over netnewswire to make me jump ship, and i already regard netnewswire one of the finest pieces of software i’ve ever used, so that’d be quite an accomplishment. What i find interesting here is the difficulty of competing against desktop-software with a web-application. If you really have to charge $60/year for your web-based feedreader to cover operational costs and keep afloat you might have a hard time competing against desktop-software. Charging $5/month instead of $60/year might cover the real costs to some degree because, let’s face it, a pack of cigarettes or a coffee at starbucks costs as much, but as soon as your customers start doing the math and comparing the alternatives, you might be in trouble. Unless you aren’t competing against desktop-software at all – flickr isn’t competing against iphoto or anything else on the desktop. What they’re doing wouldn’t work offline, the web isn’t just a platform of choice, it’s the only possible platform for a service like flickr.
Don’t get me wrong, i’m not trying to bash feedlounge before i’ve even tried it. I’m just curious whether the people behind feedlounge have anything up their sleeves that’ll make it more than just yet another feedreader and if not it’ll be interesting to see whether they’ll succeed against their competition on the desktop based on equal grounds – ease of use, features and pricing. But then, perhaps i’m just behind the times and desktop apps are really on their way out – just look at email and think about how many of your peers haven’t used a desktop email client in years. Most people i know are perfectly content with gmail et al – not that they are paying for webmail, though…
To get back to the monthly vs yearly payment thing, the day after i replied to the feedlounge survey with above quote i came across a post by Chris Heathcote about subscription fatigue. He writes:
So what about pure Internet services? I think there will even be a push here to make more one-off purchases rather than continual drains of cash. Compare, say, Flickr to the old-fashioned way of pricing – Typepad and Backpack. Flickr is $24.95. Sure, you are actually buying one year of service, but it’s sold as a one-off purchase, a yearly event; far less taxing that a constant auto-renewing drain.
Well, uhm, i agree with this. Go read.