Paying for content on the internet - a realistic business model?

In a Web 2 discussion held at the Tel-Aviv Annual Prime Minister Economic Conference a few days ago, a top Google speaker said with complete conviction that "all business models for content over the internet are workable but for one - end user paying for what they get". A verdict? A prophecy? A wild guess? A premature analysis of a nascent industry?

With some 400 subscribers www.desk-trainer.com and with magnificent user rating (4.78 out of a maximum 5) we should have been seeing many more new subscribers every day. It is quite frustrating to have people do the FREE TRIAL we offer, send a 5 out of 5 feedback and then not subscribe.

However, if we were to accept the Google analysis, we'd never be able to really produce content of high production value for the internet. We'd have to satisfy ourselves with the millions of clips showing free on Google Video and other similar services.

Apple has managed to tempt people to pay for music content with the iPod. For 3-4 years that seemed to be a lost cause with the illegal but successful music-sharing sites endangering the whole recording industry.

One would expect that the "big guys" like Google will use their vast influence to create an attractive vehicle that will have people lining up to pay for internet content they obviously like and possibly need.

So will the patient content producers that will last this initial stage be the ones that will enjoy the changing trend if and when it happens (just as those that lasted the tech crush in 2000 have done well in the last 3 years)?

First exposure at a US conference

An Israeli startup packs its first exposure into a heavy suitcase full of printed material, visual background for the Table Top it has rented from the organizers and boards a 15 hour flight from Tel-Aviv to San Francisco.

From the moment we arrived we needed to change not only the time on our watches to the local time, but the scale we were using to measure just about everything. From the size of the hotel to the numbers of participants in the 50th Meeting of the Human Factor and Ergonomic Society to the size of the hamburgers and the so called: "small" cups of coffee.

Two days later I found myself at the exhibition hall demonstrating www.desk-trainer.com to representatives of companies and organizations we could only dream of meeting face to face. Apple, Oracle, Cisco, Volvo, Boeing, Raytheon, Qulacomm, as well as the US Army and the US Navy and many ergonomic specialists from US universities came to see us and talk to us - all asked for the Free Trial subscription we offered.

This is international world class league. This is where we should compete, where we want to succeed. The wonderful ratings our members-subscribers gave us, the compliments we got needed to overcome the busy and loud activity in the exhibition hall. We came thinking we know a lot, only to discover how much more we can learn. The scale of things...

For the 3 days we were there, as closing hours of the exposition approached you could easily notice the experienced exhibitors of large ergonomic manufacturers as they were packing up for the day whereas the diligent first timers, startups like us stayed on until the last participant left the hall.

The first exposure of Desk-Trainer felt like a first night in the theatre the like of which I had experienced so often in the past. The critics were better than we could hope for. Now we need to get the public to subscribe.

Conversion rate blues

Since the first week our site was up and running, I found myself sleep-walking early mornings to my computer to check the statistics. The hundreds that visited www.desk-trainer.com everyday and the wonderful feedbacks we got were enough to keep us happy only for a short while.

- How many subscribed, asked Danny my COO, always down-to-earth.
- A few
- How many?
- A dozen or so.
- Friends?
- Some
- So what's the conversion rate?
Trying to calculate, then realizing how poor the answer will be I preferred to keep our spirits high...
- They liked us
- How do you know?
- They sent excellent feedbacks
- How often did women that told you what a nice guy you are, end up in bed with you?

The following days I tried to find and answer to the question: why is it only few put their money where their feedbacks are?

The more I tried to work out correlations the less it made sense. Sometimes when we had many visits, there were no sales, and when we had fewer visits we had a very promising conversion rate, but sometimes there we got more paying members for more visits. The only clear conclusion we could draw is: they like www.desk-trainer.com our desk exercises helped them, they liked the animation, the voice-over - they took the time to write - but only few joined.

It will soon be a month since we started our subscription site. My mornings are still colored by the numbers of visits I see - a confusing set of data, no logic - the conversion rate blues.

Unique & irresistible value proposition? Who cares?

Have you noticed that whenever you sneeze you find out that everyone around you has a cold or an allergy? That is how we felt since we started production of the 5 minute work-station desk exercises developed by Anat, my sister based on the work of Dr. Feldenkrais. Repetitive Strain Injury (RSI) and computer injuries were everywhere we looked.

Having something you know people really need, wrapping it nice and cool, making the price irresistible and getting it on the web for all to try and buy- I thought its just a matter of weeks before traffic to the site would be so heavy that we'll need to set up many servers in all the main territories. We had meetings to work out how we'd cope in case of such emergencies...
How could anyone refuse an opportunity to relieve pains and strains once they have experienced the free desk exercise at www.desk-trainer.com ?
How could any search engine miss US?
Content companies for cellular phones will be after us for licenses, PDA companies too, insurance companies will buy licenses for riders and Fortune's 100 Best Companies To Work For will all line up for Desk-Trainer, or else they may loose their rating.

No way - nada.
We were out there all right, but we soon found out search machines hardly noticed us. Each time an odd visitor would send us an encouraging mail we thought "maybe, maybe now it will all start clicking into place".
Nada.
We met with some HR people who admitted the repetitive strain injury problem was hurting both employees and the corporations, and our product seemed really cool, but people are lazy they'd rather take a pill or pay for massage or even go on suffering silently. Corporate culture, they said, will not support such activities, people would feel shy in open space, very few employees made the most of costly office workplace ergonomic improvements offered by the management. And anyway, not enough people know who Dr. Feldenkrais was, and the information that the Feldenkrais Method was so effective was shared mostly by speicalists, why did we not choose Yoga, or Pilatis?

We were back on the ground floor, still full of faith, looking for ways to climb up a real ladder in a virtual world we were learning about the hard way.

Start-up on a café napkin

In December, a month before my 60th birthday, I left the start-up medical-device company I headed for 5 years in the hands of new investors. Although I knew this was going to happen and was preparing myself, when I took my laptop and my files in a cardboard box and went down to my car in "-3" – subscribers parking area – it occurred to me this was like the beginning of my "injury time".

A year earlier, during a coffee break in the hi-tech tower restaurant floor with my COO and CTO, as the clouds of the impending lay-offs were gathering, looking around at the young attractive programmers sitting at the tables around us, as we religiously did every morning, I recall the following conversation:
- Do you see what I see?
- Stop staring, they're too young for you, my COO remarked.
- I don't mean that.
- Yea, sure… sure, you're admiring their intelligence, my CTO was laughing.
Yes, we kept a rather non formal relationship in the company.
- Something they all have in common.
- A burning desire for you?
- They either wear a wrist bandage, or they keep massaging their shoulders and necks, or they keep fidgeting uncomfortably in their seats.
- That’s the hi-tech syndrome. My wife has it too, said my COO.
- Too many hours at the computer. We all get these strains and pains.
- That's why I go to the gym in the evenings, remarked the CTO who looked like someone dedicated to body-building.
- That’s what you tell your wife.
- My sister has a solution for it.
- Your sister? Didn't know you had a sister.
- Near San-Francisco. She developed an application to the Feldenkrais Method: short exercises in front of the computer screen.
- Great idea
My sister Anat was a student of Dr. Feldenkrais, then his assistant, then under his guidance developed what is known today as the Anat Baniel Method
- I thought we're having our coffee break, the CTO complained
- Its some kind of Yoga, eh?
- The Anat Baniel Method: 5 minute desk exercises. I tried them. Really effective.
- Great idea for a start-up.
- You think so?
- I'm sure someone else has thought of it.
- I checked the internet, didn't find anything like it. Just simple office stretches.
- Great idea for a start-up. Seriously, I think this is more interesting than anything else that's been offered to you.
- Oh, look at that one – you don't know what you're missing guys!
Sam was always on the hunt and we were worried that some day someone will misunderstand his humor and he would be arrested for sexual harassment.
- Content is the buzz.
- Would you join?
- Yea, sure. Great idea. I'll check to see if there is no one out there doing it, but – great idea!

One more start-up outlined on a café napkin.

Some weeks later Desk-Trainer Ltd. was incorporated, the first exercises went into production and a whole team was working on the subscription web site. www.desk-trainer.com has become my personal healing platform from "injury time" which is where I am even now to "Money time", which is where I'd like to get. And you my readers, through this blog, are invited to be my travel companions.