According to a Forbes blog post by Taylor Buley, Ning CEO Jason Rosenthal is declaring victory as his company moves from the “freemium” model to a pay-to-play strategy. Buley quotes Rosenthal as saying that 35,000 Ning networks have signed up for paid plans since they announced the end of free networks. More importantly, Rosenthal says it’s not a case of 35,000 people buying the low-end $3 per month package, and that many of those that signed up are purchasing higher-priced options.
Sounds like Ning’s decision to abandon the freemium model was the right choice.
Or was it?
In the short term, Ning’s decision has worked out well. But it’s the longterm that will tell the story.
Those 35,000 Ning users who ponied up the cash when faced with the prospect of losing the communities that’d built up over the years are very different than tomorrow’s Ning customer. The 35,000 had the opportunity to use Ning, see the value in it, and decide it was worth paying for without having to pull out a credit card on the front end.
Now consider the would-be Ning customer of tomorrow: What’s that person to do when he or she wants to test drive the product and see if it’s a good fit? Sure, there’s a 30-day free trial and a 60-day money-back guarantee. But what online community do you know if that developed in just 30 or 60 days? Plus, you need to enter your credit card info in order to take advantage of the free trial.
Do you usually pull out the plastic to try online community or social media tools?
Me neither.
I have a dog in this fight, so to speak. I run Delphi Forums (which is owned by Mzinga, although this blog post contains by own thoughts and may not represent the views of Mzinga and/or its management). We’ve used the freemium model since 2001 and it’s worked for us. We’ve considered the pay-to-play model and rejected it.
Maybe it will work for Ning. Maybe not.
The point is that the 35,000 signups they’ve had, while certainly a positive sign, do not mean that their change in strategy is now a sure-fire success. We won’t know that for several months, when we see whether the potential Ning customer of tomorrow is prepared to pull out the plastic for a test drive.