Three weeks ago we started asking our users what they thought Poptiq was worth. Our goal was to get real users’ opinions on the value we provided, so we could proceed with a service pricing model that was fair. Specifically we asked whether users thought Poptiq should be an ad-supported or subscription based service. If they thought it should be subscription, we asked what rate. As I mentioned in an earlier post, we have been extremely pleased with the number of responses to the question – both in terms of opinions and comments. As we expected, this is a topic users seem to care about. So, here’s a summary of the results:

78% of the responses were in favour of a service supported by ads. These users didn’t want to pay a monthly fee for the service, but were willing to accept being shown highly targeted ads matched with the videos. This is great news, as the mobile advertising industry (current state of the economy aside) is starting to take shape. Advertisers are recognizing the value of mobile engagement and with Poptiq’s personal relevancy model, the ads will be well targeted.

22% of the responses indicated that Poptiq shouldn’t have ads. These users were willing to pay a monthly fee for the service; suggestions ranged from $0.99 to $20.00. The distribution was trimodal: a cluster of users in the $2-$3 range, a cluster in the $5 range, and a cluster at $10. There was a ’smattering’ of users above $10, but not enough to be statistically significant. Now this is interesting. Here’s a group of users who may have found the Poptiq experience compelling enough to exchange it for some of their hard earned cash, or they are offended by the idea of mobile advertising and will pay to make it go away. Perhaps there are other reasons which we might never find out, but regardless, this is still a large enough group of users to suggest that there is a market for a subscription based mobile video service.

There’s a deeper level of analysis that we are working on such as correlating the duration of use (how long they have been using Poptiq) and the frequency of use (how often they use Poptiq) to better understand how these opinions on value line up with varying degrees of engagement. Drop me a note if your interested in hearing more about this, once we’ve crunched the numbers and examined the patterns I’d be happy to share some of those details.

So now what? I guess that means we’re going to have two different versions of Poptiq! The dev team has already started working on changes to the app and changes to the service to make sure we can properly deliver on both. Shawn and I are going to spend a lot more time with our ad partners to make sure that we have appropriate ads to deliver. And we’ve still got a number of new features to roll into the mix for the next release. In the mean time, we’ll leave Poptiq as a free app in the App Store.

Finally, those of you who’ve provided feedback and opinions on what you thought Poptiq is worth, thank you. We’re listening, and we’ll do it right.

Dave.

Today was the day we were planning on introducing our pricing options for Poptiq. We had spent the better part of a month analyzing numbers and working towards a price when we realized we were going about it the wrong way. In this day and age of user generated, crowd sourced, and mass collaboration, it only made sense that we throw away our analysis and instead ask Poptiq users what what they think it’s worth.

Starting today, Poptiq users will receive a video in their carousel that asks them to tell us how they would like Poptiq to be priced.  Should Poptiq be a free ad-supported application, or should it be paid (and if so, how much)?  We’ll gather the feedback for two weeks, then publish the results along with pricing models that reflect what our user’s think it’s worth.  Until then we will continue to offer Poptiq as a free download so new users will have the opportunity to tell us what they think after they have used Poptiq (we send them the video a few days after they start using it).

For those in the industry, perhaps the most interesting and heavily debated aspect of this exercise is the question of how users feel about ad-supported services versus paid services. Industry experts like In-Stat, Convergence Consulting Group, and eMarketer have published research and forecasts for the online and download video markets looking at both ad-supported and paid services. The projections continue to evolve, with no clear winner in sight. The one thing that is for certain is the way people receive and watch video content is changing.

The issue of ad-supported services gets even more serious when the privacy question gets raised. Concerns over privacy and behavioral targeting have been brewing for years, most recently reaching the US congress where Google, Microsoft, facebook, and NebuAd were brought in to discuss their practices on advertising and user privacy. Opinions on how users themselves feel about providing personal and behavioral information in exchange for services on the internet seem to differ greatly. Research by eMarketer suggests consumers are worried about their privacy online - with almost 60% of users surveyed being uncomfortable with advertisers using their online behavior (history) to target ads. Yet Advertising.com in their user survey suggest 94% of users prefer ads over subscriptions (I’m not sure if they asked about possible privacy concerns) The Centre for Democracy and Technology also has online privacy in it’s sights. You only have to look at facebook’s initial launch of Beacon to see how thin the line is for some users.

Privacy aside, the business of ad-supported services remains unproven. Speculation over how successful Google is with monetizing YouTube through advertising is rampant. Yet it seems you can find examples in almost every industry attempting ad-supported models - games, books, video, music, and even food.

So we’re just as interested as everyone else is in knowing how users feel about advertising. Most importantly we want to know what Poptiq users think about our mobile video solution, and what they feel it is worth. If you are a Poptiq user, look for the ‘What’s Poptiq Worth’ video arriving in your carousel and express your opinion in the rating screen. If you’re not a Poptiq user, you have until Oct 8th to get Poptiq and express your point of view. Or you can let us know your thoughts by commenting on this post. Regardless, we want to hear your perspective.

We are living in a user generated, crowd sourced, and mass collaborating world - so stretch those fingers and participate!

Dave.