There was a time when the ringtone industry made over a billion dollars a year. To this day, downloading ringtones rakes in over $500 million dollars each year. And that was at just 99-cents at a time.
iTunes, Google Play, and other downloading services also make a lot of money each year as people download songs, movies, TV shows, and apps, just one at a time. 99-cents here, $1.99 there.
This is a business model we all need to think about and see if it might work for us. Think about it: massive amounts of purchases being done one at a time. Low cost. Easy. Simple. People purchasing what they want in small doses. And it adds up.
There’s something about the psychological effect of spending our money in tiny increments that encourages us to spend more. If I asked you to spend $10 on coffee, you might scoff at me, but at $2 a day for five days, it seems to soften the blow.
Right now we’re in the process of moving, and I’ve already begun the stressful task of dealing with Comcast about moving (and decreasing) our service in the new home. I want to leave my current home, go to the new home, and be ready to go, particularly with Internet service. Seems simple, right? Turns out it isn’t so simple. And the great deals you see online are only available online. If I call on the phone, I get other deals that aren’t so great. And it’s not very clear what channels are available on which package.
When you download music from iTunes, you have the option of picking and choosing what you want. You can download an entire album, just a few songs, or just one song. Choose what you want. Why can’t we do that with cable and satellite television? I could list about 20 channels I might want, and hundreds I don’t want. Let me pick and choose and pay accordingly. I don’t have small children, so I don’t need any of the gazillion kids’ channels that they seem to think makes their service so attractive.
When you call Comcast, Dish, or DirecTV, it’s next to impossible to compare them because you’re not really sure what they are offering. The first service to figure out how to offer true a la carte service will be the winner.
Small. Simple. Customized.
This is why people love Netflix and Hulu Plus. One price, simple and sweet.
Don’t make me buy things I don’t want. Give me options, let me choose, keep it simple.
This won’t work for every business, but perhaps there are ways you can use this as you move forward. In what ways can you make it easier on your customers? How can you give them what they want in the simplest possible way? Perhaps bigger and better isn’t the answer. Perhaps you can be more successful offering smaller, simpler options.
Sometimes keeping things simple can turn your product into the best product. I’d certainly love to have back all the time I’ve spent on the phone and online trying to figure out my best Internet and TV options.
What are you doing to simplify your business and products? How are you trying to tap into this type of business model?