pricing - ReadWriteWeb http://www.readwriteweb.com/feeds/tag/pricing en Copyright 2012 Richard MacManus readwriteweb@gmail.com Mon, 13 Feb 2012 19:17:22 -0800 http://www.sixapart.com/movabletype/?v=4.35-en http://blogs.law.harvard.edu/tech/rss Stop Whining About Netflix and Redbox Price Increases Netflix logo 150x150In the last few months, Netflix has lost 800,000 subscribers and Redbox is being accused of "pulling a Netflix" due to price increases. From the whining about Redbox and Netflix online, you'd think that the companies were demanding customers' first-born children.

The reality is that both companies have been entirely reasonable about pricing. In the face of market forces out of their control, both companies have put forward reasonable price increases. The reaction online, unfortunately, has been entirely out of proportion with the reality. People need to stop whining and do a little research before they lay all the blame on Netflix and Redbox.

]]> Redux2011.pngEditor's note: This story is part of a series we call Redux, where we're re-publishing some of our best posts of 2011. As we look back at the year, and ahead to what next year holds, we think these are the stories that deserve a second glance. It's not just a best-of list, it's also a collection of posts that examine the fundamental issues that continue to shape the Web. We hope you enjoy reading them again and we look forward to bringing you more Web products and trends analysis in 2012. Happy holidays from Team ReadWriteWeb!

In Defense of Netflix (Sort Of...)

I will grant you that Netflix totally botched its announcement about its price increases. And the Qwikster thing? That was like the New Coke of online service announcements. If you're not old enough to remember the New Coke debacle, Wikipedia can hook you up. But what it can't do is actually convey the taste of New Coke, which was horrible. It was sort of the haggis of soft drinks, but I digress...

But if you consider the cost increases that Netflix has been facing, there's really only one way its prices could go, and that's up. I actually applaud Netflix in that its reaction to being squeezed by the content providers was to raise prices rather than laying people off, which is a more typical corporate reaction. (Not that Netflix is innocent of layoffs entirely.)

Consider that when Netflix first launched its streaming service, it didn't bump the price of subscriptions. Last year, the company introduced a modest price bump of $1 a month for plans with the same number of DVDs plus streaming. That's $1 a month for a service that now accounts for 32.7% of Internet bandwidth. This tells me that Netflix users, at least some of them, are using the hell out of streaming.

Since then, Netflix has had to increase licensing payments to Starz, for CW content and others. Netflix is also producing original programming to feed the demand for content. In other words, the company's costs are going up, up and up. More money for content. More money for bandwidth. More money to create new content.

4yos.jpeg

Netflix isn't doing this out of the kindness of its heart, of course. I'm not saying that its users need to be thrilled about its changes, but the numbers of users storming off in a huff and sounding off online is completely disproportionate.

The folks who are complaining about the current streaming selection with Netflix need to understand, it's not like Netflix is just opting not to carry certain movies or TV shows. In some cases, the content providers (like HBO) won't license to Netflix at any cost. Others have priced themselves out of reach.

Alternatives and Pricing

One thing that seems to be missing entirely is a sense of perspective. A single DVD plus streaming account with Netflix will set you back a whopping $15.98 a month. Renting a movie with Redbox now sets you back $1.20 a night, up from $1.00. I don't know how many movies folks rent with Redbox on average, but if you rent 10 movies a month for one night your costs have "soared" by $2.00.

To put that in perspective, movie ticket prices in St. Louis (where I live) run anywhere from $5.00 for matinée showings to around $10.00 for weekend showings of 3D flicks. You have to multiply that by the number of people going to the theater, plus snacks, plus gas to and from the theater. Think of how much movie ticket prices have risen since Netflix introduced streaming, or since Redbox's inception.

Alternately you could look at the costs of cable or satellite. I don't think it's possible to get a reasonable cable/satellite package with decent movie channels for less than $50 a month.

Why People Are Over-Reacting

It's not entirely surprising that people are over-reacting to the price increases. Prices for goods and services go up all the time, but Netflix and Redbox have a few factors working against them.

First, they're fairly new services. They established pricing in new markets, and now they're having to readjust. The increases are taken out of proportion because there's nothing to compare against. The price of milk goes up, no big deal. If you rent, you expect that your rent will go up every year or two. When gas prices went up, local businesses raised prices accordingly, and people (mostly) took it in stride. But for some reason, people seem to expect the costs for these new services to remain immutable, or (magically) go down.

Secondly, the press has made a big deal out of the increases. Especially Netflix. Because both are national services with standardized pricing, it's obvious when the pricing changes. I've noticed the same effect with the price of stamps, despite being incredibly cheap to mail letters in the United States (compared to other countries) people get all bent out of shape over a few pennies for postage. But few people pitch a hissy fit when bread goes up by a few cents.

There's also the fact that a lot of people are really concerned about money right now. If the price increases had come at a different time, a lot fewer people would have gotten upset about it. Timing is not on their side.

Finally, the customer loyalty that Netflix and Redbox have is predicated on the fact that people feel that they're getting a great deal and good service. If people were less attached to the services, they'd not be as peeved now. It's weird, but we expect to get gouged by AT&T. Netflix wants more money? It's an outrage!

Blame Where It Belongs

If you really feel injured by the Netflix and Redbox price bumps, put the blame where it belongs. In this case, it belongs firmly at the feet of the content companies (in the case of Netflix) and the banks (in the case of Redbox).

The problem is, of course, it takes a lot more effort to actually punish the content providers or banks. So people cancel their accounts and/or stop renting from Redbox. This doesn't really hurt the guilty parties in the slightest. A weakened Netflix is exactly what the content providers would love to see. If it goes under, it's business as usual. Netflix stops disrupting their business models. If not, the company is in a weakened bargaining position because in the face of lost subscribers the company can ill afford to lose any more content deals.

The fees that banks see from Redbox, individually, probably wouldn't even be a blip in the banks' profits. They're wringing more money out of all merchants, not just Redbox.

Do what you want with your money, of course. If the content selection doesn't work for you, then it doesn't work. But the virtual fist-shaking and complaints that Netflix or Redbox are "gouging" customers are way off-target. I've never used Redbox, but I wouldn't stop using the service over its first price increase in eight years.

I'm keeping my Netflix subscription as-is, though. The company has, with the exception of the Qwikster debacle, earned my business. People should stop whining and reconsider whether they're really getting the bang for their buck. What do you think?

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http://www.readwriteweb.com/archives/redux_stop_whining_about_netflix_and_redbox_price_increa.php http://www.readwriteweb.com/archives/redux_stop_whining_about_netflix_and_redbox_price_increa.php 2011 Redux Wed, 28 Dec 2011 12:00:00 -0800 Joe Brockmeier
Startup Helps Small E-Businesses Stand Even With Amazon, Provides Pricing as a Service Black_Locus_150x150.jpgBusinesses can get almost anything they need "as a service" these days. Platform as a service (PaaS), software as a service (SaaS), mobility as a service (MaaS). A company called Black Locus out of Carnegie Mellon University has developed a service for automated pricing optimization and revenue management solutions for online retailrs. They are calling it pricing as a service (PraaS?).

BlackLocus is attempting to deploy advanced machine learning and revenue management techniques in a cloud-based service that would give small and medium businesses the same types pricing knowledge and advantages that industry leaders like Amazon deploy. Competitive product pricing for long-tail merchants online is a difficult goal to accomplish. Black Locus attempts to take the guesswork out of the process.

]]> "Though a combination of machine learning, image similarity, named entity recognition, and text-mining we find and match competitors for any product being sold in the web," said Black Locus CEO Rodrigo Cavalho in an email to ReadWriteWeb. "Using our Price and Revenue Management Intelligence system we provide optimal pricing, and integrate with an e-tailer's shopping cart platform to allow our clients (online retailers) to quickly and easily adjust prices and significantly increase sales."

Black Locus claims that it has been able to boost its clients' profits by 15% through the use of its platform. It is an innovative idea and one that could have legs. Essentially, it is a SaaS offering aimed at the under-served middle of the online e-commerce market that brings in pricing information across the Internet to the merchants fingertips. The company just raised $2.5 million in Series A funding from DFJ Mercury and Silverton Partners.

"The rapid growth of online commerce has created terrific opportunities for both large and small online retailers," said Blair Garrou, managing director of DFJ Mercury, in a press release. "Our firm was impressed with the BlackLocus team and believe their cloud-based pricing optimization tools level the playing field for small and mid-sized online retailers."

Black Locus takes stock of pricing and inventory levels and delivers recommendations to the merchant in terms of what they should price their products and how to position them.

There has been movement recently in aggregating data in the realm of e-commerce. The more data that companies or individuals have, the better they are positioned, especially when it comes to any type of sales vertical. Project Slice recently launched as a service that aggregates users purchase receipts (and can be found in a featured tab in Yahoo Mail). Black Locus is reminiscent of the same type of data aggregation as Project Slice. It is difficult to take disparate sources of information and drag them into one location tailored to the needs of the user. Black Locus is on that road for small and medium businesses, bringing usable data to the masses.

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http://www.readwriteweb.com/archives/startup_helps_small_e-businesses_stand_even_with_a.php http://www.readwriteweb.com/archives/startup_helps_small_e-businesses_stand_even_with_a.php E-Commerce Thu, 07 Jul 2011 14:00:00 -0800 Dan Rowinski
Motorola Xoom Ad Reveals Pricey iPad Competitor An advertisement from Best Buy appears to show the highly anticipated Google Android 3.0-based tablet, the Motorola Xoom, with a starting price of $799.99 - or $300 more than the least expensive iPad on the market today. What's worse, the ad also says that it requires the purchase of a data plan through Verizon Wireless, even for those who want to just use the Wi-Fi connection on the Xoom.

Does this decidedly uncompetitive price point spell doom for one of the most popular gadgets from this year's Consumer Electronics Show (CES 2011)? Did the Xoom just go from great Android tablet hope to also-ran?

]]> Xoom Was to Be Android 3.0's Flagship Device

The news comes by way of the blog Engadget, which uncovered evidence of a Feb. 24 launch for the Motorola Xoom at Best Buy by way of a leaked advertisement. To be fair, there's no way to verify the ad is legit at this point, but Engadget says that the price agrees with some of the earlier leaks about the tablet, supposedly from Verizon's own internal systems.

The reason this pricing leak is such a big deal is not only because of Xoom's pre-launch popularity, but also the fact that it is the first tablet to run Google Android 3.0, the tablet-optimized version of the Android mobile operating system, which already powers a number of popular smartphones like the Motorola Droid, the Samsung Galaxy S, HTC Evo and dozens of others.

With Android 3.0, code-named "Honeycomb," Google introduced several user interface changes to the OS, transforming it into an exciting and interesting alternative to Apple's iPad and iPhone operating system called iOS. In Honeycomb, there are 3D homescreen widgets, a revamped multitasking interface involving a launchable panel of recent apps, built-in video chat from Google's GTalk, improvements to notifications and much more.

After January's CES 2011 event, the Xoom had even won accolades from several high-profile tech outlets including CNET, PCMag, Engadget, Gizmodo, BGR, LaptopMag, PopSci, Popular Mechanics and others - it was the tablet that "won" CES.

iPad Competition? Not at This Price Point

But at $800, Xoom's launch may not go as well as some had hoped. In addition to the hefty price tag, those who just want to use the tablet as a Wi-Fi device still have to pay for a one-month data subscription with Verizon before they can even activate the Wi-Fi feature.  In comparison, Apple sells the Wi-Fi only iPad for $499, no subscription required. And Apple may be about to launch the iPad 2, according to the Internet rumor mill. Who knows what new price points Apple will reveal at that time?

On the flip side, there's a bit of hope left for Xoom zealots: the ad, as of yet, has not been verified, and there's still the possibility that this is just some sort of Best Buy/Verizon promotion. A less expensive Wi-Fi only Xoom could be sold elsewhere...maybe.

Motorola's Xoom website went live last night, coinciding with the airing of its Super Bowl commercial. The commercial touts the tablet as a breath of fresh air in world where pod-people wearing white earbuds are the norm. Unfortunately, at $800 the tablet could end up as representative of the exclusive, expensive and elitist toys collected by tech's early adopters - ironically, the same image Apple has fought off for years. Meanwhile, the iPad becomes the tablet computer of the everyday man, woman or child.

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http://www.readwriteweb.com/archives/motorola_xoom_ad_reveals_pricey_ipad_competitor.php http://www.readwriteweb.com/archives/motorola_xoom_ad_reveals_pricey_ipad_competitor.php Apple Mon, 07 Feb 2011 07:15:22 -0800 Sarah Perez
4G May Cost More, Says Verizon Verizon is considering adjusting its data plan pricing as it prepares to launch its next-generation 4G wireless network. Not only will the network price data plans based on the amount of data consumed, it may also price data plans based on the speed of the connection itself.

"If you want to pay for less speed, you'll pay for less speed and consume more, or you can pay for high speed and consume less," Verizon CFO Fran Shammo told The Wall Street Journal in an interview, explaining the possibilities offered by the new pricing.

 

]]> Verizon's 4G network is set to debut in 38 cities around the United States by year-end offering speeds between one and 12 megabits per second of data. (It's not true 4G, which would require downloads of 100 Mbps). However, the actual pricing for the new higher-speed connection is still not yet determined.

More Tiered Pricing

Currently, Verizon is testing a low-end $15 per month promotional pricing plan which will be offered through the end of December. The plan provides 200 megabytes of data, limiting the number of downloads, emails and Web-enabled apps customers can access.

And as the company rolls out its 4G network, it plans to move further into tiered pricing in order to give its customers more options of how much (or little) they want to pay. This doesn't necessarily spell the end of Verizon's unlimited data plans though, Seidenberg said. "We need to get into it, figure out what the customer thinks is fair, and go from there," Seidenberg explained in a WSJ interview.

LTE Devices on Their Way

He also said that Verizon will introduce a number of new devices supporting the LTE technology at the upcoming Consumer Electronics Show in Las Vegas, but would not comment on whether or not any of the new devices would include a Verizon iPhone. "If the iPhone comes to us, it's because Apple thinks it's time," he said. Seidenberg also mentioned that Verizon's LTE network has drawn Apple's interest and helped the company get the iPad on its network.

Verizon thinks its 4G network will lead to an explosion of data consumption on mobile devices, and, by 2016 or 2017, estimates that 30% of its customers will use a GB of data per month. That's a more conservative estimate than independent wireless analyst Chetan Sharma predicted earlier this year. He said that the average customer will consume 4 GB of data per month within three years. It seems tiered pricing functions as a roadblock, attempting to slow down the level of data consumption we would otherwise see.

There are arguments both for and against tiered pricing plans. On the one hand, tiered plans allow for more low-end options through the introduction of data caps. That means people who couldn't have otherwise afforded it, now have the ability to own a smartphone. However, consumers don't have a clear grasp of what a megabit, megabyte or gigabyte of data is nor how much data is associated with using a particular function -like a download, using an app, surfing the Web or checking email. One could easily argue that they shouldn't have to know the difference - the carriers should simply offer affordable unlimited plans as anything else will hamper real-world adoption of smartphones and their capabilities. In other words, if you don't know how much data you use, you'll always be worried about going over and being charged. The easiest solution is to not use data much at all.

At least the option to pay for 4G would be clearer: pay more for faster speed or don't.

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http://www.readwriteweb.com/archives/4g_may_cost_more_says_verizon.php http://www.readwriteweb.com/archives/4g_may_cost_more_says_verizon.php Mobile Thu, 18 Nov 2010 07:24:53 -0800 Sarah Perez
Best Buy-Funded Tecca Launches New Comparison Shopping App for Electronics Tecca, a new mobile comparison shopping application, is the first company to launch from the digital media fund set up by electronics retailer Best Buy with Fuse Capital. The app focuses only on electronics, which makes sense, given its backing. Available now on both iPhone and Android with both a tablet app and mobile website in the works, Tecca offers pricing information, ratings, reviews and even a barcode scanner.

]]> Ross Levinsohn, Tecca chairman and managing director at Fuse Capital, describes the app as a free "virtual concierge." It includes an editorially selected, curated collection of product reviews pulled from around the Web, enabling consumers to "make confident decisions about personal technology and electronics, whether they're purchasing new products or making the most of the devices they already own," he says.

How Tecca Works

To use the newly available smartphone applications, you just aim the phone's camera at a barcode and scan, or you can search or browse through product selections instead. Once you have a particular product pulled up, you can delve further into detailed descriptions, read reviews and view user ratings. You can also access a slide show of product photos, find out what's included in the box, read product specs, add items to a wishlist or even buy directly from within the app itself.

But perhaps the app's most important feature is price comparisons. According to the app's description in iTunes, Tecca will compare prices between "top-rated online retailers." Obviously, one of the retailers consistently listed throughout the app is Best Buy. On some occasions, for example, within the laptops section, we found that Best Buy was the only retailer listed, or was only one of two. It's hard to say if that's just because the app's pricing database is still in the process of being built or if the app is designed to promote Best Buy and its exclusive deals more than its competition.

That said, assuming you are shopping at Best Buy, as many do when looking for electronics, the app would definitely come in handy, especially since blue-shirted staff members are almost always busy when you need them, but are never busy when you just want to quietly browse alone. Tecca would at least let you get some of your basic questions answered without a salesperson's help as you're struggling with your shopping decisions.

The app itself is well-designed - navigation is simple and straightforward, fonts are large and easy-to-read and there are useful filters and sorting mechanisms tucked away that let you quickly and easily refine your results.

Tecca's Competition

Tecca goes up against a number of other barcode-scanning and price comparison engines, including Microsoft's Bing app, Amazon.com's mobile app, RedLaser and ShopSavvy to name a few, the latter which helps you compare prices both online and locally. But Tecca's limited focus, design, ease of use and feature set make it worth the download for serious shoppers. It may not always find you the best deal, but for general fact-finding purposes, it does quite well.

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http://www.readwriteweb.com/archives/best_buy-funded_tecca_launches_new_comparison_shop.php http://www.readwriteweb.com/archives/best_buy-funded_tecca_launches_new_comparison_shop.php Mobile Wed, 22 Sep 2010 06:56:13 -0800 Sarah Perez
SlideShare Lets Users Go Pro With Freemium Pricing slidesharelogo_aug10.jpgFor many new Internet companies these days, "freemium" business models that hook users with free services and offer extra functionality at a price have become very popular. Today, presentation sharing service SlideShare is the latest to switch to this type of model with the announcement of its tiered PRO plans with new and advanced features starting at $19 per month.

]]> SlideShare, which currently sees over 30 million visitors each month, has been growing in popularity among corporations that want to share presentations, videos and other business related materials. The service's three tiers of PRO service have been created for these users, from individual business pros to large enterprise corporations, based on their feedback.

slideshareplans_aug10.jpg

The lowest tier, "Silver" is aimed at business professionals and offers tracking analytics, ad removal and 30 lead captures a month for $19. "Gold" subscribers will receive 70 captures as well as the ability to custom brand their channel home for $49. And finally for $249, "Platinum" enterprise subscribers can gain access to an unlimited number of lead captures, and have the added control functionality within their channel to moderate things like comments and transcripts.

Previously, SlideShare users could pay to use the site's lead capture functionality, but only on a per lead basis. SlideShare had success on this micropayment model, but the desire to add more PRO features made the decision to go freemium an obvious one for the company.

The company is thinking about the future, SlideShare CEO Rashmi Sinha told ReadWriteWeb.

"It allows us to keep building our community with a compelling free offering, and to layer on advanced functionality that helps businesses and professionals get the most out of SlideShare," said Sinha.


The features have been privately tested in beta with 125 companies for roughly a month and a half, and many large brands are making great use of the features. Dell, Microsoft, Cisco and Pfizer are among some of the early adopters, and Sinha says many of these companies have already started using the service more because of it.

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http://www.readwriteweb.com/archives/slideshare_lets_users_go_pro_with_freemium_pricing.php http://www.readwriteweb.com/archives/slideshare_lets_users_go_pro_with_freemium_pricing.php News Mon, 16 Aug 2010 09:00:00 -0800 Chris Cameron
Should You Buy the EVO? Pros and Cons of the Next Big Android Phone Forget the Nexus One, Google's failed attempt at marketing its own "iPhone killer" via the web - the next big "Google Phone" is definitely going to be HTC's EVO, the first 4G Android smartphone to hit the U.S.

Arriving June 4th on Sprint, the EVO comes with a loaded spec sheet that includes everything you could possibly want in a smartphone and then some: 4G, a built-in mobile hotspot, dual cameras, HDMI output, FM tuner and more.

But is the EVO being over-hyped or is it worth the price? We examine the pros and cons.

]]> When we first heard about the upcoming HTC EVO 4G, announced at the CTIA conference earlier this year, it sounded like the perfect Android device. Not only does is it a 4G phone (via Sprint's WiMAX, a next-generation cellular network), but it includes so many incredible specs, it was downright impossible for gadget junkies not to drool over the device.

But the reality is here, and by reality, we mean pricing plans. And the EVO is not cheap.

Pros

The pros list is easy - it's a list of what the EVO offers:

  • 4G (via WiMAX)
  • 1 GHz Snapdragon processor
  • 1 GB built-in memory
  • 512 MB RAM
  • Wi-Fi
  • 4.3-inch screen
  • microSD card slot
  • 720p video recording and playback
  • HDMI out to your HDTV
  • 8.0 megapixel camera
  • 1.3 megapixel front-facing camera
  • Mobile hotspot capability for up to 8 Wi-Fi enabled devices
  • Visual voicemail
  • Live video sharing via Qik
  • FM tuner
  • Social networking integration and access to Android Market's 30,000 plus apps
  • Sprint apps (Sprint TV, NASCAR Sprint Cup Mobile)
  • GPS, compass, proximity and motion sensors
  • Option to pick either the HTC Sense UI or the stock Android experience

Cons

As for the cons, there aren't many when it comes to the phone's specs. Some may find the phone's built-in kickstand (which allows you to prop up the phone to watch video) a design flub. It may also be a part that could easily break. But mostly, liking or not liking the kickstand is a point of personal taste.

Others will cheer for EVO's ability to run Adobe Flash, a capability Sprint touts as "a full, no-compromise Internet experience." However, this feature could also be seen as a detriment, potentially eating up battery life and overworking the CPU. Plus, Hulu, one of the major holdouts when it comes to Flash, isn't switching to HTML5 video anytime soon. And Hulu is blocked on mobile devices anyway. That means no Hulu on the EVO, sorry.

But the biggest con may be the way Sprint has chosen to price the EVO's data plan and services.

According to Sprint CEO Dan Hesse, who finally revealed pricing at a special event last week, the phone will be available for $199.99 (after a mail-in rebate) with a two-year contract.

Pricing

To use the data service on the phone, you'll need Sprint's "Everything Data Plan," which starts at $69.99 per month.

However, if you want to use the 4G data, you have to pay an extra $10 on top of your data plan. Those who do so have access to unlimited 3G data, too, but it still feels a bit like nickel-and-diming to charge extra for what's arguably the key selling point of the phone. Why not just build it into the base price?

What's more, if you want to share your phone's data connection via the EVO's Wi-Fi hotspot feature, that's another $29.99 per month.

Given these prices, the EVO is not the cheapest option among today's smartphones ($69.99 + $10 + $29.99 = $109.99), but it's not the most expensive either. One thing to note, though, is that the $69.99 "Everything Data Plan" only includes 450 Anytime Minutes. If you want more minutes, you can choose the next step up - 900 minutes for $89.99. Now the phone is starting to get a little pricey ($89.99 + $10 + $29.99 = $129.99). Can you still afford it?

4G Coverage

Then there's the fact that many are still without 4G coverage. (You can check Sprint's 4G cities list here.) Clearwire, a Sprint partner who's building out the 4G service, recently announced that 18 more cities would be getting 4G by the summer, but some of the larger cities (including N.Y, L.A., San Francisco, etc.) are still waiting. (You can see the complete list of Clearwire cities here). Is the price still worth it if you don't have 4G?

Getting the Rebate

Another con: a mail-in rebate if you buy directly from Sprint. A better option is to head into a Best Buy or Radio Shack store instead where you can receive the $199.99 price immediately. Radio Shack even offers a free $20 gift card which can be used towards buying accessories when the phone arrives on the June 4th. (OK, that could be a pro).

Worth It?

Given the expense of owning an EVO, it's now less of a sure thing for those looking for a new smartphone plan with the most minutes. The EVO offers a lot of great features, but they're not coming cheap by any means, although that's true for most smartphones.

And there's one more concern, too. How is Sprint handling the Wi-Fi hotspot plan when this very feature is rumored to be included in the next version of the Android OS? Will they cripple the phone's ability to upgrade?

We asked a Sprint representative this question and they simply referred us the phone's spec sheet. When we followed up to reiterate the question, we received no response, not even a "no comment." That's a bit concerning.

Still, all this being said, the EVO looks like it will be a great device...but maybe just for those that can afford it.

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http://www.readwriteweb.com/archives/should_you_buy_the_evo_pros_and_cons.php http://www.readwriteweb.com/archives/should_you_buy_the_evo_pros_and_cons.php Google Tue, 18 May 2010 08:58:50 -0800 Sarah Perez
Wolfram Alpha's $50 iPhone App: Too Expensive or Worth the Extra Money for the Premium Experience? wolfram_alpha_logo_may09.pngWhen Wolfram Research released its iPhone app for Wolfram Alpha earlier this week, most of the attention quickly shifted away from the features of the app itself and towards the high price of the app. At $49.99, Wolfram Alpha is far more expensive than most apps in the App Store today, where only a small number of highly specialized apps sell for more than $9.99. Today, we got a chance to discuss Wolfram's pricing strategy with Schoeller Porter, the product manager for Wolfram Alpha's iPhone app.

]]> Early Reactions

On Twitter and in the tech blogosphere, the reactions to the app's price were anything but subtle. We called it "too expensive" ourselves, though others had stronger words for it. MIT's Technology Review called it a "a pricey online calculator for geeks" - a product that's more like the expensive but immensely powerful Mathematica than Stephen Wolfram's original idea for Alpha ("Wolfram|Alpha aims to bring expert-level knowledge and capabilities to the broadest possible range of people").

It is worth noting that the Wolfram Alpha app quickly appeared in the list of top 100 grossing apps in the iTunes App Store (iTunes link) and has been hovering at the lower end of the top 50 ever since. That doesn't make it a breakout hit, but some people are clearly buying the app, even though only a small number of users have left reviews.

alpha_iphone_vs_web_app.jpg

A Premium Price for a Premium Experience

There can be little doubt that the Wolfram Alpha team was expecting some backlash. As Porter told us today, the Wolfram Alpha team decided to price the app with the cost of a hardware graphing calculator in mind. At $50, the app costs roughly half of what a hardware calculator would cost. As Porter also stressed, the app offers a far superior range of features thanks to its connection to Wolfram's server farm. The company thinks this price is justified because of the superior experience of using the app over the mobile website.

After using the app for a few days, we definitely have to agree there. The dual-keyboard solution makes entering queries in the app much easier than using the mobile site and accessing Wolfram Alpha from the app is also much faster then using the mobile site.

Porter noted that Wolfram is trying to set itself off from the mass of $0.99 apps that only get used once and are quickly forgotten. Instead, the company hopes that the app will become a regular companion for its users, whether they are using it for help with their homework in school or college, or in their professional life.

At the end of the day, this is an app for specialists. While Schoeller Porter worded this more carefully in our interview today, the basic fact is that Wolfram is charging a premium price for a premium experience. Users who don't need the app can continue to use the website, while those who are willing and able to spend $50 on the app will get a superior experience. For the time being, Wolfram doesn't expect to bring the price of the app down and so far, according to Porter, the team has been happy and excited about how the app has been performing in the marketplace.

The Price of iPhone Apps

This also leads into a broader discussion about the current pricing in the iPhone App Store, where even the most complex apps and games have to sell for under $10 to reach a wide audience. At the end of our discussion, Porter noted that the Wolfram app may lead to some changes here, though we have to wonder if anything is likely to change the current drift towards lower prices in the App Store.

It is also worth pointing out, though, that a lower price point opens up the market for an app to a far wider audience - often to the point where the lower price brings in exponentially more users and more than offsets any potential losses from the lower price.

What Do You Think?

Is Wolfram's price point for the iPhone app a bold move? Hubris? Or would you be happy to pay $50 for the superior experience and ergonomics of the app?

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http://www.readwriteweb.com/archives/wolfram_alphas_iphone_app_simply_too_expensive_or.php http://www.readwriteweb.com/archives/wolfram_alphas_iphone_app_simply_too_expensive_or.php Trends Fri, 23 Oct 2009 12:44:42 -0800 Frederic Lardinois
How to Price Your iPhone App appsfire_iphone_sept09a.jpgWhen Smule's Ge Wang, Lyricfind's Darryl Ballantyne and Tapulous' Bart Decrem got together to discuss mobile applications at the San Fran Music Tech Summit, the hottest subject was application pricing. While music publishers have searched far and wide for better monetization strategies, few facets of the business have shown the same revenue growth as mobile apps. Thanks to the iPhone, customers are used to paying for mobile applications and according to Appsfire, all but one of the top grossing apps is priced above $2.99.

]]> Appsfire recently released a list of the top 50 grossing apps in the App Store and the results are surprising. Based on a sample compiled from 1200 devices and calculated using a UNITS SOLD x UNIT PRICE formula, only Flight Control is priced as low as 99 cents.

appsfire_iphone_sept09.jpgApplications such as multi-surveillance video feed app iRA Pro ($899.99), mobile podcasting application Poddio (149.99) and TomTom's Western European navigation app ($139.99) are the list's most expensive products. Meanwhile, more well known apps like Tweetie ($2.99), Midomi's music identifier ($4.99) and Air Sharing ($4.99) are more moderately priced at the low end of the spectrum.

Says Appsfire, "If your app brings something real to the table, be it a game or a utility...then price it accordingly. The price is right when there is a salary at the end of the month. Don't succumb to the temptation of the 99 cent app, it's a lure and only serves to feed the get-rich-quick fairy tales that even kids would find hard to believe."

Developers should remember to calculate Apple's percentage into the pricing structure as well as the fact that the top downloaded apps are not necessarily the top grossing applications. To see the complete list of top grossing apps check out the Appsfire release.

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http://www.readwriteweb.com/archives/how_to_price_your_iphone_app.php http://www.readwriteweb.com/archives/how_to_price_your_iphone_app.php Apple Tue, 08 Sep 2009 19:00:00 -0800 Dana Oshiro
Hitwise: Twitter Drives Traffic to Blogs and Social Networks, But Not to Retail Sites twitter_logo_Jan_09.pngAccording to the latest data from Hitwise, Twitter sends most of its traffic to Google, Facebook, TwitPic, and MySpace. Overall, Twitter sends about 1 in 5 users to social networks and another 1 in 5 to entertainment sites like Twitpic, YouTube, or Flickr. Even though some people think that Twitter is just a 'poor man's email system,' Twitter's clickstream profile is very different from that of most email services.

]]> There are a number of interesting results in Hitwise's study. Among others, Hitwise notes that a higher share of downstream clicks from Twitter.com go to blogs and personal websites than from search sites, social networks, or email services. A larger number of Twitter users are also being sent to news and media sites, which points towards Twitter's growing role as a medium for sharing and breaking news stories.

hitwise_twitter_downstream1.png

twitter_downstream2.pngAnother interesting fact about the downstream clicks from Twitter is that very few users go from Twitter.com to retail, business, or finance sites.

Here are a few other interesting findings:

  • after visiting Twitter.com, more users visit Etsy.com, the marketplace for buying all things handmade, than Amazon
  • in terms of downstream clicks, CNN.com is the most popular news service on Twitter
  • Yahoo Mail gets more downstream clicks than Gmail or Windows Live Mail

One caveat about this data that Hitwise does not mention, however, is that a large number of Twitter users never even visit Twitter.com because they use more fully-featured desktop or mobile clients like Twhirl, TweetDeck, or Tweetie. Hitwise obviously doesn't have access to this data, but it would be interesting to see if those Twitter users who use a Twitter client exhibit a different behavior compared to those who use the web site.

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http://www.readwriteweb.com/archives/hitwise_twitter_downstream_traffic.php http://www.readwriteweb.com/archives/hitwise_twitter_downstream_traffic.php News Thu, 12 Mar 2009 10:30:14 -0800 Frederic Lardinois
Hulu Could Bring The Social Graph to Millions Red hot TV and movie site Hulu has added a major new feature this morning on the one year anniversary of the site. Logged in users are now able to securely pull in their list of contacts from Facebook, Google, MySpace, MSN and Yahoo. The company calls it "Hulu Friends." Though some skeptics have questioned the impact of social video watching, this kind of move is exactly what we've been hoping all sites around the web would do.

Identity providers are now making it easy for 3rd party content sites to turn content consumption into a social activity. From real-time conversation to recommendations, there's a whole lot of potential here. That said, we do have some concerns about Hulu's implementation.

]]> Hulu's addition of our social networking contacts, their profile information and in some cases their activities, collectively referred to as the "social graph," is important for a number of reasons. There is so much user data available online and so much network effect left untapped that this kind of move seems like a no-brainer to us.

It's notable as well that Hulu didn't build its own social network from scratch. That would have been a waste of resources. Instead it is leveraging already established social networks elsewhere.

The most important consequence of the announcement may be that the OAuth protocol used to securely access social networking data without requesting a user's password is now being placed in front of millions more people than it has been before. That's good news.

Concerns About Hulu Friends

On the other hand, it's sad that the OpenID community remains small enough to be left out in the cold by Hulu. In theory the site should be able to add an OpenID login button to its list and pull in standard Friend of a Friend data from any identity provider at all.

Barb Dybwad at Obsessable wonders whether Hulu Friends is actually a reason for Hulu to be less "friendly" with other social video platforms that want to play Hulu content in their communities - specifically Boxee.

Finally, we're concerned that Hulu Friends isn't being featured very prominently on the site. It takes a few too many clicks to get to the friend syncing page on Hulu. We're not seeing Hulu activity pushed out to social network activity streams, either. In fact, it looks like Hulu is using the legacy Facebook API, not the fancy new Facebook Connect. Is the company being overly cautious about Hulu Friends? If they are, its limited adoption could become a self fulfilling prophecy.

All in all, though, we feel positive about Hulu Friends. We hope the company innovates on top of the idea and makes more moves towards integration with the open web.

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http://www.readwriteweb.com/archives/hulu_friends_impact.php http://www.readwriteweb.com/archives/hulu_friends_impact.php NYT Thu, 12 Mar 2009 10:13:37 -0800 Marshall Kirkpatrick
Would You Pay $200 for an Android App? Android Market Preps Priced Applications Android Market BagThe Android Market was designed to be the one-stop shop for all G-1 users to download applications for their mobile handsets. As such, it had a great deal in common with the Apple iTunes App Store - save for one specific feature: the ability for developers to charge for their apps. Now, even that feature will be common between the two application stores as the Android Market prepares to release support for priced applications.

]]> Developers from the United States and the United Kingdom can begin uploading applications and pricing information in preparation for the US launch, which is scheduled to open in the middle of this week. The pricing for applications can range from $0.99 to $200.00 US or 0.50 to 100 GBP. The Market will use Google Checkout for its payment mechanism. Developers will be charged 30% of the purchase price as a transaction fee.

Based on the performance of iPhone apps, it's highly likely that we'll see more applications aiming for the lower end of that pricing spectrum than the upper end. But it will be interesting to see if any developers choose to charge a premium price - which isn't nearly as ridiculous as the App Store's $999.99 threshold - for their development efforts. Thankfully, according to the Market, "Once you've set a price for an application, you may choose to change it at any time."

The option of listing priced applications is currently only available to developers in the US and the UK. However, developers from Germany, Austria, Netherlands, France, and Spain are slated to be allowed access to sell applications before April 2009. The Android Market hints at additional countries being added before the end of Q1, as well.

In related news, Australia developers just gained the opportunity to upload free applications. Singapore developers will soon have similar options.

For more information on uploading priced apps or purchasing them, visit Android Market support.

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http://www.readwriteweb.com/archives/android_market_priced_applications.php http://www.readwriteweb.com/archives/android_market_priced_applications.php Google Mon, 16 Feb 2009 00:30:00 -0800 Rick Turoczy