I would even apply this frictionless sales model to the consumer web. We all know that the Internet is turning every media company upside down about worries of cannabalizing their existing business. It is clear that CBS gets it as they just announced that March Madness will be delivered free over the Internet. CBS will monetize it with ads. CBS is going open and understands this could potentially create new and additive revenue models, not less. Kudos to Larry Kramer for making this happen. Larry and I are on a board together and I look for more innovative and forward thinking ideas from Larry as he helps CBS embrace the web, not fear it. Think about the millions of users who will go watch the March Madness online and check for scores. Think about all of the cross promotion of new television shows on CBS, the additional ad revenue, and the general brand awareness that CBS will build from this. On the other hand, I was on the CNN site and saw this. Why would I pay $3 a month or $25 a year for CNN on the Internet when I can get it for free on the television? If you are a media company, go the CBS route and figure out how the web will help your business, not kill it. Be innovative, reduce the barrier to adoption for your customer, and figure out how to monetize your audience. Add more features, add community so your users can interact with one another, and leverage the web and its interactive, two-way nature. Don't just deliver me programming on the web and charge me for it.
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Ed Sim is founder of BOLDstart Ventures and co-founder of Dawntreader Ventures. Mr. Sim has over 15 years of venture capital experience having led seed and first round investments in a number of high profile Internet and software companies.
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Smart businesses are starting to realize that you can get a lot of traffic (and a lot of money) by giving something away for free. Really, it’s the same business model that has been around forever. It’s about maximizing the value or the experience of your customers. You don’t need to give away the farm, but it needs to be something of value. It’s a great way to get good PR and loyal customers. Just ask Tim O’Reilly.