Why We Made LockerPulse Completely Free

We’ve done away with the Premium Accounts on LockerPulse and have instead moved to an ad-supported model. This was something we had discussed for a long time, even prior to launch, and knew might be the best path for success for the site. The #1 factor in the decision was simply that the limited ads that we’ve tested out have performed surprisingly well, while the Premium Accounts have tailed off after a promising start. Being featured in the Chrome Web App store gave us an additional wave of data and feedback to help make the decision easier. We anticipate launching our own ad-serving platform by the end of February. Just doing the math out with the available ad slots and current ad click-through-rates makes it look like it will be a wise decision, although only time will tell.

There are definitely no regrets to taking this approach though. We have a lot of success with the freemium model on SportsLizard, and going back a few years it worked pretty well on iPrioritize. There are also plenty of successful freemium web apps in the business-to-business arena. We knew this industry was different, but it was still worth taking a shot. The overwhelming consumer expectation is not to have to pay for news of any sort, even if our software makes it more efficient, easier to discover new news, etc etc. Right or wrong, that’s just the way it is. I love the free and open web, so you won’t hear me complaining. Plus, this doesn’t mean that we can’t charge for features in some capacity down the road. It just means that the functionality we have now will be available for free.

There were a few other important factors. We have worked out a lot of technical kinks. It takes a while with a site of this magnitude. We have almost 800k stories in our system right now. Every step, from “polling” RSS for new stories, to delivering them to our users, has needed a lot of work. We also had plenty of server issues early on. Not that things are perfect now (far from it), but we have enough information to say pretty confidently that we could handle a large influx of users. The pay wall indirectly acted as a barrier to slow down growth.

And finally, we have a lot of good momentum with LockerPulse right now. The Chrome Web App store brought in a lot of new people. Our widget has been very well received and is starting to drive us traffic. It’s rare that a day goes by without someone telling us how much they love the site, and without multiple site owners asking to have their blogs included on our site. There’s something to be said for keeping that momentum rolling. With George leaving the company last month, we’ve had to reshuffle everyone’s responsibilities. I’ve become more involved in Detailed Image on a day-to-day basis than I was before. I’m really excited for all of the projects I’ve taken on, but that does mean that LP development will slow a bit. Features that we anticipated might come out in the Spring now might be pushed back to the Fall. Had we kept the pay wall up to wait to see if college teams or fantasy sports features pushed our subscription rate over the edge, we risked losing almost an entire year of growth if we were wrong. Now, every single day we’ll be building our user base, collecting data and feedback, and slowly increasing our ad revenue.

I’ve been itching for a few weeks now to make this happen. I’m glad that it’s done, and looking forward to seeing how LockerPulse grows from here.

9 comments on Why We Made LockerPulse Completely Free

  1. Dale says:

    Was looking for an explanation on this blog as soon as I saw the notice! Not a bad way to go for numerous reasons. 1. It’s easier to lower prices than to raise them. 2. You get some quick revenue to start 3. You limit your traffic a bit until you can get your servers tested out.

    Congrats on your new direction!

    • Adam McFarland says:

      Thanks Dale. Your point about it being easier to lower prices than to raise them is also something I should have mentioned. We kept saying that all along. I think we went into it thinking that we could end up going either way. If the premium accounts worked better, we would have stuck with them. It’s not as if we planned this all along, but it’s also not something that’s a complete 180 without having been thought through.

  2. Darrin says:

    Adam, I don’t see any ads? Am I missing something? But great idea. I’m learning myself that publishing in the sports niche is incredibly difficult to monetize, but not impossible.

    • Adam McFarland says:

      Darrin – we only have ads in a few select spots right now. We were testing AdSense just to get a baseline. We’re working on a “customized” ad platform that combines affiliate links from eBay, Amazon, and some of the official league sites. We’ll serve ads based on the user’s browsing habits, what they’re viewing, where they’re located, and what they’ve clicked on before. This is another factor I didn’t mention in the post – we’ll be able to serve the best ads to the people who we know the most about, so the more users, the better we’ll do with ads. Hopefully in the next few weeks it will be up. I’ll definitely be doing a post about it once complete.

  3. Rob says:

    At the end of the day, you had to pick one option to start with. I think picking the freemuim model first was the right move – for the reasons outlined above and so that you knew whether it worked for you or not. From what I can tell, the majority of freemium webapps are for businesses – cms, crm, ecommerce, accounting etc. and very few are for personal use.

    Are you approaching advertisers individually or using an existing ad network? Does this affect the status of licences you have with the news sources so that you can use the feeds?

    • Adam McFarland says:

      Right now we’re not approaching advertisers…we’ll be using a hybrid of various affiliate programs, primarily Amazon & eBay. I think where we can improve on say, a generic eBay link, is that we can show someone tickets listed on eBay based upon their browsing habits, location, and click history. The more data, the better we can target. We’ve had pretty good luck with a simplified version of this type of thing on SportsLizard. The nice thing with sports is that there are a lot of different things to push – tickets, memorabilia, clothing, books, dvds, and more.

  4. […] show it, and when to show it. We’ve (predictably) seen a lot more sign ups come through since making the site completely free, which will help us gather even more data. The more active the user, the better ad we’ll be […]

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