The last P.G Wodehouse book that I read inspired the title for this post. The connection pretty much ends there as we talk about paid membership sections on popular Social Networking sites and if someone would pay to get more in what essentially is a platform to keep in touch.

The base for this post comes from various discussions doing rounds these days about Social Networking Sites and their revenue-ability (yes I just coined it). It is evident from the numbers that sites like Myspace and Facebook are not scorching the ad revenue charts the way they used to before. The Eric dude from Google told his investors that Big G hasn’t figured out a way to properly monetize Social Networking Sites (the same goes for Youtube too actually but they are big on it..anyway).

This suggests a problem in the making. Prophetic Pundits of the web have already predicted doom for ad based revenue model for social sites. This prompted me to think just like many others might have thought already about converting the free members into paying ones and take advertising out of the picture.

The Paying Guest
A site like Facebook clicked not because it gave another option, but because it works. It works because its apps, the useful ones at least, takes networking to a whole new level, something I learned from the way Harshil was using FB, I mean it gave me a lot of ideas on how FB can be useful for my business networking and personal branding. Now if you talk about 2 percent of the 50+ million users who use would be willing to pay to use Facebook and are charged $10 a month, you are looking at a million dollars every month added to Facebook’s coffers.

In fact the idea is not new. Facebook had considered a premium membership plan last year. They had put a poll asking users if they would pay up $3.99 every month for ad free Facebook. The poll hung at an unfavourable ratio of 95:5 saying no they won’t. Despite the evident negative to the response, if you consider the quantity in question, FB could still have gone ahead with the project. 5 percent of 50 million (I don’t know the current membership levels actually) is a quarter million users and $4 every month they are still pulling in a million bucks a month almost.

Now I understand that 1 million is not as big a number as it might seem to us who don’t own properties like Facebook or Myspace, but we shouldn’t miss the power of the viral world and the business sense that a steady income brings in.

The fact that a quarter million or 250,000 people are willing to pay a price to network (or the fact that they can’t stand ads for that matter) can’t be ignored. And once they are in the system, we shouldn’t undermine their capability of bringing in other users as referrals, and they bringing in their set of referrals, not really an improbable scenario.

The system also gives Facebook a leverage with advertisers since they are not dependent entirely on them for a revenue.

The Peeps Want More
When we say premium, just not serving ads doesn’t quite seem appealing enough. Thinking out loud why don’t they have applications exclusively available for premium members, ad free ones. These apps can also be a driver for referral membership up sell.

Take it a step ahead, guarantee absolute privacy. The Facebook beacon and social ads propagate behavioral targeting, for which data from the users are collected. It had caused a furore on the web about privacy invasion and can therefore be a very good bait to increase memberships.

Not Just the Face, I Want Space

That is as corny a sub heading as a corn cob, but the idea is to extend the thoughts above on to MySpace. Can MySpace run on membership money? Can it offer people something that they would pay for?

I think they can. It’s all about building the value perception. MySpace is the cradle for a lot of budding artists. That is an audience willing to do anything to make it big and with a passion for what they do. Take them as privileged members and offer them more exposure than they can find. Take things offline perhaps in true Rupesh style of merging online and offline together to create an evangelist community. The biggest market after all for Social Networking Sites lie offline, the not yet converted mainstream audience.

Pimp ‘MyPage’

There is so much that MySpace can offer to their premium members. Custom layouts, ad share, make them part of MySpace exclusives.

One can even have additional features not available for regular users. Faster loading pages, better multimedia scripts and tools. Make them a Paris Hilton on MySpace..pampered.

How About Smaller Niche Networking

I somehow feel a paid model is not suitable for niche networks. It is important for their growth that they keep their services as accessible and open as possible. Moreover, niche sites with a targeted bunch of users can provide much higher conversions than a generic networking site. Like one of the articles that I read once mentioned, if you want to sell dog food go to dogster.

Marking the Words

Now all of what I said is nothing novel. It must be something that a lot of these bigwigs might have given endless thoughts and they might have seen things that I haven’t. However, that doesn’t undermine the possibility of such a model working its way up in the future. Or does it? Maybe you can shed better light on this one.

Bookmark this post to:

Related Posts

• WATBlog Exclusive : Orkut Introduces Applications, Other Minor Changes
• Social Networking Takes Over The World
• Global Social Networking Statistics - MySpace, Facebook, Orkut etc
• Life of A Social Media Junkie
• Facebook ropes in Mozilla VP & installs Live Search, while clearing off a few Controversies