WidgetLaboratory

A LAB member asked us the following question today:

I learned that PayPal does not allow transactions for sexually oriented digital goods. What plans does WL and SG have to make it possible that adult social networks on SG will be able to monetize?

This provided us with a little excuse to rant-on about our favorite topic... MONETIZATION. Our answer to him is below:

While PayPal does not allow use of their product to directly sell digital goods, it does not currently prohibit the creation or use of a subscription widget that is universal in nature and allows one to control access to a website. Therefore, for social network subscriptions... PayPal still appears to be a viable option.

Whether PayPal would choose to go after individual sites that contain adult content and who chose to utilize such a subscription widget/tool to control access to their site... well.... this is still a grey area, and their actions to date seem to indicate that they have a "don't ask/don't tell" attitude. Who really knows?

We're at a crossroads in the Internet World between the Puritanical fairy-tale of the old-school overlords such as Google/Ebay and the reality-check of recessionary forces that will bring the necessity of monetizing adult content into the mainstream. As I recall, Prohibition in the US was a failure because everyone figured out how to sell booze illegally and the government finally realized that it was more profitable to tax the hell out of liquor sales than it was to try and prevent or stop it. We're pretty confident that PayPal and Google, et al, will also "wake up" to this reality as well... just give them one or two breakout competitors in this field...

Speaking of which: Don't believe for one minute that PayPal is the only fish in the sea. There are dozens of other payments methods that can (and might) be made available to work on SocialGO as well as in WidgetLaboratory's secret "Project X"...

Besides the well-known adult gateway services such as CCBill, there are also numerous Cell Phone, Home Phone, Pre-paid card, Virtual currency, and other methods for accomplishing the monthly subscription as well as the up-selling of goods and services on a social network (or on "Project X").

All it takes is to be brave, bold, logical and creative.... all the things that are presently GONE from Silicon Valley during what we are calling the "MUSICAL CHAIR GAME OF 2008". This is the moment that all the sheep have looked at each other and realized that they never HAD any business-model, because the Freemium model was always a giant Ponzi scheme. All of them have been hoping to get bought out before they ran out of cash or were discovered to be without a clue on how to run an authentic business based upon economic reality.

Consumers today want what they've always wanted, and will pay a reasonable amount if you give it to them with low or zero friction. You can have a barrier to entry for trolls and scammers, without causing hardship on your true customers. This is the magic formula that has been available for thousands of years to anyone with eyes to "discover" for themselves.

A baker makes a loaf of bread that costs him 10 cents, and he sells it hot from the oven to you for a dollar. You gladly pay for it on the walk back from the train. Why? Because even though you could bake it yourself, it is easier and faster and tastes better to pay the 90 cent markup than it does to go to all the trouble of figuring out how to make bread and your time is worth the savings as well. IF the Baker offered you FREE BREAD with the hope that you would read the AD that he burned into the side of the loaf, you would either think he was insane and poisoning the food, or your would simply ignore the marking on the crust and keep on eating free bread until he went out of business. Either way, FREEMIUM is a FAIL.... but the low barrier and ease of purchasing a quick dollar loaf of bread is completely easy and attractive to both the customer and the baker. The other benefit is that it ALSO keeps the riff-raff out of the bakery... because they can't simply come in and beg for free bread all the time or grab a dozen loafs and go out and try to re-sell it for profit to unsuspecting victims down the street who don't realize that it came from the FREE Bakery.

GET ON BOARD COMRADES... It's just like "Old Times" at the LAB

The product train is going to be leaving the station any time now, and you don't want to miss it!