For decades, the fee versus free debate has carried on—with content industry players digging in deep at each end of the spectrum. Yet a more moderate model seems to be emerging: freemium. While not an entirely new concept in other sectors, traditional content players have only recently begun to leverage the business model in which the owner or service provider offers basic features to users at no cost and charges a premium for supplemental or advanced features. The term, which combines the words free and premium, was coined by Jarid Lukin of Alacra in 2006 after venture capitalist Fred Wilson developed the concept. With the launch of its Alacra Street Pulse product this week, the company is drinking its own catchphrase Kool-Aid.
On February 18, Alacra announced the rollout of its Pulse Platform, which identifies, aggregates, and presents business "events." The company will offer freemium versions of individual Pulse offerings, which will be supported by advertising and the sale of related premium content from the Alacra Store, as well as enhanced premium editions. The company has offered free services in the past, such as Alacra Wiki and Research Recap, but this is the first time in which the company will attempt to leverage the freemium model. Barry Graubart Alacra’s VP of product strategy and business development believes the timing is particularly good to take this approach. He says, "Especially in this market where content budgets are so closely scrutinized, the freemium version allows us to prove the value of the underlying content to a broad audience, some of whom will pay a premium for added functionality to match their workflow."
The model isn’t the only change from Alacra’s usual content modus operendi: In most of its products, the company aggregates fee-based content from other publishers, requiring extensive licensing and permissioning. In addition to commentary gathered from traditional analysts’ sites and blogs, Pulse will aggregate content from over 2,000 hand-selected mainstream and alternative media RSS feeds.
Key features of the debut Pulse product, Street Pulse, include: An Analyst Comment Ticker, which dynamically displays the five most recent analyst comments; What’s Hot, which ranks the companies which have gotten the most analyst comments in the prior 24 hours; and linked-for-more info company/ticker names, analyst names, research firm names, and links to the originating content source to read full articles. Users can browse by company, analyst or firm, as well as search by company name, ticker, analyst name, or by research firm or blog name.
Future editions of the Pulse Platform services, which will be rolled out over the next several months, will include law firms mentions in "Legal Pulse;" news articles and posts that highlight distressed companies in "Weak Pulse;" news and posts about M&A transactions for "Deal Pulse;" and comments by rating agencies and credit analysts about an issuer’s credit rating in "Credit Pulse."
Alacra has always been in the business of providing critical business information; with Pulse, the company is recognizing that important news about companies now appears on the web first. The Pulse Platform does more than aggregate web news and commentary, however. In addition to hand-selecting content sources to maintain quality, the platform is built upon Alacra’s proprietary Applied Knowledge Extraction technology, which uses a combination of semantic analysis and an existing knowledge base to identify entities and events.
According to Alacra CEO Steve Goldstein, Pulse Professional, the premium edition of this product line, offers a range of enhanced features: "We have some great functionality we’ve built that will be in the professional version--alerting, advance searching, portfolios/watchlists, and sharing capabilities--so we will make money on our services and help content creators make money on theirs—the content--by sending traffic back to the sites the articles/posts originated from." Pulse Professional is priced on an enterprise or department-wide basis, as opposed to the per-desktop model.
Part of the decision to go freemium with this product was because its content base is made up of freely available web content. As Goldstein put it, "the content isn’t ours and we felt uncomfortable charging directly for other people’s content." However, there are other sound reasons to go freemium, "The freemium model is great for lead generation," according to Goldstein. "Some small percentage of the traffic will be willing to pay for the professional version, but with my small sales team it would take me forever to find them. This way, interested people come to me and we can try to up-sell them." Undoubtedly, finding potential customers will be an essential component of succeeding in the content business today.