Tuesday, May 30, 2006

Earn Cellphone Minutes by Watching Ads

With the cost of mobile phone calls already dropping sharply, Virgin Mobile USA plans to announce a way that people can talk for no money at all. They will, however, have to pay with a chunk of their attention.

The program, called SugarMama, lets people earn one minute of talking time by watching 30-second commercials on a computer or receiving text messages on their phones, then answering questions to prove they were, in fact, paying attention.
Gotta love the SugarMama. I like this idea of being able to choose if you want to view ads or if you want to pay for your service. I think this model could be used in all sorts of digital/attention economy goods.

How much are you getting "paid" to watch the ads?
Adding to Virgin Mobile's challenge is the fact that airtime is cheap and getting cheaper, said Ed Snyder, an analyst with Charter Equity Research. He said a minute of airtime typically cost from 3.5 cents to 10 cents, down from more than 25 cents a decade ago.
If you have to watch a 30 second ad for every one minute of airtime, at the high end of 10 cents a minute, that works out to 20 cents of airtime for each minute of commercial watching, or $12.00/hr. Not bad. On the low end of 3.5 cents, and if it takes you another 30 seconds to answer each ad, then that would be 3.5 cents per minute or $2.10 an hour. Not so good.

And as much as I like the idea of allowing people to choose if they want to watch ads or just pay for the service, I am not so sure the advertisers will go for it, as they point out here:
Roger Entner, an analyst with Ovum Research, a market research firm, said the kinds of consumers willing to swap their time for airtime were not likely to be big spenders.

"If you're too cheap to buy a minute of air time, how are you going to afford an Xbox?" Mr. Entner said. The people likely to earn minutes for free "are people who want to avoid costs at any cost."
via New York Times

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