.Mac is Apple’s $99/year online service that is basically the online publishing component of the iLife application suite. It incorporates:
- iPhoto publishing and sharing
- easy website publishing from iWeb
- online file storage
- syncing of bookmarks and calendars between multiple Macs
Much of the talk in the Mac community has been around price: is it really worth it? After all, Google gives you Gmail with 2+ GB (free), there are other sources of online file storage such as Yahoo’s Backpack (free), and $99 would easily buy you your own domain name and server space at a lot of web hosting companies … in fact, it could easily be a lot cheaper.
There’s no question that Apple’s integration of the tools with iLife, and the quality of the presentation is worth something. But the number of Mac owners actually using .Mac has to be minimal, even tiny.
So my question is: would Apple make more money if they made .Mac free, and slapped Google AdWords on it?
How much do they make?
Well, even if the percentage of Mac owners paying for .Mac is not high, there’s still a lot of money in it.
If 500,000 people were paying for .Mac, Apple would gross $50 million a year. I think that number would be very high. There’s a story at C|Net from 2002 claiming that Apple had almost 200,000 subscribers, but I seriously doubt that it’s grown immensely, even though pageviews on Alexa have grown somewhat over the past few years. Most of that increased page viewing is likely due to visitors, not subscribers.
Let’s say there are 300,000 subscribers today, and Apple makes $30 million/year from them. Could they do better?
Well, let’s take a look at an AdWords example: PlentyofFish. It’s an online dating site, it is entirely free and AdWords supported, and its owner just cashed a million-dollar check. Well, almost a million.
He says his CPM (cost per thousand) pageviews is under $1. Well, let’s do some math:
– $500,000 for a month
– CPM of about $1
He must have gotten about 500 million pageviews. Adjust the number up or down a bit, depending on your inputs, but that’s about where it stands.
A free .Mac: show me the money
Let’s assume, given that .Mac is a fairly good service and it’s tightly integrated into iLife, many, many Mac owners would be users of .Mac if it was free. I think a conservative guess would be that 10 times more owners would use .Mac … meaning that you’d have 3 million people instead of 300,000.
Well, if you compare .Mac and PlentyOfFish pageviews at Alexa, you’ll find that today, they’re almost neck-and-neck.
In other words, .Mac should have about 500 million pageviews a month.
Multiply that by 10, and you’re at a whopping 5 billion pageviews a month. Apply the same CPM metrics of PlentyOfFish, and a back-of-the-envelope analysis would tell you that a free .Mac would make Apple about $5 million each and every month.
Apple, set .Mac free: you’ll make more
Which means, that at $60 million/year, Apple would double its revenue by reducing the price of .Mac to free. Which would seem to be a great idea …
A free .Mac would also be an excellent selling point for new Macs. And don’t forget: a wonderful marketing tool for all the non-Mac-owning relatives of Mac users who would visit .Mac to see their cool relations’ funky digital creations.
.Mac is already free as in speech. Maybe it’s time for Apple to make it free as in beer.
. . .
. . .
Some thoughts on the argument above:
- Would CPM on a non-dating site be lower, equal, or higher than a dating site? I don’t know, but obviously the answer is important. I could argue .Mac would have a lower CPM (people searching for dates are pretty focused, and if they see ads related to it, will probably click one or two) and I could argure more (there would be lots of profitable niches in .Mac sites, such as vacations, parties, special occasions, etc. … all the things that people take pictures of and blog about).
- Would Apple feel that putting advertising from Google on a Mac product adversely affect the Apple brand … even if the online product is full of user-generated content?
- Is a figure of 10x the number of Mac users using .Mac if it was free low? I know I’d be using photocasting in a second!
- What other tie-ins between iLife and .Mac could Apple make if there was a clear revenue model based on Mac users actually using .Mac? Video from iMovie? Syncing of your .Mac mail and your Mail.app mail?
- As Fred has commented below, you could easily have a user-option: pay and get an ad-free .Mac, or get it free and have an ad-supported .Mac.
And whatever else I might be missing …[ update ]
A quick note spurred by one of the comments below: I did pay for and use .Mac for two years … so I do have some clue as to what the service is. However, if you think I’m missing the real point of it, or a large part of the value of it, please, please do enlighten me (and everyone else) in the comments. Thanks![tags] apple, .Mac, web 2.0, iLife, free, CPM, google, adwords, adsense, john koetsier [/tags]