About the Atlasphere's Business Model

This morning one of our members sent us the following message:

Guys at the Atlasphere — as an investor in a couple dating sites, and the CEO of a pretty large internet subscription company — I thought I’d point out that it’s most common to show the pictures to basic members, so that they get really motivated to contact the other party and then pay to upgrade. Hiding the photos is hiding your best sales tool!

We receive some version of this question several times a year, so I thought I’d take the opportunity to answer in public, since no doubt many other people have wondered the same thing: Why doesn’t the Atlasphere adopt the same business model used at other social networking sites, of showing photos for free?
As it happens, the Atlasphere’s subscription rate — the rate at which our free members elect to purchase paid subscriptions — is about six times the industry average.
Unfortunately, this doesn’t mean we’re taking in millions of dollars each year. We’re a tiny fraction of the size of ordinary social networking sites, since our target market is limited to admirers of Ayn Rand’s novels — and so our base of potential customers is accordingly much smaller as well.
I’m not certain why our subscription rate is so much higher than the industry average, but my guess is that it has to do with the strong interest that Rand fans have in getting to know one another.
The Atlasphere seems to have struck into an untapped market in Objectivism: The desire for meaningful one-on-one contact, without the hassles and aggravation of participating in the (always controversial and time-consuming) online discussion forums.
This is why we’ve never had discussion forums at the Atlasphere, and why we’re unlikely to do so any time soon. (Another question we receive regularly.)
Returning to the original question: Would our subscription rates be even higher if we allowed members to see one another’s photos for free? We were curious to find out, so we tried adopting this membership structure during the 4th quarter of 2004 (Oct – Dec).
During this time, our subscription rates immediately dropped, by more than 80%, and did not recover until we reverted to our old membership structure.
So that’s our answer to the question raised above: Been there, done that, and found out it doesn’t work well at all for our target market.
If you have any other ideas for improving the Atlasphere, please (by all means) drop us a note! We welcome ideas for further improving our service.

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