You don't have to pay a fee to listen to the radio and you don't pay much for a newspaper, so why pay over #100 a year for Internet access? That's the premise of a new US Web site called Freeride that lets you redeem the barcodes from your purchases against the monthly subscription charge you pay your Internet Service Provider (ISP).
Freeride works by giving you points for every bar-code you collect. Each month, products that you buy regularly such as soap, biscuits, pain relievers and even film are featured on the Web site. When you've collected enough barcodes, you send them to Freeride in a prepaid envelope. The company will scan the barcodes to confirm they match valid Freeride offers. On average, you need about 1,000 points to pay for a #12.50 ISP, which according to Freeride equals about one weekly grocery bill - approximately #50-#60.
A flash of inspiration
Eliot Russman, Vice President of Freeride, says the concept was inspired by a speech made about two years ago by Ed Artz, former Chairman and CEO of Proctor & Gamble, as well as a market need. Artz's speech challenged agencies to "get on the new media wagon or get left behind". Artz's position, which became the mantra among US advertisers, was that the new media industry and ad agencies need to help marketing companies understand how to sell products and make money with the Internet.
Freeride took the bait and tried to sell its idea to ISPs and product manufacturers. Persuading manufacturers, including Kodak, Johnson & Johnson and Unilever to subsidise customers' Internet use wasn't hard, says Russman, as it offered them a chance to shift products without any upfront media costs. "They're very excited about it and there are more deals in the works," he says.
Freeride also offers manufacturers exclusivity, thus developing a long-term relationship and helping them understand buying patterns. For example, an exclusive deal with Kodak means that visitors to the Freeride site can only buy film from Kodak to collect points towards free Internet access.
Getting ISPs to sign up was easy says Russman, as most of them are losing money by not charging enough to cover costs. "It's a good deal for ISPs," he says. "It gives them an opportunity to increase prices yet still offer the consumer a way to get it free." So far, more than 200 of the 1,000 US ISPs have joined Freeride and Russman hopes to persuade the big five - America Online, CompuServe, Prodigy, MSN and Netcom - to follow suit. "They all need a reason to stop subscribers deserting them for rivals in search of the best price."
According to Russman, Freeride even saves ISPs money by reducing credit card company transaction fees and improving short-term cash flow.
Freeride is now a fully capitalised, privately owned company, partly funded by venture capital from US sources. Russman says investors were impressed by the online proof-of-purchase concept which involved getting visitors to the site to fill out a questionnaire about product preferences. "Thousands of respondents spent an average of 45 minutes answering our questionnaire, not playing games, but answering a research questionnaire. Amazing."
He adds that the site will make a profit by helping sponsors sell products, by generating visits to sponsor Web sites, by generating online commerce and by increasing subscriber usage of participating ISPs.
Saving proofs-of-purchases isn't the only way to earn points on Freeride. Instant Freerides can be collected by visiting selected Web sites, while Freeride Zines gives visitors discounts on subscriptions to featured magazines.
At the moment, Freeride is only available in the US, but it's an intriguing idea that could catch on in the UK. The company has plans to build a European Web site as soon as it has completed setting up the US and Canada franchise.
But some US publications have criticised Freeride for inciting what they call a "frenzy of consumerism". Whether or not UK Internet users will take the hook in the same way as their US counterparts remains to be seen.
Launch: December 96
Design: Todd Congdon, Jordan Stanley and John Mezzina (in-house)
Target Audience: Anyone paying Internet access subscription fees. Any products/service marketing company looking to increase off-line retail and online sales
Competitors: www.hotcoupons.com, www.cybergold.com, www.netperks.com
Setup: Digital Alpha Server, Oracle database, InfiNet Networks host
Hits Per Day: 285,000 Size: 100 pages.
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