Staring from the beginning of this month, ChinesePod and other podcast sites run by Praxis Languages stopped offering access to all podcasts for non-paying members except for the Newbie level. I had not intended to write anything about it because how they decide to make revenue to sustain their business is none of my business and something they would know much better about. However, after seeing how they actually implemented the changes, I feel like I need to say something because I actually care about ChinesePod and its continued success/existence (especially if they’re going to introduce JapanesePod). It might be better to email them directly and I might do that but for now I’m putting up my thoughts here for everybody to see and to keep it separate from the very long discussions that are already going on at the site itself.

A personal perspective

First of all, I have to fess up to say that I’m not a paying subscriber and have never really gotten involved in the comments or discussions on the site. The simple reason for this is because I am studying Chinese rather passively and very slowly. I even stop studying altogether for long periods of time and while their slogan is, “Learn Chinese on Your Terms”, you can never really stop studying their material without feeling like you’re wasting money. In addition, I’m not much of a subscriber of anything outside of essential or near-essential services such as electricity and my cell phone. I prefer to buy things to own and I have bought several books on learning Chinese, some comic books, and a very expensive electronic dictionary. I would certainly consider buying a DVD of the lessons, grammar points, and transcripts in a good quality print. However, my major problem right now is time and to a certain degree interest and necessity not a lack of resources.

Basically, I’m just not part of their target market demographic. But really, my personal circumstances are irrelevant in relation to their business model as a whole and I bring it up here just to separate my personal view from my analysis of their decision in general.

An objective/business perspective

From a business perspective, there are several revenue models Praxis could have gone with.

1. Advertising (including marketing actual goods and affiliate partnerships)
2. Pay by usage
3. Subscription

As for the first option, I don’t think general ad revenue is really sustainable in the market of language learning. I highly doubt you can keep an outfit like ChinesePod going without a significantly large audience. And based on my personal site statistics, language learning is not a big enough market for general ads as compared to classifieds and news sites.

However, an interesting idea is to use advertising as marketing for their own products such as printed transcripts, language software, and lesson DVDs. Unfortunately, production and distribution costs are a large problem and again in a small market such as foreign language learning, I see this as an option for boosting revenues but not viable for running a whole company. In addition, I think the people at ChinesePod want to be more innovative than just selling static and stale physical goods like Rosetta Stone.

The second model of paying for what you use would certainly appeal to me more but wouldn’t have worked when they just started out, since they didn’t have anything. It’s also a much bigger hassle to keep track of who payed for what so I wouldn’t necessarily recommend it. They could maybe sell the podcasts as songs in iTunes but that ties them to Apple’s platform and I’m pretty sure they want people to visit the site, not just get everything form iTunes.

So while people may suggest some other ways to make money while keeping things free, I think ChinesePod has gone with the only model that really makes sense for what they’re doing. Obviously, if the accounting books say they need to close some stuff off for non-paying users to motivate them to subscribe, that’s their business. However, the details in how they decided to go about it seems… to put it politely, misguided.

Suggestions

The first problem is they went with the bait-and-switch and nobody likes to be treated like a fish. When I design and develop features or upgrades in software, as a general rule, I never take features away. If you don’t think you can maintain or support the features in the long-term, you should never give it to them in the first place. In the software/SaaS world, people would rather not have something in the first place than have it taken away from them. In this case, ignorance really is bliss.

They already gave away all the lessons up to now anyway. They should have started closing access to the new lesson only. Especially in the digital world, once you open Pandora’s box, you can never get it back in. So I see no point in trying to close off all the old lessons, when all somebody has to do is release a torrent with all the old files anyway. People who don’t want to pay won’t, no matter what you try to do. I hate to say this, but in this case JapanesePod101 has made the right decision in releasing Premium subscriber-only lessons incrementally.

If the argument is really about focusing on providing more for the paying customers, then prove it by releasing new stuff only for them that makes non-subscribers want to join. Right now, it just sounds like vague promises and nobody can deny that they’re now providing far less, no matter how you try to dress up the situation.

The second major problem is not only did they take away the podcast audio, they closed the comments to non-paying members. BIG MISTAKE. I’m not too familiar with the community features since I don’t participate, but I have never seen a paying community take off. In fact, I think that’s almost an oxymoron. The idea that you have to pay to discuss things with other people online is just ridiculous. Non-paying members won’t have access to the lesson anyway, why block other people such as native Chinese speakers from answering the questions and comments by paying members, with the understanding that they haven’t heard the actual podcast? In fact, native Chinese speakers probably didn’t waste their time listening to the podcasts anyway ever. Really, I’d rather not waste my time discussing things with other clueless paying members if that’s the only people that can respond.

It will be interesting to see what this effect will have on the community around ChinesePod. In my opinion, it will be devastating and irreversible pretty soon. The clock is ticking. Reopen all the community features for everybody before it’s too late!

Again, I’m not saying their decision is right or wrong, I’m just saying that some of the details in the change is not what I would call good business sense.