CoMpFrEaK
19-05-2005 20:57:26
Ok just wrote that, didnt proof read, its basically my first draft, not ready to present it yet, but anyways this can be a reference tool for u n00bs. And quit bitching about dvrs, cause it says in this report why its closed. ®compfreak
Philosophy behind free Ipods
Many people have seen pop-ups asking you to sign up so you can receive a free item such as an ipod or even a computer. Most people are skeptical of these things, and who can blame them, I would be to. I am here to analyze how and why free sites exist, I am not here to prove whether sites are legit or not.
I have selected to use freeipods.com as an example due to its enormous popularity. Freeipods requires you to sign up, complete an offer, then refer 5 friends to sign up under you and complete an offer. This may sound too good to be true, but it actually works. For the next segment of this document we are going to review how and why the sites do this.
So the offer you choose to do typically pay anywhere from 20-30 when they get a sign up. So lets look at this from an easy perspective, in total there would be six people doing an offer. You, and 5 friends. Now if you were to do the math you would realize that having only 6 offers being done does NOT add up to $300 (Ipod retail value). Those 6 offers roughly equal to be around $150, which is only enough for ½ of an Ipod. How can this be? Well this aspect will be explained a bit later.
This is a basic diagram that’s shows the cycle that happens when you attempt for a free ipod.
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As you can see in the diagram by signing up for an offer provides profit for the company in which the company uses to pay Freeipods and then Freeipods provides you with your gift. Though there are a few flaws to this, one which was previously addressed on top.
Another aspect that needs to be taken into consideration is if someone decides to cancel the trial offer. Most of these trial offers are free or at most a few dollars, they are hoping that you either forget to cancel or like the service and become a long term customer. So if someone does decide to cancel then the line between “you” and the “company” no longer exists, which in the end would mean the company loses money. (Another reason why these sites will be no more in the future)
The question “how can this be free, and how do these companies (Freeipods) make money” has been asked many times. The fact being is that if they give you a ipod they lose money. By having only 6 offers done simply does not add up to the Ipods MSRP. These companies remain profitable for the following reasons
1. People getting placed on hold for attempting to fraud the system
2. People not finishing the site
3. It’s a pyramid scheme, so they will win in the end, cause there are not enough new people to sign up, while many people have signed up but can’t finish due to the lack of interested people.
The main reason is #2 though. The idea of referring 5 people may sound simplistic but in reality it isn’t. I’ve personally done it and it was not an easy process. Some people may find 2-4 people and quit, which would basically be free money for the company. This is the primary reason why companies such as Gratis (Freeipods) are able to exist. This can also explain why DVRs4free (Ran by Offer Centric #2 ranked) shut down recently. These companies want to find members that attempt the site but are unable to complete it. They are not interested in members finishing the sites, cause as stated above they lose money for every gift they send out. DVRs4free was never an appealing site to new members, I mean how many people are really interested in a free digital video recorder, none? The only people attempting this site were people who wanted the extra cash and knew they were going to finish the site. This was the primary reason why Offer Centric decided to shut down DVRs4free without an early notification to its members. Though in the long run it will save Offer Centric an enormous amount of money.
Basically these sites exist in hopes of earning money from people who are not able to finish the site. Lets face it; these companies hate to give out gifts but must in order to have a good reputation. These sites will remain in business as long as there are new people signing up. The static currently rests at around 30% of the people actually finishing the site. So by having 70% of the people roughly ½ finish would mean a tremendous amount of revenue for them. (As seen in Gratis’s last revenue report)
Philosophy behind free Ipods
Many people have seen pop-ups asking you to sign up so you can receive a free item such as an ipod or even a computer. Most people are skeptical of these things, and who can blame them, I would be to. I am here to analyze how and why free sites exist, I am not here to prove whether sites are legit or not.
I have selected to use freeipods.com as an example due to its enormous popularity. Freeipods requires you to sign up, complete an offer, then refer 5 friends to sign up under you and complete an offer. This may sound too good to be true, but it actually works. For the next segment of this document we are going to review how and why the sites do this.
So the offer you choose to do typically pay anywhere from 20-30 when they get a sign up. So lets look at this from an easy perspective, in total there would be six people doing an offer. You, and 5 friends. Now if you were to do the math you would realize that having only 6 offers being done does NOT add up to $300 (Ipod retail value). Those 6 offers roughly equal to be around $150, which is only enough for ½ of an Ipod. How can this be? Well this aspect will be explained a bit later.
This is a basic diagram that’s shows the cycle that happens when you attempt for a free ipod.
As you can see in the diagram by signing up for an offer provides profit for the company in which the company uses to pay Freeipods and then Freeipods provides you with your gift. Though there are a few flaws to this, one which was previously addressed on top.
Another aspect that needs to be taken into consideration is if someone decides to cancel the trial offer. Most of these trial offers are free or at most a few dollars, they are hoping that you either forget to cancel or like the service and become a long term customer. So if someone does decide to cancel then the line between “you” and the “company” no longer exists, which in the end would mean the company loses money. (Another reason why these sites will be no more in the future)
The question “how can this be free, and how do these companies (Freeipods) make money” has been asked many times. The fact being is that if they give you a ipod they lose money. By having only 6 offers done simply does not add up to the Ipods MSRP. These companies remain profitable for the following reasons
1. People getting placed on hold for attempting to fraud the system
2. People not finishing the site
3. It’s a pyramid scheme, so they will win in the end, cause there are not enough new people to sign up, while many people have signed up but can’t finish due to the lack of interested people.
The main reason is #2 though. The idea of referring 5 people may sound simplistic but in reality it isn’t. I’ve personally done it and it was not an easy process. Some people may find 2-4 people and quit, which would basically be free money for the company. This is the primary reason why companies such as Gratis (Freeipods) are able to exist. This can also explain why DVRs4free (Ran by Offer Centric #2 ranked) shut down recently. These companies want to find members that attempt the site but are unable to complete it. They are not interested in members finishing the sites, cause as stated above they lose money for every gift they send out. DVRs4free was never an appealing site to new members, I mean how many people are really interested in a free digital video recorder, none? The only people attempting this site were people who wanted the extra cash and knew they were going to finish the site. This was the primary reason why Offer Centric decided to shut down DVRs4free without an early notification to its members. Though in the long run it will save Offer Centric an enormous amount of money.
Basically these sites exist in hopes of earning money from people who are not able to finish the site. Lets face it; these companies hate to give out gifts but must in order to have a good reputation. These sites will remain in business as long as there are new people signing up. The static currently rests at around 30% of the people actually finishing the site. So by having 70% of the people roughly ½ finish would mean a tremendous amount of revenue for them. (As seen in Gratis’s last revenue report)