Charging for Customization


So one of the more interesting things in the new MSN Messenger Beta - besides "innovations" like copying Yahoo's audibles, nudges and IMvironments - is the fact that you can *buy* customizations. This is a concept that was introduced to me just recently. There's internet communities in Korea where they make tons of money from people buying modifications for online avatars.

This article in Forbes talks about how extensive it is:

More than 3.6 million Koreans have avatars, or virtual selves, representing them in chat rooms and e-mail. At Oh My Love, Korea's biggest video chat service, avatars are quickly evolving from cute cartoonlike human figures into animations of moving lips, floating dragons and shooting stars. New services have cropped up, including avatar cosmetic surgery, pets and, coming soon, houses. "There is so much to do," says Stanley Ho, president of Neowiz, the biggest avatar purveyor. Its revenue from virtual merchandise should double this year to $65 million, with $15 million in profit.

My instinctive thought is that this is ridiculous. Who would pay a few dollars for just a few kilobytes of graphics and virtual add-ons? It's not like you're modding your car or skateboard with stickers, this stuff is not real! But then I think of how big ringtones and wallpapers are on mobile phones and I think twice. Obviously people like customizing their technology and online experience. A lot.

The question is how big of a business is this? Obviously Microsoft thinks that it could be interesting enough to throw it out there with this latest release and see what happens. I personally wonder how big it'll be for mobile data services. My original assumption about ringtones was that it was the music people were interested in, but it looks like it may just be the customization and personalization. Maybe it doesn't *matter* what the content is, as long as it has some sort scarcity (i.e. for money) and is able to be shared, there's value in it.

I mean, BlueMountain is charging $3 for a set of smiley .gifs? There's some weird market forces going on there that I need to get a handle on.


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