Course name: IT for Business

CASE ANLYSIS: ezboard: Making

Customers Pay

FAS Group No: A2

Name of the Students
Aakanksha Thete
(15F101)
Antony Attokaran
(15F110)
Rajgopal Balabhadruni
(15F140)
Sachin Kulkarni
(15F142)
R. Swetha
(15F156)
TERM 3
T A PAI MANAGEMENT INSTITUTE, MANIPAL

Ezboard: Making Customers pay

PROBLEM STATEMENTRobert Labatt, CEO of ezboard, planned to boost revenues by launching a
new subscription model when the company rolled out Version 8.0. To achieve
this goal, Labatt and his team had to answer a few important questions1. How to revamp the companys subscription model and bump up
revenues? The management had to decide whom to charge and how to
charge.
2. The right rollout strategy at launch of Version 8.0 which will offer
ezboard its best chance to squeeze as much revenue out of the
discussion board business as possible.
REVAMPING THE REVENUE MODELRoughly 57% of ezboards revenues at the end of 2004 came from
discussion boards and user subscriptions. Advertising accounted for
33% and private licensing the remainder. The management should go with
a hybrid model charging all the three major sources of revenues. Ezboard
had about 10 million active users of which 5 million were registered, making
it possible for ezboard to generate advertising revenue from them. To alter
the subscription model of big communities who took up considerable
bandwidth, ezboard had started offering discussion boards a new payment
plan known as Gold Community in exchange for no advertising at all and a
couple of additional features. The discussion board that subscribed to Gold
Community plan accounted for 75% of total subscription revenues. Of 75000
active discussion boards, 23% of them subscribed to Gold Community and
gold boards represented 65% of page views on website. Hence, the
management must focus on Gold Community as it accounted for the majority
of total revenues.
As for how to charge the users, depending on the usage of the blogs and
boards and the frequency of usage, the users can be charged. Ezboard had a
system of unregistered, registered and paid users. The management would
have restrict the content available for view to the unregistered and
registered users and allow free access to the paid ones. Also, as a part of
revamping, the unregistered users could be allowed to post limited messages
per month. Other factors including the amount of access to blogging and
social networking capabilities, if introduced, can be decided based on the
above mentioned conditions.
NEW ROLLOUT STRATEGY-

The management had 2 options- either go for a big bang or go-slow

approach. Given the fact that ezboard had several unhappy customers
following the software problems from SmallTalk at the end of 2002 and the
temporary shutdown of ezboards website while switching data centres, the
management had to gain the trust of its customers to attain long term
success.
Under the big-bang approach the company would launch the changes
across the board and introduce new subscription model to all of its
customers. If it worked, after two months management could refocus
attention and cash reserves on generating revenue streams. However if one
thing fails then the updated business and subscription model will be risking
the companys future. Also, huge amount of resources and numerous hours
would be spent on fixing the error and revamping the strategy again.
With a go-slow approach, which showed less concern for quick
subscription conversions and an unsuccessful subscription model, the
management could weigh various options they had, test the software
product and subscription scheme on selected boards and update them on
those models that were most compatible. Moreover, if the roll out does not
work out, the cost of fixing it will be lower compared to the big-bang
approach. Also, the mangement can manitain good relation swith the
existing customers. Although the management may not see higher revenues
immediately, the go slow approach will allow them to do any course
corrections as needed prior to the full scale roll out.
Therefore, the management must opt for go-slow approach and launch
business model on appropriate cutomer pools.