Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Understanding the business behind running a site
Published on October 7, 2003 By Draginol In OS Customization

What is a skin site? A skin site is a kind of file download site.  The world's most popular download site, Download.com, is ranked 47th in the world by Alexa. The kind of bandwidth it must take to run that site is astronomical. Last week, the most popular file on Download.com received over 2.3 million downloads (Kazaa).  WinZip, the most popular ZIP manager, received 426,000 downloads.

Skin sites don't get anywhere near that kind of traffic. It specializes in files that are used to customize the look and feel of your computer. The more specialized you are, the smaller your user base is going to be.  A popular skin author in WinCustomize typically will see around 35,000 downloads of their skins in a given week.

Regardless of what you offer on your site to download, there are only 3 types of download sites:

  1. Sites run as a hobby

  2. Sites with a business model

  3. Sites that disappear from lack of funds

If your site doesn't get immense traffic, you can run it much like the BBSes of old. As a rewarding, fun hobby. But a hobby. One that costs money out of pocket for the site's owner(s) to maintain.  Each owner has a threshold of pain. That is, how much money they can spend before it gets too expensive for them to maintain.

Typically, we've found that when a skin site reaches an Alexa ranking of 10,000 or better that it has crossed a threshold of where it needs to have a viable business model or it will be prohibitively expensive to keep going.

Here are the Alexa rankings of the 6 most popular sites for downloading skins, themes, walls, etc.

Website Alexa Worldwide popularity Ranking
deviantART 1,853
WinCustomize 3,738
Skinbase 50,965
ArtUproar 83,683
Skinz.org 24,523
Customize.org 33,199

Before someone objects to me not listing Deskmod, that's because they don't currently host skins. And for good reason:

Here is Deskmod's ranking over the past year. As you can see, it was slowly moving up. But you can also see some dips due to down time in there. As it's rank edged towards 10,000th or better, the bandwidth costs passed that threshold of hobby and business. Without a business model that pays the bills, the costs are simply too high for individuals.

Based on the Alexa ranking, there are two art/skin sites that make good business cases because they have been in the top 10,000 websites for a long time with uninterrupted availability. That's deviantART and WinCustomize.

At the end of the day, someone has to pay the bills. This must come as quite a shock to the people who think the Internet "should be free" but running a website can get quite expensive. That is, tens of thousands of dollars per month expensive. So how do they do it? Here is the basic model for an art/skin site:

 

All 3 groups need one another.

deviantART and WinCustomize focus on attracting different groups (which means technically they don't compete).  deviantART focuses on making the site a haven for artists/skinners who in turn attract users. WinCustomize focuses on users which in turn attracts skinners/artists. But in both cases, who visits the site is important.

On WinCustomize, the type of user matters. That's because the site pays for itself through selling of WinCustomize subscriptions and software via its store. There are basically two types of users: Contributors and non-contributors.  Contributors are the people who either create content for the site (skins, themes, icons, tutorials, walls, etc.) or register some of the programs they use /  purchase a subscription to the site.  Non-contributors, are users who simply download the stuff.

At a certain point, it's up to the website to create an avenue for people to become contributors. If you don't have something reasonably compelling or attainable for a user, they won't become a contributor.  Either way, if a site has too few contributors as a percentage, it will eventually die.

Freeware vs. Commercialware

WinCustomize gets tons of requests for new sections on the site. But few people put much thought into "how does this help the site?"  The worst case scenario for a site like WinCustomize is to put up a section for a program that doesn't bring in many new users but increases the consumption rate of non-contributors. That's why WinCustomize is biased for commercial software. The users of those programs are much more likely to be willing to become contributors in some way.

The last thing a site wants is to be overrun by militant "everything should be free" people who consume the bandwidth and give nothing in return. Applications that attract those kinds of users are what we call "bad citizens".

So what makes an application a "good citizen"?

Here's a list:

1. Be available on mainstream download sites. Skin sites like WinCustomize want mainstream users. That means making your program available on Download.com, Tucows, Betanews's File Forum, etc. If your program is on some obscure home page, it's not going to have a large user base.

2. Promote the heck out of those who support you. Especially if you're a freeware program. That means links to the major skin sites on your home page. Not buried but very apparent. When you install your program, include links to those sites supporting you.

3. Encourage the skinners of your program to upload to the sites that support your app.

What it boils down to is understanding the basic model for a skin site. Skin sites need users and content. They need people who will contribute to the site (either content or through purchases of products and services).  Recognizing these basic economic realities is a good start to understanding how skin sites stay alive over the long term.


Comments
on Oct 08, 2003
Do you guys ever write any non-biased articles? I.e. articles were a. you are not promoting yourself, b. bashing anyone who does not support your model, or c. trying to bash free web sites, free internet, free dl, p2p, etc.? Just wondering... I have read a couple (read 5-6) articles and they all are the same tripe: basically they start w/ it cost us money then it goes into how you charge, and then the implied hint at the user to pony up.... News flash you run a business, it takes money to make money, get over it...
on Oct 08, 2003
I do agree that often times Stardock does alot of self promotion. But what's wrong with that.

What I find interesting about this type of post, where it comes out 100% factions, but favoring Stardock, is that it shows how much research is actually done. This is the type of thing that makes a company successful....research and customer communication. You communicate to your customers why things have to be the way they are....create a value-added service to pay for your costs, and hope the users find it compelling enough to pay for.

So maybe most companies do it through advertising, cost-cutting and shoddy service. Stardock uses enginuity, personality and interaction.

Props to alternative business models that are less misleading or down-right dishonest than so many are!!!
on Oct 08, 2003
Was meant "100% factual"
on Oct 08, 2003
I agree that Stardock often speaks highly of itself, but that's because it's a great company.
However, the point of the article is that it costs money to run a site whether or not you're a business. The problem is that people who want free Internet, free downloads, and free everything do not understand that money has to come from somewhere to pay for such services. Otherwise, they will remain small and insignificent or grow beyond their capicity and die horrible deaths. There is a reason why the largest and most popular sites are commercial.
on Oct 08, 2003
Here i'll do the same and talk about myself....Irony, But I wrote a small editorial in the latest modzine.net magazine about that exact point on Stardock. I think you will understand more after reading it. check it out on http://www.modzine.net
on Oct 09, 2003
Shadow lord: Yea, no kidding that's kind of the point: I am biased. Duh. What a shock that is.

And you're right - it takes money to run a business. But guess what, where do you think that money comes from? Go ahead, guess?

It seems to me it's not companies or its lackeys (like me) that are whining, it's always the free beer people who whine. Incidentaly, how does this article "promote" Stardock? It's a Econ 101 about what's involved in running a skin site.

Ever day we have people wanting WinCustomize to throw up the latest obscure freedbie program "Look, I'm a skinnable mouse coordinates program! Put a section up."

But what is the justification to do so? It's always funny how the free beer crowd demand altruism out of companies but they, as invidivuals, tend to just want to leech. Don't agree, imagine this scenario:

So WinCustomize puts up ObscureMouseCoord as a section. But requires that people pay $5 to access the section. What do you think the reaction would be? There'd be a riot and charges that WinCustomize is "greedy". Greedy? Who's really being greedy? The ones asking for the people who make use of a resource contribute to its upkeep or the people who want to freely use other people's stuff without contributing anything back?

But rather than deal with riots, good skin sites have to find a business model. WinCustomize's focuses on trying to support programs that are already quite popular to bring in new users who may purchase a subscription to the site or purchase software from the site's primary financial provider -- Stardock.

So Shadow, news flash for you -- businesses are in the business of making money. Get over it.
on Oct 09, 2003
One other thing: I never write non-biased articles. If someone doesn't like my articles, they should get off their ass and write their own. Create a blog here and write your own articles and give your side of the argument.
on Oct 09, 2003
You don't have to host content to link and organize content. 1 site hosting 5000 popular "skins" may indeed cost hundreds a month (not thousands people.....I can buy 6 TB+ of data transfer for $300) however if those 5000 skins are hosted on 3500 different machines...and the skin site only links to those sites...then no one gets huge bandwidth bills and it remains in the hobby realm.
on Oct 11, 2003
Draginol: With all those intelligent and calm commentary you put in there how could anyone ever argue with you. You are god. Forgive us oh almighty lackey of Stardock. Get over yourself, get a grip, and then we can discuss it rationally.

JeremyG: I don't care if they want to self promote. But when I read an article I expect to get a balanced view (as much as humanly possible) of the issues involved. If they want to self promote then they should call it what it is: an advertisement and we'll just skip it. Hell, I might even be willign to except editorial (as in an opinion piece) as a title for their stuff but article is just pushing it. Heck they even admit to writing biased stuff.

Messy Buu: I am not evaling Stardock as a compnay. My beef is with what they like to call an article and most everyone else would call an advertisement.

on Oct 13, 2003
Question, how does to many contribuators kill a site? God article.
on Oct 13, 2003
sog: I think you are getting GIGAbytes and TERRAbytes mixed up. 6 Terrabytes requires over 20 megabits of continuous bandwidth. There are no ISPs on the net that will provide you that kind of bandwidth for a few hundred dollars. The cheapest ISP out there is Cogent which is substantially higher and their prices are going up too.

Shadow Lord: lol. I take it you don't read much if you expect a "balanced" view in everything you write. This is an editorial. I have an opinion that I am expressing and backing up my opinion. You also don't seem to have a firm grasp on what an advertisement is. If you disagree with my view, then try using facts to build your own case.

The bottom line is, if you want to run a very popular site you have to come up with a business model. At a certain point, a site's costs get too high for it to be a hobby.