Commentary
1/24/2009
10:05 PM
Allen Stern
Allen Stern
Commentary

Can Virtual Goods Work For Scrapblog?

When I spoke with Scrapblog CEO Carlos GarcÍa last year, he described the service as "a way to create multimedia scrapbooks." I liked the service then because it knew that users alone wouldn't be enough to generate sustainable revenue. This weekend it is launching the next phase of its business model.



When I spoke with Scrapblog CEO Carlos GarcÍa last year, he described the service as "a way to create multimedia scrapbooks." I liked the service then because it knew that users alone wouldn't be enough to generate sustainable revenue. This weekend it is launching the next phase of its business model.Scrapblog already has partnered with a variety of CPG and media companies including ABC and Disney. The next phase of its business model is a virtual goods marketplace. Scrapblog users currently create online scrapbooks in a variety of categories. Photos and videos can be added to make the scrapbook more interactive than a physical scrapbook. Once the online scrapbook is complete, the user can embed it in his or her blog, Webs ite, Facebook, or MySpace profile.

This weekend Scrapblog is launching the virtual goods marketplace which will allow users to purchase additional artwork and other scrapbook enhancements. Scrapblog partnered with a variety of designers to create the paid content. It will be interesting to see if it launches a program which allows its users to create or submit paid content. The paid content is offered using a credits system where the credits cost $0.02 each. I noted that it doesn't offer a discount for higher credit buys. In my testing, the digital goods ranged in price from $.60 to $1.50.

The designers in the marketplace are apparently the top designers of the offline scrapbooking market. This will help drive new users to Scrapblog because the designers will push users to the service. My suggestions for the marketplace include offering discounts for volume credit purchases and offering a monthly subscription option.

Scrapblog doesn't get the press in the blogosphere/media that it should. This is the type of service that entrepreneurs should review as they work on their own products or services. The business isn't supported by advertising; instead it has a multifaceted revenue model.

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