Keeping Subscribers Active

Next week, we will run an in-depth profile, but for now you should see how MiracleNet's marketing scheme forces subscribers to log on and read ads. This free ISP actually unsubscribes inactive accounts.

by Alex Goldman ISP-Planet Associate Editor [August 25, 2000]

[The profile is here.]

In a scheme described this morning on @NewYork, the ISP MiracleNet has decided to forego an advertising budget and pay for referrals instead.

The ISP will give away a portion of ad revenue to subscribers, based on this multi-level marketing (MLM) scheme that allows subscribers to earn money from a network of referrals up to five or six layers down (for example, you can earn money from the Internet activities of someone who was referred by someone you referred, and that's only two levels down).

MiracleNet's revenue stream is a complex variety of sales affiliations, banner ads, and targeted email ads. It also uses the "upsell" technique made famous by Juno: Bring them in with free Internet access and then sell premium services.

MiracleNet is aggressively adding sales affiliations, marketing partners, and subscribers in a drive to grow extremely fast.

Fixes a flawed model
The real improvement is the solution to the basic problem of free ISPs: Subscribers simply stop using the service.

At MiracleNet, if you fail to log on for sixty days, you are bumped off the network. If you fail to log on at least once each week, you lose MLM revenue for the week during which you were inactive.

We know of no other free ISP that actually terminates the accounts of inactive subscribers.

We know of only one other ISP that pays monthly for referrals, Spire, brainchild of ISP Planet columnist Kevin Beauchamp.

We will describe this business in detail in a profile next week. In a market originally filled with unrealistic "give-it-away" business models, multi-level marketing seems fiscally responsible.

Is MLM better than free? Is it good enough? Stay tuned.

—End