4 ms·

This is a great breakdown of the different markets that exist. I think it can even help in calculating "back of the envelope" numbers, because you know you need

• tim_buck 15y ago
  Freemium is not a change in the age old formulas. Giving it away for free is a usually recurring/ongoing loss incurred to increase addressable market. In addition, people that get things for free tend to be more potentially critical of those things. That means that to increase addressable market and increase potential for sales, you are increasing the amount of critical feedback and response. As the OP said, you must be focused on customer service, and it is even more true with Freemium; however, at the same time, you have to provide a substantial carrot that the rabbit actually wants to get conversion to happen. For example, I probably wouldn't have started paying for Pandora if all of the following weren't true: (1) For free or by paying, I knew they had music I liked and would play a variety for not much effort on my part but I was still able to control it; basically I was pleased with the product. (2) By paying, I didn't have to listen to commercials. (3) By paying, I could hear a substantial difference in sound quality, but the free sound quality was good enough- it just wasn't as great as the paid version I heard at a neighbor's house.