Maybe there is a successful model to be had here, with some changes. Think about games -- the big trend over the last year or two has been toward bundling. Cons

Maybe there is a successful model to be had here, with some changes. Think about games -- the big trend over the last year or two has been toward bundling. Consider these sites: http://bundle-in-a-box.com/ http://bundle-in-a-box.com/ http://www.indiegala.com/ http://www.indiegala.com/ http://www.indieroyale.com/ http://www.indieroyale.com/ http://www.gamemusicbundle.com/ http://www.gamemusicbundle.com/ Most of the time, the problem with freemium is that the conversion rates tend to be low. My company has talked with hundreds of app developers over the last year, many of them working with a freemium model. We know that even successful games get conversion rates that are usually less than 1% (that is, more than 99% use it for free, less than 1% of the users pay). With conversion rates that low, only a handful of companies will have success with the model. But there are variations on this model that might work very well. Bundling helps with the "first penny" problem -- some users need a very large temptation to make a payment. A subscription model would be especially useful -- and something like a subscription model is what companies like App.net are trying to do (and my own company too). If you can build a base of users who pay a regular subscription to support a bundle of apps, something like the Freemium model becomes a bit easier to manage. User's who would not pay to get a particular app might be more willing to pay if they are getting a bundle of, say for instance, 10 apps that all have some interest to the subscriber. In theory, you can make a lot more money by getting a small amount of money from 50% of your users, or even 100% of your users, then you can get by charging 1% of your users a medium amount. And, to be sure, the app developers that we have talked to have all offered huge discounts to put their stuff in a bundle, because for most of them, even getting $0.50 cents from 50% of their users would bring them a lot more money than trying to get $4.99 from .05% of their users. An elaboration on this argument is here: http://www.youtube.com/watch?v=zkGRHI7xnjo&list=UU4AWURx82e_hl5dQALXJxXw&index=2&feature=plcp http://www.youtube.com/watch?v=zkGRHI7xnjo&list=UU4AWURx...