4 ms·

Ask HN: Stats on freemium services

20 points by nikhils 18y ago

Anyone know where I can get hold of useful stats on % of users who upgrade to premium/paid for accounts on services like Flickr and Last.fm. Need some decent stats for benchmarking and have had no luck getting anything of use. Thanks.

e1ven 18y ago
One link I can give is http://nabeel.typepad.com/brinking/2008/09/theres-been-som.html http://nabeel.typepad.com/brinking/2008/09/theres-been-som.h... Overall, Freemium conversion rates are way down right now. I might suspect that users are feeling less wealthy, and not opting to pay for anything that's not absolutely necessary.
- teej 18y ago
  Comparing virtual goods sales to premium web app conversions is a bit of a stretch, but I happen to like Nabeel, and I think that link is a good article.
  - e1ven 18y ago
    I can absolutely see your point, but I tend to see them as two branches of one tree- You're inviting people into your service for free, and then trying to sell them a higher quality version. The difference is that one transaction is a one-off sale, and the other is a subscription.
    - teej 18y ago
      It's more then that though. People subscribe to web applications for completely different reasons than people whom purchase virtual goods. The demographics, spending patterns, motivations to spend, lifetime value, upsell opportunities and a million other things of the customers differ. Comparing money spent on entertainment and money spent on tools isn't a good idea.
patio11 18y ago
Google for SXSW Webapp Autopsy. (Oh, heck, I'll do it for you. http://www.readwriteweb.com/archives/sxsw_web_app_autopsy.php http://www.readwriteweb.com/archives/sxsw_web_app_autopsy.ph... ) There is a lot of good in there. Personally I think the data is of limited use even for benchmarking but, eh, your funeral. Users of my downloadable app convert to the paid version at about 1.8%~2.2% most months. There is a bit of guesswork involved there as counting downloads is not quite as reliable as "select count(*) from accounts;" .
vaksel 18y ago
You can't really compare yourself to those guys. Sure they might have ~2% conversion rates...but thats because their users trust that they pay for quality, You on the other hand will be an unknown, so they'll be more hesitant to give up the credit card info. To be on the safe side, put your conversion rate at .5%.
timcederman 18y ago
Where's Andrew Chen when you need him?
- nikhils 18y ago
  Here's Andrew Chen when you need him! http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/ http://andrewchenblog.com/2009/01/19/how-to-create-a-profita... Great post. And thanks for all the other links guys, very useful resources. The SXSW Web App Autopsy deck is very interesting.
catone 18y ago
Ryan Carson shared stats for DropSend a couple of years ago on Vitamin: http://thinkvitamin.com/business/will-your-web-app-make-money/ http://thinkvitamin.com/business/will-your-web-app-make-mone...
pierrefar 18y ago
Don Dodge from Microsoft had this post a long time ago: http://dondodge.typepad.com/the_next_big_thing/2007/05/freemium_free_t.html http://dondodge.typepad.com/the_next_big_thing/2007/05/freem... Money quote: "The average is less than 3% conversion."
zokiboy 18y ago
To cheer things a bit, here are some higher numbers: Flickr: 5-10% Ning: 3% Online free-to-play games: up to 25% TurboTax Online: 70% (!!) Source: http://www.longtail.com/the_long_tail/2008/11/freemium-math-w.html http://www.longtail.com/the_long_tail/2008/11/freemium-math-... My opinion: it depends on a lot of factors. From my experience without much effort you can get 1% users convert. But like I said there a lot of variables that can mess it up or down.
Jem 18y ago
Not flickr or last.fm, but... 16 out of 757 users on one of my sites. I work that out to be 2.1%-ish? (The site opened in November 08)

20 points by nikhils 18y ago

e1ven 18y ago

One link I can give is http://nabeel.typepad.com/brinking/2008/09/theres-been-som.html http://nabeel.typepad.com/brinking/2008/09/theres-been-som.h... Overall, Freemium conversion rates are way down right now. I might suspect that users are feeling less wealthy, and not opting to pay for anything that's not absolutely necessary.

teej 18y ago
Comparing virtual goods sales to premium web app conversions is a bit of a stretch, but I happen to like Nabeel, and I think that link is a good article.
- e1ven 18y ago
  I can absolutely see your point, but I tend to see them as two branches of one tree- You're inviting people into your service for free, and then trying to sell them a higher quality version. The difference is that one transaction is a one-off sale, and the other is a subscription.
  - teej 18y ago
    It's more then that though. People subscribe to web applications for completely different reasons than people whom purchase virtual goods. The demographics, spending patterns, motivations to spend, lifetime value, upsell opportunities and a million other things of the customers differ. Comparing money spent on entertainment and money spent on tools isn't a good idea.

patio11 18y ago

Google for SXSW Webapp Autopsy. (Oh, heck, I'll do it for you. http://www.readwriteweb.com/archives/sxsw_web_app_autopsy.php http://www.readwriteweb.com/archives/sxsw_web_app_autopsy.ph... ) There is a lot of good in there. Personally I think the data is of limited use even for benchmarking but, eh, your funeral. Users of my downloadable app convert to the paid version at about 1.8%~2.2% most months. There is a bit of guesswork involved there as counting downloads is not quite as reliable as "select count(*) from accounts;" .

vaksel 18y ago

You can't really compare yourself to those guys. Sure they might have ~2% conversion rates...but thats because their users trust that they pay for quality, You on the other hand will be an unknown, so they'll be more hesitant to give up the credit card info. To be on the safe side, put your conversion rate at .5%.

timcederman 18y ago

Where's Andrew Chen when you need him?

nikhils 18y ago
Here's Andrew Chen when you need him! http://andrewchenblog.com/2009/01/19/how-to-create-a-profitable-freemium-startup-spreadsheet-model-included/ http://andrewchenblog.com/2009/01/19/how-to-create-a-profita... Great post. And thanks for all the other links guys, very useful resources. The SXSW Web App Autopsy deck is very interesting.

catone 18y ago

Ryan Carson shared stats for DropSend a couple of years ago on Vitamin: http://thinkvitamin.com/business/will-your-web-app-make-money/ http://thinkvitamin.com/business/will-your-web-app-make-mone...

pierrefar 18y ago

Don Dodge from Microsoft had this post a long time ago: http://dondodge.typepad.com/the_next_big_thing/2007/05/freemium_free_t.html http://dondodge.typepad.com/the_next_big_thing/2007/05/freem... Money quote: "The average is less than 3% conversion."

zokiboy 18y ago

To cheer things a bit, here are some higher numbers: Flickr: 5-10% Ning: 3% Online free-to-play games: up to 25% TurboTax Online: 70% (!!) Source: http://www.longtail.com/the_long_tail/2008/11/freemium-math-w.html http://www.longtail.com/the_long_tail/2008/11/freemium-math-... My opinion: it depends on a lot of factors. From my experience without much effort you can get 1% users convert. But like I said there a lot of variables that can mess it up or down.

Jem 18y ago

Not flickr or last.fm, but... 16 out of 757 users on one of my sites. I work that out to be 2.1%-ish? (The site opened in November 08)