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One aspect of freemium models that you are giving seriously short shrift to is that they often have an element of value exchange to them. Additional users free
by olefoo 17y ago
One aspect of freemium models that you are giving seriously short shrift to is that they often have an element of value exchange to them. Additional users free or pro, make the service as a whole more valuable, if the cost of subsidizing a freegan is less than the value they contribute, it's a perfectly rational exchange. This is why craigslist, flickr and myspace were able to sustain that model, the marginal cost of an additional user is usually much less than the utility they provide to the rest of the users.
And that isn't even considering the value of peer production, from mutual support to people building tools within the ecosystem that is hosting them. In your spreadsheet example, the use who posts a widely used rent/own evaluation worksheet is still charged when she uses the site, even though you should be compensating her for the value she adds to the site.
While I like the idea of microbilling, I think it's somewhat orthogonal to freemium models.
- hymanroth 17y agoGood point. But not every web service benefits from the network effect. The spreadsheet example was not chosen at random. As long as you can save you spreadsheet in a common format, would you really choose a service with a higher user base over one that offered much better functionality but with fewer users? There is space for both models. But for web applications I think microbilling has significant advantages