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How I killed app sales by going freemium

207 points by shuss 11y ago

gambiting 11y ago
I can only guess it's because he was faaar too generous with the credits. One article per day? I send maybe one-two per week. Maybe a better solution would be to give each user 5 credits total, and then they would have to pay to keep sending articles(I would do it as an unlock thing, rather than selling them more credits though).
- dgoldstein0 11y ago
  yeah... definitely. Cut back on the free offering, and make it "pay to use" for anyone who ends up using it anything resembling daily. Also probably worth making it a subscription ($1/month?) instead of credit-based - subscriptions can give dependable revenue, and users wouldn't feel nickle'd and dime'd. Anyhow, the simple lesson here is that freemium isn't a magic bullet - probably takes some time to figure out the right place to put the paywall to get growth / usage via free users, and revenue from not giving everything away for free.
scriptman 11y ago
I think part of the problem with freemium is that it changes your perception of where the value lies. The user discounts the value of the free component to nothing and only measures the value of the additional functionality that is unlocked with buying the premium portion. A lot of the time, this looks like a ripoff. The developer on the other hand tends to look at the value of the whole application and prices the premium portion in consideration of this. I'm not sure that I have a solution, except to say that the developer might be more succesful to discount the value of the free portion to nothing as well and only price the premium portion at a rate that considers the actual value that it adds to the user experience. I think you have to consider the free portion as a marketing expense.
- abhishm 11y ago
  Yup. And the problem now is if its not free, your product is not going to get ANY users. I really hope, everyone starts rolling back on freemium, because its hurting everyone (except customers).
  - mhomde 11y ago
    I would argue that it hurts customers too, at least for some apps. If a developer doesn't get constant revenue there'd be little incentive or resources to update and maintain the app. The customers are then stuck with an app that might have been good but decays over time.
    - abhishm 11y ago
      yeah
    - glesica 11y ago
      Until the next cool freemium app in that space comes out, then the customer just switches to that one. The real problem is that we just don't need 80 gazillion apps. The "app" market is extremely competitive, that's really what people are complaining about, profits have been driven down to basically nothing. Normally you would expect some developers to drop out of the market, which would help the situation, but two things are stopping that from happening, in my opinion. First, the platform companies (Apple and Google) have been incredibly successful at promoting app development as a gold mine. For every developer who gets sick of it and moves on to something else, two people become "app developers". Second, there's a startup bubble and the wisdom out there says you need an app or your startup is nothing. This partly relates to the first point, the hype around "apps", even years after Apple launched the app store, is deafening.
      - rokhayakebe 11y ago
        App stores should try charging people $100/year after the first year an app is in the store. Or the reverse, pay $100 to pull your app from the store after its first year.
bentoner 11y ago
How I killed app sales by switching to metered pricing
- oneeyedpigeon 11y ago
  Which is more-or-less exactly the same as saying "freemium", 99% of the time.
  - nicky0 11y ago
    Not really. Many apps have a one-off "premium features" IAP. Certainly more than 1%.
- huhtenberg 11y ago
  How I killed all goodwill by trying to milk customers.
- raverbashing 11y ago
  I agree with the sentiment, but everything about the service, apart from the app is metered as well (i.e. keeping the server) Selling an app is fine, but never sell the promise of something (a service) forever. If the service is continuous make sure there's a recurrent charge. This is not about nickel-and-diming, this is about keeping your service profitable (or at least covering its costs)
vbsteven 11y ago
Your app is too niche for a freemium model. You Said yourself that the app solves a very specific problem and it's the only app in the store that solves that problem. I would suggest you switch back to up front payment but jack up the price to the 5-10 dollar range. I've seen my revenue triple when switching from 3.99 to 9.99 for a very niche app that was almost without competition. And that was on Android where people are even less likely to pay.
- tjradcliffe 11y ago
  This was my analysis as well, although we both have the benefit of hindsight, and everything is obvious once you know the answer. But it looks to me like the following models are likely optimal: 1) App that solves a trivial problem, no viral potential, lots of competition: free (or don't do it at all). Apps that fall into this category are things like distance measurement, to-do lists, etc. 2) App that has viral potential but lots of competition: freemium (games fall into this category) 3) Niche app that solves a hard problem for a small number of users: paid, with the price as high as possible. There is a fourth category, but it's illusory: app that solves a hard prolbem for many users and has viral potential. If you're an individual dev, the odds are in those areas you'll be facing competition from players with much deeper pockets who are often giving apps away free to drive their core business. This person's experience tends to validate this general analysis.
corobo 11y ago
As someone who would like this sort of app there's no way in a month of Sundays I'd be willing to pay for each article after the first This sort of thing is a one off purchase (if my device does the work) or fixed monthly fee (if your servers do the work)
- btdollar 11y ago
  This seems more fair. But it is weird, because thinking about it, isn't buying N units of work the most fair pricing scheme? I didn't have the same gut reaction to Amazon's Lambda service. Perhaps it is that we know the article limit isn't related to any real-world costs that make the difference.
  - corobo 11y ago
    It's fair but the worry comes in with what happens if I run out of units of work and send a new article. Does it reject the article and I miss out? Does it charge as and when I send an article[1]? Do I get charged extra for unexpected usage? If I have to ponder any one of these questions I'd just switch to a different app, there's a fair few that provide this functionality [1] In this case the main worry is what if I accidentally somehow send every tab I have open to this service through a bug or something? Do I pay or does the app maker take one for the team?
- dublinben 11y ago
  As someone who would also like this sort of app, I can do this completely free with Pocket on my Kobo reader. I don't know why anyone would pay for this service.
mgiannopoulos 11y ago
Previously the user paid 1.99$ for unlimited use, forever. Now you nickle and dime users, forcing them to think about credits, what the value of the service really is, etc.
- oneeyedpigeon 11y ago
  Seemingly, a compromise is required, since "$1.99 for unlimited use, forever" is unsustainable if there are on-going costs.
  - scriptman 11y ago
    This is a really good point. However, there are some apps that do have a model of $xx for unlimited use, even where there are ongoing costs. This is sustainable if the app continues to gain new users, hopefully at an accelerating rate. It works like a pyramid scheme where the new users coming onboard subsidise the cost of the existing users.
    - iopq 11y ago
      Usually they release V3 and discontinue support for version 2. Maybe version 2 is somewhat useful still, but it probably doesn't have support for what you need anymore.
      - ayanray 11y ago
        maybe the ploy should be to get to V3 as quickly as possible as this pyramid / growth rate collapses or cut costs in V2 (cheaper servers, more efficient code - if possible). This is an interesting thought to me nonetheless.
  - mootothemax 11y ago
    I think there's a middle ground to be had though. For example, if the average user sends 1 article per day, offer 400 articles for $1.99, and in theory you have a recurring billing model that also doesn't require too much worrying from the user's point of view. The other model might be $1.99 for unlimited use, and then release V2 of the app with new UI/features, and do an annual release model. It works for many apps, eg developer tools like IntelliJ. Would be interested to know if it works on app stores without getting grumpy user feedback though.
bonobo3000 11y ago
This comes up in advertising all the time - you can increase how many impressions an ad gets easily by just showing it more but the conversion rate depends entirely on the kind of user, match between user & ad than anything else. In this case, the people who paid for the app self-selected themselves by the act of paying, but the barrier to install the free version is much lower than that.
- scriptman 11y ago
  I agree, it's a really complex interaction. You have to consider: 1. The number of users that would never pay for your app, but are happy to download it for free. 2. The number of users that would never pay for your app without trying the free part first. 3. The number of users that would pay for your app without trying it for free. You then have to consider the amount of revenue you lose from Type 3 to support Types 1 and 2. Hopefully you come out ahead, but you may not.
eridius 11y ago
If you want to experiment with letting people try the app for free, you might want to consider just using a single permanent IAP purchase of some higher-than-$1.99 value (say, $4.99 or $9.99) that unlocks unlimited articles. Without this purchase, you could limit them to something like 20 or 50 articles. Enough for them to get a feel for what the app is doing and decide that it's worthwhile. The idea being that anyone that does send enough articles to hit the limit would likely have decided it's useful enough to be willing to pay the higher cost (which they may not have been willing to pay upfront if you simply charged that much). Or you could just go back to your original price, since that was working out. It's hard to say which would do better.
- jpasden 11y ago
  Exactly what I was thinking. "Credits" feel like a huge ripoff.
  - gedrap 11y ago
    The credits makes people think 'Is this article worth sending to my kindle? It costs money to do so. Maybe I should just read it?', that adds loads of friction and poor UX. But the OP was experimenting, so I guess that's all good :)
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kriro 11y ago
I have never read up on app business models but intuitively I'd say in app purchases create unneeded extra friction. Additionally if you pay up front you have a sense of ownership. My guess is that I'd only use freemium when network effects matter. The app described in the article doesn't rely on network effects at all but it's nice to see my gut instinct corroborated experimentally. I'd be interested in seeing this repeated for Android because I'd suspect iOS users are generally more likely to buy stuff.
mhomde 11y ago
I'm launching an app in a couple of weeks and I'm really worried about the revenue model. It's an app that acts to an client to an other service and they'll probably start charging for the API in the near future. I felt like I had a few choices seeing as I'm foolishly doing this full time and need some kind of revenue: 1) Free + Ads 2) Free + Freemium for "pro-features" 3) One-time fee 4) Subscription fee I have a distaste for ads so I really didn't want to go down that road. I don't like freemium because looking at "pro features" and valuing them based on them alone it seldom seems worth it. Also keeping useful features away from non-paying customers seems lose-lose. I could go with a one time fee but then I won't be able to support it over time and the API fee's will eat away any revenue, no matter how small, over time. So I've decided to launch with a subscription yearly fee (through a in-app purchase). From all examples I've seen of changing revenue model to subscription model after you've launched it seems almost impossible without the mob getting out their pitchforks. It also seems more honest to have the subscription carry over than launching a separate new app that you have to buy for future OS versions. Still, mentally users aren't really used to paying subscriptions for an app so it remains to be seen if its successful. Also since most people don't pay for this service itself already there's another mental barrier. Actually if the app wasn't dependent on a service I'd rather see you'd own the app and subscribe to updates, it seems like a much better model since you never lose "ownership" even if you don't pay, but unfortunately app stores don't support that model. I think my app is better than the competitors but will people choose a competitor because of the subscription model? It will be interesting to see.
- kh_hk 11y ago
  Funnily enough, I am just on the opposite side. I've a free API that allows people to build clients for mobile apps (some are free, some are one time fee, etc) and the costs of running this free API are starting to worry me.
  - gscott 11y ago
    I ran a free system and while it is small it easy but as soon as you get tens of thousands of users you are on the hook for all of the background costs while your userbase grows exponentially because they are so happy. Better to have 10 customers then 10,000 free users. I was never able to get free people to pay anything. I bragged about my free users and I felt self-important while taking away my ability to use my time more wisely.
shawnreilly 11y ago
I don't view freemium as a business model, I view it as a distribution model. The distribution model changed from paid to free. This usually results in a user base that grows faster but pays less. By making the app free you've set an expectation of not having to pay. This attracts a certain type of customer, which are usually much harder to convert. If you're trying to build traction for investors this might not matter. If you are trying to monetize then this does matter. The business model changed from a one time purchase model to a micro payment model. My recommendation would be to try a monthly payment model for v3. Let the users pay to access the service (setting an expectation to pay for value) but allow them to pay less than what you perceive to be the cost barrier (the amount you believe is the maximum amount they would pay to give it a try). I'm going to agree with others that you are priced too low. One of the best lessons I've learned is that it's not what you think it's worth, it's what your customer thinks it's worth.
cageface 11y ago
FWIW a while ago I decided to publish a free + IAP version of my iOS photo/video effects app, which was previously a paid-only app. At first the results were a bit disappointing but over time it's grown to generate about three times the revenue of the paid app, and about 20 times the overall user base. I'm sure it's true that freemium is not a panacea but it's worked for me. http://plastaq.com/liquidlens/ http://plastaq.com/liquidlens/
- archagon 11y ago
  Hey, this is off-topic, but I'm working on an app that's in the same market as yours. (MIDI-based DAW-ish thing with an emphasis on ease-of-use. I don't think my app would be competing with any of yours.) If you're willing to share your thoughts, how easy was it get the number of users for, say, Sythe as it has now? Did you do any marketing? Was the relatively high price point ever a problem? Are you considering freemium for that one, too? I was hoping that I could mostly wing it and just make a nice video and send out some review copies to people who might be interested. The music app market seems small enough where this might be possible. But this is just me guessing, and it would be great to hear from someone who's actually had some success in the space. Anyway, loving your design aesthetic! Will give Sythe a download as soon as I charge up my phone. (And, obviously, if this is information you're not willing to share, then no hard feelings! Just thought I'd ask.)
  - cageface 11y ago
    To be honest, Scythe was a huge amount of work and brings in about half of the revenue of my photo effects app, which took about 1/10th of the time to write. Knowing what I know now I would never write another iPad app again, and I'm not sure I'd write another serious music app. If I do decide to write any more music software I'll target the VST plugin market, where people are still willing to pay $99+ for a good instrument. It's a shame because I think the iPad has tremendous potential as a platform for music making but it seems like the volume just isn't there to make up for the low price points users expect for iOS apps. One thing I would do differently if I started from scratch on Scythe today though is make the base app free and make up the difference with IAP preset packs and additional features.
rythie 11y ago
Products with ongoing pricing turn out very expensive in the end. A product that is $10/month will often workout more than one that it is $100 upfront. I prefer iOS apps that you either pay or upfront or, even better, a one-time fee to upgrade. I don't have to worry about ongoing costs then. I'm reminded of ongoing costs everytime I get a statement or receipt, and then I look for alternatives or look to cancel.
chebum 11y ago
Freemium isn’t the only option to allow people try the app before buying it. There are free trials that allows to use the app for several days and then asking to pay the full price to continue using it.
- SiVal 11y ago
  I think Apple would likely reject such a design as being a "demo" version, which is explicitly forbidden--unfortunately.
  - chrisan 11y ago
    Has apple ever given a reason why they dont allow demo/trial apps? A time limited trial seems like the perfect fit for productivity apps, not sure entertainment based apps would want this model. You have a day/week/month to use the app in its entirety, if after the trial you value the product you purchase it, otherwise it no longer works.
    - nicky0 11y ago
      I don't think they ever gave a reason. Personally I like how it has forced developers to come up with more creative product offerings than time limited demos. While convenient for developers, time limited demos suck as a user experience IMO. The whole "trial expired! buy now!" experience is very grating.
      - btdollar 11y ago
        I am fairly certain the "trial expired" experience is exactly the reason. They're also trying to make a commodity out of software and having an app store half full of trial versions doesn't help them with that goal.
  - chebum 11y ago
    Good point. Free trials are currently available for Newsstand apps only: https://developer.apple.com/library/ios/documentation/LanguagesUtilities/Conceptual/iTunesConnectInAppPurchase_Guide/Chapters/CreatingInAppPurchaseProducts.html https://developer.apple.com/library/ios/documentation/Langua...
CodeWriter23 11y ago
I noticed a key metric was missing from your article. What was the average number of transfers per day per user with the original version? The explanation for the drop in sales could be as simple as most of the existing users were doing 1-2 per day...
deleted 11y ago
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EGreg 11y ago
Freemium allows you to have more users and more chances to sell. With a paid app, the same users would have to make a decision to buy based on just a picture, description and reviews. Many freemium apps work really well by selling in-app currency. The most effective ones, sadly, were games that made it increasingly difficult to progress without spending said currency, making people addicted and choosing to spend money instead of time, which they valued more after a certain point. Angry Birds found out two years ago just how much freemium beats the pants off them. Look up pricing tricks online. One is when people see a too-low price that looks out of place next to the others. They think they caught a good opportunity.
opinali 11y ago
Freemium is almost always a scam, remarkably for games where it degenerates into "pay-to-win". As a parent of two young tablet users, I'll happily pay a decent price for any game they want, but I won't allow them to spend even a single cent in in-game crap.
- DanBC 11y ago
  It's kind of scary the number of games aimed at children that have IAPs of £69, and parents sometimes don't know enough to prevent their children spending hundreds of pounds on IAPs. http://www.theguardian.com/technology/appsblog/2013/mar/13/stop-children-spending-money-in-ipad-games http://www.theguardian.com/technology/appsblog/2013/mar/13/s...
  - opinali 11y ago
    I wish we'd crack down on this kind of abuse, but it's an arms race, and at some point hard to distinguish objectively. There's no solution without some parental responsibility... many parents are just too lazy, the hand a device to their kids and hope for the best. Parenting takes some effort; my children's devices have parental control apps (I use and recommend ScreenTime), as for purchases of any kind they have to ask me to put my password every single time because I don't check the "remember" checkbox, it's not terribly hard.
jonahx 11y ago
Great article and I love the experiment, but as the author himself points out this isn't apples to apples. What you really want to see is a freemium version where you get: 1. 3 total articles for free 2. A 1.99 in-app purchase that gives you infinitely more articles. The current free limits are high enough to support the majority of casual readers.
sebastianconcpt 11y ago
1.0 is rewarding use and 2.0 is addig friction to use. For this app to demonstrate value you should be able to freely use. The "buy credits" to do this niche action feels like is not worth. I will risk to say that there is a Cognitive Load inbalance. Fremium induces people to track the economics behind the usage of the freemium app. If the problem it solves is less painful than the Cognitive Load of tracking its fremiumnality, then why bother? It would be interesting to do tests about models without "risking the 1.0s"
timeuser 11y ago
I think the biggest issue is you switched to using credits. That and you've only let this play out for 20 days. People can take quite a while to evaluate an app and decide to purchase. You have more experimenting to do. A one-time upgrade fee for unlimited or a yearly subscription seem like a better fit for how a user would expect to pay for this type of app than credits. At the very least perhaps add an "expensive" unlimited use option and I bet you get some purchases of that.
pcl 11y ago
It'd be interesting to see what the retention numbers were like for those initial v1 users, and how many people use the free version on an ongoing basis. It could be that people stop usin the app after the first week or so anyways.
orasis 11y ago
Fremium only works with high retention apps. The goal with a high retention app is growth, not revenue. You want people to use it a lot, tell their friends and they use it a lot. If you can hit 4%+ week-over-week growth then this is a good candidate for fermium. Anything that has low retention should be charging up front.
andrepd 11y ago
I don't think this is a fair comparison. You changed the business model from v1 to v2, by moving from a one time payment for unlimited articles to a pay-per-article approach. A more suitable change would be to offer the app for free, with 10 free articles and 1 per day, and offer a one time purchase of 1.99 to lift the limits entirely, turning it into the equivalent of v1. The way you did it is you changed it so that the act of sending an article cost money, instead of paying a small one time fee and sending as many articles as you wanted.
- bad_user 11y ago
  As a user I wouldn't understand why each article costs money, therefore I would feel ripped off.
  - hahamrfunnyguy 11y ago
    Exactly this. It just seems the wrong type of app to use a freemium model. No surprises here.
  - Mister_Snuggles 11y ago
    Based on the article, I understand exactly why it costs money - he has to pay for the server that does the hard work. That said, as a developer I don't understand why the server is involved at all. Here's the relevant part of the article: > The server would then fetch the article, format it, package it into a .mobi file the Kindle can deal with and send it to Amazon for delivery to the device. I understand all this, I really do. What I don't understand is why the computer that I'm holding in my hand when I ask for the article to be converted, which is probably as powerful as the $20/mo Linode instance, can't do this conversion itself. Surely it can fetch the article, convert it, and pop up an Email sheet with the attachment ready to go and the "to" address filled in. All it would require is for me to tap the Send button and it would get emailed to my Kindle without having the developer's server involved. This way if the developer decides to discontinue the app and take down the server everyone who purchased it isn't left out in the cold.
    - 11y ago
kalleboo 11y ago
Are there any good examples of successful Freemium apps that sell additional functionality (rather than games or consumables like the article)? The only major examples that come to mind to me are photo apps that sell filter packs. Are there any apps that lock down their major functionality as demoware or upgrades? (like say, "add iCloud support for $2")
- scrollaway 11y ago
  Maybe an abberration but Cyanogenmod's ClockworkMod comes to mind. They provide it for free but the auto updates are paywalled.
- e12e 11y ago
  Google drive/dropbox?
- clarky07 11y ago
  The major fitness apps all do this. Things like runkeeper, map my run, Strava, etc
- Falcon9 11y ago
  Diptic sells additional functionality, some of which I've happily paid for once I realized its value to me. It's been so long that I don't remember if the initial app was free or paid though.
- roel_v 11y ago
  Stronglifts 5x5 app does, Wine Secretary does, several of my children's apps do. These are just a few I can think of that I bought the last week or so.
SalesHelp 11y ago
Would love some insight and helpful advice on sales. We have a product that is ready for paying customers and we have a landing page (only) that is to collect sign ups. We get 100 sign ups a week & up to 15% of those express interest in being customers, but once we get to talking ... after a few emails these talks taper off and even a follow up email leads nowhere. We have had talks with small parties no one has heard to huge Fortune 50 to 500 companies (this week a VP from Lowes started talks, previous Black & Decker, Motorola, Samsung, Beats, etc). It seems most people want to use our unique WEB technology for free, though once we put it on the web these potential customers may just show their true motives of wanting to know how we accomplished X and copy it. Thus, I've been thinking of doing a freemium model myself where users can use part of the product that is not our secret sauce yet have to pay X amount of money to add our secret sauce into the product for their specified use. What do you think is a better sales channel then we have it now and or does my next sales channel idea sound solid?
paulhauggis 11y ago
The startup world has pretty much destroyed future chances of making a living from an application. Sure, the top 10 apps in the apple store might be making good money, but most apps that charge $1.99 will most likely not pay a living wage to the people that created it. The same thing happened to the music industry. The total amount of revenue has dropped 10 fold since 1999. I know a few independent artists and they can't really make a living on just music anymore. They need to sell t-shirts or have a day job. So in the end, free music and file sharing has decreased the overall cost of music, but it really only hurt the small and independent artists. Even look at things like Spotify. 1,000,000 plays nets an artists something like $100. It has forced many artists to go with large labels because the large labels will take all of the risk and actually pay them some sort of a living while they are touring. Software is going the same way. With all of the open source out there (and more coming out every day), it has allowed companies to hire software mechanics for pennies instead of software engineers for a living wage. Why? Because all of the parts that need to be engineered are given out for free. Development now in most businesses is mashing frameworks and libraries together. It really doesn't take a computer science education to get the job done. Business owners are also becoming more tech savvy as the older generation retires. I've never seen so many smart communities of people put themselves out of a job so quickly. To me, apps are just an interfaces to a paid service, not the actual service itself. So, I might have a service that you pay X amount of money to use and the app is something free that is thrown in as a benefit.
- quasiuna 11y ago
  Totally agree with your comments about the music industry, however I don't think the same applies to software development. If many businesses can now get by with "mashing frameworks and libraries together" then that is a good thing - it means problems have been solved in a repeatable way that many people can benefit from, and the real software engineers, rather than doing the same old work over again can refocus on new challenges and create the frameworks and libraries of tomorrow. Is that really a bad thing? The only people putting themselves out of a job are people trying to earn a living working on problems that were solved a long time ago. Suggesting there are fewer jobs now for software engineers than any time in the past is a bit of a stretch!
TimPC 11y ago
Freemium could potentially work here with better calibration. I suspect some of the things that might be important for you users: 1) Unlimited usage or unlimited usage per month -> Managing credits is an annoying experience for when I just want to share an article: I'll have faster ways if the actual transaction is a hassle. Paying once and forgetting about it adds a lot of value. This could work with your original paid model or with a freemium model that includes an unlimited tier. 2) Better analytics to calibrate the use cases: How many articles were people using. Did you have a way to detect how many of the articles were actually being read? I suspect that 1/day might be a very high free tier if people are switching to a mindset of: is this worth being my 1 article a day? Or converting the cost of a paid article and asking "do I want to pay X for sharing this to my kindle?" Other have made the point that a key aspect of freemium is viral growth. Do you have any social sharing features that people would want to use -> Could you share an article to Kindle and/or Facebook + Twitter? Could you get shares of your app in exchange for additional article shares to kindle? If freemium was the right model it might end up at something like: 10 Initial Free shares 1 share/week free 3 shares/week free to device if also shared to a social network A Paid credits/usage tier A Paid Unlimited/time tier (monthly or weekly unlimited use pricing?) And Possibly a paid outright unlimited tier. You'd want to measure and track analytics on how you get users. Something like web bounce links through your own analytics package on the way to the app store. Here you actually have an interesting tradeoff: You get less money per user which you hope to balance out by driving down CAC through large amounts of organic growth. The purpose of freemium is seldom a try before you buy value proposition that makes sense for the company, it's the ability to generate viral growth even out of users who never spend money. If the app won't get substantial viral growth then freemium is almost always wrong.
ddv 11y ago
After averaging $5.00/day for a year with my iOS app using a freemium model ($1.99 in-app purchase), I decided to switch to a paid upfront model just to test. It resulted in a sustained average of $25/day. That's a big deal to me and so counter to everything I read about freemium being the only way to go in today's mobile market.
- tuna-piano 11y ago
  Out of curiosity, what is your app? I'm interested in seeing what kind of app that would happen to.
bigtunacan 11y ago
This bit really hits the nail on the head, "One thing freemium compensates for is the lack of a free trial system in the App Store." There is no reason the app store should not allow developers to offer free trials. This is the one thing that Microsoft got right with the failed Windows phone.
- clarky07 11y ago
  IAP does pretty much the same thing. I understand we wanted trials 6 years ago, but I personally feel like this is a solved problem.
bigtunacan 11y ago
This bit really hits the nail on the head, "One thing freemium compensates for is the lack of a free trial system in the App Store." There is no reason the app store should not allow developers to offer free trials. This is the one thing that Microsoft got right with the failed Windows phone.
jakobegger 11y ago
If people have a specific problem, and your app solves that problem, you don't need a trial. Just tell people in the description that you solve their problem, and they will buy it. Free trials are only necessary when you want to sell solutions to problems that people don't know they have.
bobgod 11y ago
Penis.
bobgod 11y ago
Penis

207 points by shuss 11y ago

I can only guess it's because he was faaar too generous with the credits. One article per day? I send maybe one-two per week. Maybe a better solution would be to give each user 5 credits total, and then they would have to pay to keep sending articles(I would do it as an unlock thing, rather than selling them more credits though).

dgoldstein0 11y ago
yeah... definitely. Cut back on the free offering, and make it "pay to use" for anyone who ends up using it anything resembling daily. Also probably worth making it a subscription ($1/month?) instead of credit-based - subscriptions can give dependable revenue, and users wouldn't feel nickle'd and dime'd. Anyhow, the simple lesson here is that freemium isn't a magic bullet - probably takes some time to figure out the right place to put the paywall to get growth / usage via free users, and revenue from not giving everything away for free.

scriptman 11y ago

I think part of the problem with freemium is that it changes your perception of where the value lies. The user discounts the value of the free component to nothing and only measures the value of the additional functionality that is unlocked with buying the premium portion. A lot of the time, this looks like a ripoff. The developer on the other hand tends to look at the value of the whole application and prices the premium portion in consideration of this. I'm not sure that I have a solution, except to say that the developer might be more succesful to discount the value of the free portion to nothing as well and only price the premium portion at a rate that considers the actual value that it adds to the user experience. I think you have to consider the free portion as a marketing expense.

abhishm 11y ago
Yup. And the problem now is if its not free, your product is not going to get ANY users. I really hope, everyone starts rolling back on freemium, because its hurting everyone (except customers).
- mhomde 11y ago
  I would argue that it hurts customers too, at least for some apps. If a developer doesn't get constant revenue there'd be little incentive or resources to update and maintain the app. The customers are then stuck with an app that might have been good but decays over time.
  - abhishm 11y ago
    yeah
  - glesica 11y ago
    Until the next cool freemium app in that space comes out, then the customer just switches to that one. The real problem is that we just don't need 80 gazillion apps. The "app" market is extremely competitive, that's really what people are complaining about, profits have been driven down to basically nothing. Normally you would expect some developers to drop out of the market, which would help the situation, but two things are stopping that from happening, in my opinion. First, the platform companies (Apple and Google) have been incredibly successful at promoting app development as a gold mine. For every developer who gets sick of it and moves on to something else, two people become "app developers". Second, there's a startup bubble and the wisdom out there says you need an app or your startup is nothing. This partly relates to the first point, the hype around "apps", even years after Apple launched the app store, is deafening.
    - rokhayakebe 11y ago
      App stores should try charging people $100/year after the first year an app is in the store. Or the reverse, pay $100 to pull your app from the store after its first year.

bentoner 11y ago

How I killed app sales by switching to metered pricing

oneeyedpigeon 11y ago
Which is more-or-less exactly the same as saying "freemium", 99% of the time.
- nicky0 11y ago
  Not really. Many apps have a one-off "premium features" IAP. Certainly more than 1%.
huhtenberg 11y ago
How I killed all goodwill by trying to milk customers.
raverbashing 11y ago
I agree with the sentiment, but everything about the service, apart from the app is metered as well (i.e. keeping the server) Selling an app is fine, but never sell the promise of something (a service) forever. If the service is continuous make sure there's a recurrent charge. This is not about nickel-and-diming, this is about keeping your service profitable (or at least covering its costs)

vbsteven 11y ago

Your app is too niche for a freemium model. You Said yourself that the app solves a very specific problem and it's the only app in the store that solves that problem. I would suggest you switch back to up front payment but jack up the price to the 5-10 dollar range. I've seen my revenue triple when switching from 3.99 to 9.99 for a very niche app that was almost without competition. And that was on Android where people are even less likely to pay.

tjradcliffe 11y ago
This was my analysis as well, although we both have the benefit of hindsight, and everything is obvious once you know the answer. But it looks to me like the following models are likely optimal: 1) App that solves a trivial problem, no viral potential, lots of competition: free (or don't do it at all). Apps that fall into this category are things like distance measurement, to-do lists, etc. 2) App that has viral potential but lots of competition: freemium (games fall into this category) 3) Niche app that solves a hard problem for a small number of users: paid, with the price as high as possible. There is a fourth category, but it's illusory: app that solves a hard prolbem for many users and has viral potential. If you're an individual dev, the odds are in those areas you'll be facing competition from players with much deeper pockets who are often giving apps away free to drive their core business. This person's experience tends to validate this general analysis.

corobo 11y ago

As someone who would like this sort of app there's no way in a month of Sundays I'd be willing to pay for each article after the first This sort of thing is a one off purchase (if my device does the work) or fixed monthly fee (if your servers do the work)

btdollar 11y ago
This seems more fair. But it is weird, because thinking about it, isn't buying N units of work the most fair pricing scheme? I didn't have the same gut reaction to Amazon's Lambda service. Perhaps it is that we know the article limit isn't related to any real-world costs that make the difference.
- corobo 11y ago
  It's fair but the worry comes in with what happens if I run out of units of work and send a new article. Does it reject the article and I miss out? Does it charge as and when I send an article[1]? Do I get charged extra for unexpected usage? If I have to ponder any one of these questions I'd just switch to a different app, there's a fair few that provide this functionality [1] In this case the main worry is what if I accidentally somehow send every tab I have open to this service through a bug or something? Do I pay or does the app maker take one for the team?
dublinben 11y ago
As someone who would also like this sort of app, I can do this completely free with Pocket on my Kobo reader. I don't know why anyone would pay for this service.

mgiannopoulos 11y ago

Previously the user paid 1.99$ for unlimited use, forever. Now you nickle and dime users, forcing them to think about credits, what the value of the service really is, etc.

oneeyedpigeon 11y ago
Seemingly, a compromise is required, since "$1.99 for unlimited use, forever" is unsustainable if there are on-going costs.
- scriptman 11y ago
  This is a really good point. However, there are some apps that do have a model of $xx for unlimited use, even where there are ongoing costs. This is sustainable if the app continues to gain new users, hopefully at an accelerating rate. It works like a pyramid scheme where the new users coming onboard subsidise the cost of the existing users.
  - iopq 11y ago
    Usually they release V3 and discontinue support for version 2. Maybe version 2 is somewhat useful still, but it probably doesn't have support for what you need anymore.
    - ayanray 11y ago
      maybe the ploy should be to get to V3 as quickly as possible as this pyramid / growth rate collapses or cut costs in V2 (cheaper servers, more efficient code - if possible). This is an interesting thought to me nonetheless.
- mootothemax 11y ago
  I think there's a middle ground to be had though. For example, if the average user sends 1 article per day, offer 400 articles for $1.99, and in theory you have a recurring billing model that also doesn't require too much worrying from the user's point of view. The other model might be $1.99 for unlimited use, and then release V2 of the app with new UI/features, and do an annual release model. It works for many apps, eg developer tools like IntelliJ. Would be interested to know if it works on app stores without getting grumpy user feedback though.

bonobo3000 11y ago

This comes up in advertising all the time - you can increase how many impressions an ad gets easily by just showing it more but the conversion rate depends entirely on the kind of user, match between user & ad than anything else. In this case, the people who paid for the app self-selected themselves by the act of paying, but the barrier to install the free version is much lower than that.

scriptman 11y ago
I agree, it's a really complex interaction. You have to consider: 1. The number of users that would never pay for your app, but are happy to download it for free. 2. The number of users that would never pay for your app without trying the free part first. 3. The number of users that would pay for your app without trying it for free. You then have to consider the amount of revenue you lose from Type 3 to support Types 1 and 2. Hopefully you come out ahead, but you may not.

eridius 11y ago

If you want to experiment with letting people try the app for free, you might want to consider just using a single permanent IAP purchase of some higher-than-$1.99 value (say, $4.99 or $9.99) that unlocks unlimited articles. Without this purchase, you could limit them to something like 20 or 50 articles. Enough for them to get a feel for what the app is doing and decide that it's worthwhile. The idea being that anyone that does send enough articles to hit the limit would likely have decided it's useful enough to be willing to pay the higher cost (which they may not have been willing to pay upfront if you simply charged that much). Or you could just go back to your original price, since that was working out. It's hard to say which would do better.

jpasden 11y ago
Exactly what I was thinking. "Credits" feel like a huge ripoff.
- gedrap 11y ago
  The credits makes people think 'Is this article worth sending to my kindle? It costs money to do so. Maybe I should just read it?', that adds loads of friction and poor UX. But the OP was experimenting, so I guess that's all good :)

deleted 11y ago

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kriro 11y ago

I have never read up on app business models but intuitively I'd say in app purchases create unneeded extra friction. Additionally if you pay up front you have a sense of ownership. My guess is that I'd only use freemium when network effects matter. The app described in the article doesn't rely on network effects at all but it's nice to see my gut instinct corroborated experimentally. I'd be interested in seeing this repeated for Android because I'd suspect iOS users are generally more likely to buy stuff.

mhomde 11y ago

I'm launching an app in a couple of weeks and I'm really worried about the revenue model. It's an app that acts to an client to an other service and they'll probably start charging for the API in the near future. I felt like I had a few choices seeing as I'm foolishly doing this full time and need some kind of revenue: 1) Free + Ads 2) Free + Freemium for "pro-features" 3) One-time fee 4) Subscription fee I have a distaste for ads so I really didn't want to go down that road. I don't like freemium because looking at "pro features" and valuing them based on them alone it seldom seems worth it. Also keeping useful features away from non-paying customers seems lose-lose. I could go with a one time fee but then I won't be able to support it over time and the API fee's will eat away any revenue, no matter how small, over time. So I've decided to launch with a subscription yearly fee (through a in-app purchase). From all examples I've seen of changing revenue model to subscription model after you've launched it seems almost impossible without the mob getting out their pitchforks. It also seems more honest to have the subscription carry over than launching a separate new app that you have to buy for future OS versions. Still, mentally users aren't really used to paying subscriptions for an app so it remains to be seen if its successful. Also since most people don't pay for this service itself already there's another mental barrier. Actually if the app wasn't dependent on a service I'd rather see you'd own the app and subscribe to updates, it seems like a much better model since you never lose "ownership" even if you don't pay, but unfortunately app stores don't support that model. I think my app is better than the competitors but will people choose a competitor because of the subscription model? It will be interesting to see.

kh_hk 11y ago
Funnily enough, I am just on the opposite side. I've a free API that allows people to build clients for mobile apps (some are free, some are one time fee, etc) and the costs of running this free API are starting to worry me.
- gscott 11y ago
  I ran a free system and while it is small it easy but as soon as you get tens of thousands of users you are on the hook for all of the background costs while your userbase grows exponentially because they are so happy. Better to have 10 customers then 10,000 free users. I was never able to get free people to pay anything. I bragged about my free users and I felt self-important while taking away my ability to use my time more wisely.

shawnreilly 11y ago

I don't view freemium as a business model, I view it as a distribution model. The distribution model changed from paid to free. This usually results in a user base that grows faster but pays less. By making the app free you've set an expectation of not having to pay. This attracts a certain type of customer, which are usually much harder to convert. If you're trying to build traction for investors this might not matter. If you are trying to monetize then this does matter. The business model changed from a one time purchase model to a micro payment model. My recommendation would be to try a monthly payment model for v3. Let the users pay to access the service (setting an expectation to pay for value) but allow them to pay less than what you perceive to be the cost barrier (the amount you believe is the maximum amount they would pay to give it a try). I'm going to agree with others that you are priced too low. One of the best lessons I've learned is that it's not what you think it's worth, it's what your customer thinks it's worth.

cageface 11y ago

FWIW a while ago I decided to publish a free + IAP version of my iOS photo/video effects app, which was previously a paid-only app. At first the results were a bit disappointing but over time it's grown to generate about three times the revenue of the paid app, and about 20 times the overall user base. I'm sure it's true that freemium is not a panacea but it's worked for me. http://plastaq.com/liquidlens/ http://plastaq.com/liquidlens/

archagon 11y ago
Hey, this is off-topic, but I'm working on an app that's in the same market as yours. (MIDI-based DAW-ish thing with an emphasis on ease-of-use. I don't think my app would be competing with any of yours.) If you're willing to share your thoughts, how easy was it get the number of users for, say, Sythe as it has now? Did you do any marketing? Was the relatively high price point ever a problem? Are you considering freemium for that one, too? I was hoping that I could mostly wing it and just make a nice video and send out some review copies to people who might be interested. The music app market seems small enough where this might be possible. But this is just me guessing, and it would be great to hear from someone who's actually had some success in the space. Anyway, loving your design aesthetic! Will give Sythe a download as soon as I charge up my phone. (And, obviously, if this is information you're not willing to share, then no hard feelings! Just thought I'd ask.)
- cageface 11y ago
  To be honest, Scythe was a huge amount of work and brings in about half of the revenue of my photo effects app, which took about 1/10th of the time to write. Knowing what I know now I would never write another iPad app again, and I'm not sure I'd write another serious music app. If I do decide to write any more music software I'll target the VST plugin market, where people are still willing to pay $99+ for a good instrument. It's a shame because I think the iPad has tremendous potential as a platform for music making but it seems like the volume just isn't there to make up for the low price points users expect for iOS apps. One thing I would do differently if I started from scratch on Scythe today though is make the base app free and make up the difference with IAP preset packs and additional features.

rythie 11y ago

Products with ongoing pricing turn out very expensive in the end. A product that is $10/month will often workout more than one that it is $100 upfront. I prefer iOS apps that you either pay or upfront or, even better, a one-time fee to upgrade. I don't have to worry about ongoing costs then. I'm reminded of ongoing costs everytime I get a statement or receipt, and then I look for alternatives or look to cancel.

chebum 11y ago

Freemium isn’t the only option to allow people try the app before buying it. There are free trials that allows to use the app for several days and then asking to pay the full price to continue using it.

SiVal 11y ago
I think Apple would likely reject such a design as being a "demo" version, which is explicitly forbidden--unfortunately.
- chrisan 11y ago
  Has apple ever given a reason why they dont allow demo/trial apps? A time limited trial seems like the perfect fit for productivity apps, not sure entertainment based apps would want this model. You have a day/week/month to use the app in its entirety, if after the trial you value the product you purchase it, otherwise it no longer works.
  - nicky0 11y ago
    I don't think they ever gave a reason. Personally I like how it has forced developers to come up with more creative product offerings than time limited demos. While convenient for developers, time limited demos suck as a user experience IMO. The whole "trial expired! buy now!" experience is very grating.
    - btdollar 11y ago
      I am fairly certain the "trial expired" experience is exactly the reason. They're also trying to make a commodity out of software and having an app store half full of trial versions doesn't help them with that goal.
- chebum 11y ago
  Good point. Free trials are currently available for Newsstand apps only: https://developer.apple.com/library/ios/documentation/LanguagesUtilities/Conceptual/iTunesConnectInAppPurchase_Guide/Chapters/CreatingInAppPurchaseProducts.html https://developer.apple.com/library/ios/documentation/Langua...

CodeWriter23 11y ago

I noticed a key metric was missing from your article. What was the average number of transfers per day per user with the original version? The explanation for the drop in sales could be as simple as most of the existing users were doing 1-2 per day...

deleted 11y ago

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EGreg 11y ago

Freemium allows you to have more users and more chances to sell. With a paid app, the same users would have to make a decision to buy based on just a picture, description and reviews. Many freemium apps work really well by selling in-app currency. The most effective ones, sadly, were games that made it increasingly difficult to progress without spending said currency, making people addicted and choosing to spend money instead of time, which they valued more after a certain point. Angry Birds found out two years ago just how much freemium beats the pants off them. Look up pricing tricks online. One is when people see a too-low price that looks out of place next to the others. They think they caught a good opportunity.

opinali 11y ago

Freemium is almost always a scam, remarkably for games where it degenerates into "pay-to-win". As a parent of two young tablet users, I'll happily pay a decent price for any game they want, but I won't allow them to spend even a single cent in in-game crap.

DanBC 11y ago
It's kind of scary the number of games aimed at children that have IAPs of £69, and parents sometimes don't know enough to prevent their children spending hundreds of pounds on IAPs. http://www.theguardian.com/technology/appsblog/2013/mar/13/stop-children-spending-money-in-ipad-games http://www.theguardian.com/technology/appsblog/2013/mar/13/s...
- opinali 11y ago
  I wish we'd crack down on this kind of abuse, but it's an arms race, and at some point hard to distinguish objectively. There's no solution without some parental responsibility... many parents are just too lazy, the hand a device to their kids and hope for the best. Parenting takes some effort; my children's devices have parental control apps (I use and recommend ScreenTime), as for purchases of any kind they have to ask me to put my password every single time because I don't check the "remember" checkbox, it's not terribly hard.

jonahx 11y ago

Great article and I love the experiment, but as the author himself points out this isn't apples to apples. What you really want to see is a freemium version where you get: 1. 3 total articles for free 2. A 1.99 in-app purchase that gives you infinitely more articles. The current free limits are high enough to support the majority of casual readers.

sebastianconcpt 11y ago

1.0 is rewarding use and 2.0 is addig friction to use. For this app to demonstrate value you should be able to freely use. The "buy credits" to do this niche action feels like is not worth. I will risk to say that there is a Cognitive Load inbalance. Fremium induces people to track the economics behind the usage of the freemium app. If the problem it solves is less painful than the Cognitive Load of tracking its fremiumnality, then why bother? It would be interesting to do tests about models without "risking the 1.0s"

timeuser 11y ago

I think the biggest issue is you switched to using credits. That and you've only let this play out for 20 days. People can take quite a while to evaluate an app and decide to purchase. You have more experimenting to do. A one-time upgrade fee for unlimited or a yearly subscription seem like a better fit for how a user would expect to pay for this type of app than credits. At the very least perhaps add an "expensive" unlimited use option and I bet you get some purchases of that.

pcl 11y ago

It'd be interesting to see what the retention numbers were like for those initial v1 users, and how many people use the free version on an ongoing basis. It could be that people stop usin the app after the first week or so anyways.

orasis 11y ago

Fremium only works with high retention apps. The goal with a high retention app is growth, not revenue. You want people to use it a lot, tell their friends and they use it a lot. If you can hit 4%+ week-over-week growth then this is a good candidate for fermium. Anything that has low retention should be charging up front.

andrepd 11y ago

I don't think this is a fair comparison. You changed the business model from v1 to v2, by moving from a one time payment for unlimited articles to a pay-per-article approach. A more suitable change would be to offer the app for free, with 10 free articles and 1 per day, and offer a one time purchase of 1.99 to lift the limits entirely, turning it into the equivalent of v1. The way you did it is you changed it so that the act of sending an article cost money, instead of paying a small one time fee and sending as many articles as you wanted.

bad_user 11y ago
As a user I wouldn't understand why each article costs money, therefore I would feel ripped off.
- hahamrfunnyguy 11y ago
  Exactly this. It just seems the wrong type of app to use a freemium model. No surprises here.
- Mister_Snuggles 11y ago
  Based on the article, I understand exactly why it costs money - he has to pay for the server that does the hard work. That said, as a developer I don't understand why the server is involved at all. Here's the relevant part of the article: > The server would then fetch the article, format it, package it into a .mobi file the Kindle can deal with and send it to Amazon for delivery to the device. I understand all this, I really do. What I don't understand is why the computer that I'm holding in my hand when I ask for the article to be converted, which is probably as powerful as the $20/mo Linode instance, can't do this conversion itself. Surely it can fetch the article, convert it, and pop up an Email sheet with the attachment ready to go and the "to" address filled in. All it would require is for me to tap the Send button and it would get emailed to my Kindle without having the developer's server involved. This way if the developer decides to discontinue the app and take down the server everyone who purchased it isn't left out in the cold.
  - 11y ago

kalleboo 11y ago

Are there any good examples of successful Freemium apps that sell additional functionality (rather than games or consumables like the article)? The only major examples that come to mind to me are photo apps that sell filter packs. Are there any apps that lock down their major functionality as demoware or upgrades? (like say, "add iCloud support for $2")

scrollaway 11y ago
Maybe an abberration but Cyanogenmod's ClockworkMod comes to mind. They provide it for free but the auto updates are paywalled.
e12e 11y ago
Google drive/dropbox?
clarky07 11y ago
The major fitness apps all do this. Things like runkeeper, map my run, Strava, etc
Falcon9 11y ago
Diptic sells additional functionality, some of which I've happily paid for once I realized its value to me. It's been so long that I don't remember if the initial app was free or paid though.
roel_v 11y ago
Stronglifts 5x5 app does, Wine Secretary does, several of my children's apps do. These are just a few I can think of that I bought the last week or so.

SalesHelp 11y ago

Would love some insight and helpful advice on sales. We have a product that is ready for paying customers and we have a landing page (only) that is to collect sign ups. We get 100 sign ups a week & up to 15% of those express interest in being customers, but once we get to talking ... after a few emails these talks taper off and even a follow up email leads nowhere. We have had talks with small parties no one has heard to huge Fortune 50 to 500 companies (this week a VP from Lowes started talks, previous Black & Decker, Motorola, Samsung, Beats, etc). It seems most people want to use our unique WEB technology for free, though once we put it on the web these potential customers may just show their true motives of wanting to know how we accomplished X and copy it. Thus, I've been thinking of doing a freemium model myself where users can use part of the product that is not our secret sauce yet have to pay X amount of money to add our secret sauce into the product for their specified use. What do you think is a better sales channel then we have it now and or does my next sales channel idea sound solid?

paulhauggis 11y ago

The startup world has pretty much destroyed future chances of making a living from an application. Sure, the top 10 apps in the apple store might be making good money, but most apps that charge $1.99 will most likely not pay a living wage to the people that created it. The same thing happened to the music industry. The total amount of revenue has dropped 10 fold since 1999. I know a few independent artists and they can't really make a living on just music anymore. They need to sell t-shirts or have a day job. So in the end, free music and file sharing has decreased the overall cost of music, but it really only hurt the small and independent artists. Even look at things like Spotify. 1,000,000 plays nets an artists something like $100. It has forced many artists to go with large labels because the large labels will take all of the risk and actually pay them some sort of a living while they are touring. Software is going the same way. With all of the open source out there (and more coming out every day), it has allowed companies to hire software mechanics for pennies instead of software engineers for a living wage. Why? Because all of the parts that need to be engineered are given out for free. Development now in most businesses is mashing frameworks and libraries together. It really doesn't take a computer science education to get the job done. Business owners are also becoming more tech savvy as the older generation retires. I've never seen so many smart communities of people put themselves out of a job so quickly. To me, apps are just an interfaces to a paid service, not the actual service itself. So, I might have a service that you pay X amount of money to use and the app is something free that is thrown in as a benefit.

quasiuna 11y ago
Totally agree with your comments about the music industry, however I don't think the same applies to software development. If many businesses can now get by with "mashing frameworks and libraries together" then that is a good thing - it means problems have been solved in a repeatable way that many people can benefit from, and the real software engineers, rather than doing the same old work over again can refocus on new challenges and create the frameworks and libraries of tomorrow. Is that really a bad thing? The only people putting themselves out of a job are people trying to earn a living working on problems that were solved a long time ago. Suggesting there are fewer jobs now for software engineers than any time in the past is a bit of a stretch!

TimPC 11y ago

Freemium could potentially work here with better calibration. I suspect some of the things that might be important for you users: 1) Unlimited usage or unlimited usage per month -> Managing credits is an annoying experience for when I just want to share an article: I'll have faster ways if the actual transaction is a hassle. Paying once and forgetting about it adds a lot of value. This could work with your original paid model or with a freemium model that includes an unlimited tier. 2) Better analytics to calibrate the use cases: How many articles were people using. Did you have a way to detect how many of the articles were actually being read? I suspect that 1/day might be a very high free tier if people are switching to a mindset of: is this worth being my 1 article a day? Or converting the cost of a paid article and asking "do I want to pay X for sharing this to my kindle?" Other have made the point that a key aspect of freemium is viral growth. Do you have any social sharing features that people would want to use -> Could you share an article to Kindle and/or Facebook + Twitter? Could you get shares of your app in exchange for additional article shares to kindle? If freemium was the right model it might end up at something like: 10 Initial Free shares 1 share/week free 3 shares/week free to device if also shared to a social network A Paid credits/usage tier A Paid Unlimited/time tier (monthly or weekly unlimited use pricing?) And Possibly a paid outright unlimited tier. You'd want to measure and track analytics on how you get users. Something like web bounce links through your own analytics package on the way to the app store. Here you actually have an interesting tradeoff: You get less money per user which you hope to balance out by driving down CAC through large amounts of organic growth. The purpose of freemium is seldom a try before you buy value proposition that makes sense for the company, it's the ability to generate viral growth even out of users who never spend money. If the app won't get substantial viral growth then freemium is almost always wrong.

ddv 11y ago

After averaging $5.00/day for a year with my iOS app using a freemium model ($1.99 in-app purchase), I decided to switch to a paid upfront model just to test. It resulted in a sustained average of $25/day. That's a big deal to me and so counter to everything I read about freemium being the only way to go in today's mobile market.

tuna-piano 11y ago
Out of curiosity, what is your app? I'm interested in seeing what kind of app that would happen to.

bigtunacan 11y ago

This bit really hits the nail on the head, "One thing freemium compensates for is the lack of a free trial system in the App Store." There is no reason the app store should not allow developers to offer free trials. This is the one thing that Microsoft got right with the failed Windows phone.

clarky07 11y ago
IAP does pretty much the same thing. I understand we wanted trials 6 years ago, but I personally feel like this is a solved problem.

bigtunacan 11y ago

jakobegger 11y ago

If people have a specific problem, and your app solves that problem, you don't need a trial. Just tell people in the description that you solve their problem, and they will buy it. Free trials are only necessary when you want to sell solutions to problems that people don't know they have.

bobgod 11y ago

Penis.

bobgod 11y ago

Penis