How ‘free’ is a freemium model?

how to exploit freemium?

This was one of the questions that I’ve been struggling with as a focus of my research and so I was interested to hear Brian Newman’s interesting take on   freemium models – in a world of ‘free’ – ‘What Will People Pay For’ at  Power To The Pixel, which primarily focussed on film content and distribution.

His presentation was framed by digital writer and publisher, Kevin Kelly’s essay ‘Better Than Free’, which suggests eight things for which customers are prepared to pay.

It’s a tough call and perhaps a little scary giving content away, but I believe that if the story is written with enough intrigue and relevance then you can offer elements of content for free and make your ROI on the offshoots that pivot around the central hub of storyworld.   Pirate Bayers and bit torrenters will always find ways to get what they want for nothing, but by utilising ‘hook’ strategies and value readers/audiences will pay for additional content.

I’m a panellist at Digital Book World in New York in January 2010, where we’ll be discussing adding value and utilising the web and book as commercial allies –  Synergizing the Book and Web: Books Plus in the 21st Century.

Whatever your opinion on ‘free’, one of Newman’s closing comments was along the lines of, “nobody buys a hammer because they want a ‘hammer’.  They buy a hammer to bang a nail into a wall so that they can hang a picture.  Which means they wanted the picture up on the wall and NOT to buy a hammer.   The only reason we go to the cinema is to WATCH stories and because Hollywood wanted our bums on seats or maybe we wanted to get away from our homes or our parents or whatever.”

Which means we can’t ignore WHY we buy books.  I found from my research that many of us love the collectibility and tactile relationship we have with books, but there will always be that emerging audience that realise that they don’t need to go and buy a book because they want to experience a story – especially as we can now connect online and share.

My fictional blog, Staying Single, was entirely free, mostly because it was my MA dissertation and I didn’t want to shift my focus by trying to monetise it.  I blogged chapters daily whilst also offering daily emailed chapters direct to subscribers inboxes,  created short ‘Pulling Power’ mini documentaries on You Tube, podcast chapters, opportunities to meet Sophie in Second Life, chances to interact with Sophie on a series of social networking sites – Facebook, Twitter, MySpace and Bebo.  As part of the story I mocked up front covers of magazines that Sophie and Ade worked for – ‘Woman To Woman’ magazine and ‘Geezer’ magazine.

woman to woman mag I also bridged the fictional digital and real physical worlds by sending Sophie’s business cards in shops and offering to send postcards from Sophie’s holiday to any readers that sent in their address.  (I spent a fortune of my holiday money on 84 postcards and stamps!!  But at least I could see that it was working..)   Ultimately, I was completely overstretched in terms of time and resources and with over 6000 hits in only 4 months and 180 email subscribers , but in a way I was already applying some of the ‘What Will People Pay For’ theories:

  • Immediacy – the blogged story version was a free read, but monetised content could have been to offer a series of choices for receiving/engaging with story instantly – perhaps to have charged a minimal donation for the fragmented chapters emailed daily?  Or a series of webisodes that give an alternative ‘up close and personal’ perspective from individual characters points of view?  Woman To Woman and Geezer magazine could have been so much more than a mocked up front cover – with a team of writers I could have made these real and legitimate short online magazines.
  • Personalisation – Staying Single as a free online read was working, but I wonder whether readers would have paid for a signed, printed ‘book’ version?
  • Authenticity – readers could read Sophie’s experiences for free, but I was overwhelmed at how many people actually wanted a ‘souvenir’ – those pesky postcards!
  • Accessibility – Staying Single was available for free online, but if I’d spread the storyworld across a series of platforms, so that readers could watch the videos, read the chapters or even engage with Sophie’s sister site ‘Sophie Dilemma’ where readers had to vote for which guy she would date – through any device, would they have paid for the convenience?  I mean who wants to continue getting caught checking out fictional blogs and YouTube videos at work?

So, possibly the key to ‘free’ is to build value wherever digital media flows freely.  The values are changing and where old media valued scarcity, ‘new’ media is valuing overabundance and our attention economy is hugely challenged.

In a world where everyone wants ‘the eyeballs’ adding and building value with engaging, immersive storyworlds that offer choices and a sliding scale of immersion does mean so much more time in pre-production and planning (than when writing a trad print-based novel)  but could potentially help in reaching a wider, more dedicated audience….

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3 thoughts on “How ‘free’ is a freemium model?

  1. OK – perhaps I’ve been ‘barking up the wrong tree’ with the Better than Free concept – or maybe I just didn’t look at the possibilities from a balanced view point.

    It has been pointed out to me that perhaps one of the real reasons that ‘free’ works
    is due to existing powerful business models that use free as one side of highly monetizable two-sided markets and that it might not be so relevant in terms of publishing. An extremely valid point made that ‘free’ is a good strategy for artists, less so for middlemen (and publishers are mostly middlemen)!

    I’ve been directed towards reading a Harvard Business Review paper – ‘Strategies for Two-Sided Markets’ – which I am about to do with great interest… (thanks Tim!)

    http://hbr.harvardbusiness.org/2006/10/strategies-for-two-sided-markets/ar/1

    Also see http://www.avc.com/a_vc/2009/10/business-model-jujutsu.html

    It makes sense that all content isn’t free and to offer ‘free’ it’s vital to balance that with paid content, which is what I was suggesting.

    Anyway, I’ll be back with some comments when I’ve soaked in the ‘two-sided-market’ info, but would love to hear what you all think too..

  2. This is certainly interesting and food for thought. I love the ‘two-sided platform’ way of describing these new steps. (Can’t afford HBR so it’ll be interesting to see what your take is, Alison)

    Alexander McCall Smith had Corduroy Mansions online via the Telegraph
    http://www.telegraph.co.uk/culture/books/corduroymansionsbyalexandermcca/. I had a look and loved the concept but wasn’t keen on the story itself. The fact that it was free wasn’t an inducement to read. What I’m trying to say is that “free” needs to be combined with “worthwhile.”

    Your Sophie, Alison, seemed to manage that in a way that AMcSmith doesn’t, for me at least.

  3. Giving content and items of value such as software away Free on the internet has been the marketing norm on the web for the past few years. Of course nothing is free and the download is followed by the offer to up-grade to a better product but at a price. The supermarkets do the same thing with their offers inducing you to visit so that you will fill your basket to their delight.
    I see nothing wrong in this concept – after all you do have the choice to say No!
    Did you know that internet on your TV is becoming more popular..

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