Is freemium still working?


4

We've heard from several formerly wildly successful software/webapp companies using the freemium business model that it is no longer working well. Does anyone have any validation to this? And if yes, what are these companies attempting to do instead to bring in revenue?

Pricing Business Model Freemium Web App

asked Oct 15 '11 at 05:10
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Sydney Stavrou
21 points

2 Answers


2

It is hard to give a good answer without more direct examples, but I am guessing the companies you are using for your datapoints have either been eclipsed by other offerings (eg: Facebook > Friendster), or are offering products/services that no longer have large value or hype (eg: YetAnotherDailyDealsSite, YetAnotherCheckinSite)

The freemium concept works well to attract initial users while posing little risk or barrier to them. But, you still need to get them to use and value your service in order to convert them from free to premium. These are two distinct things to tackle: 1) Creating of novel site 2) User conversion/monetization of novel site. For many people, the second item is harder to accomplish than the first one, so freemium sites fail for lack of overall skillset of the management team, not lack of viability of the sales model.

answered Oct 18 '11 at 13:35
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Brian Karas
3,407 points

1

Freemium works well for some and not others.

Just like almost any other advice about startups, there is not a single set of rules for success, or everyone would follow them.

So does freemium still work? Yes if it suits your business. If it doesn't suit your business, then no it won't work.

You might find relevant information here To Freemium or not to Freemium?.

answered Oct 18 '11 at 15:32
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Joel Friedlaender
5,007 points

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Pricing Business Model Freemium Web App