FREE!!! How beneficial is it for the Entertainment Industry?
Freemium is a business model that works by offering creative products (music, movies, softwares and so on) for free, while charging a premium for advanced or special features (like advertising, subscription, etc.). We have all noticed this "freemium" business on the web. The business model essentially works by offering the basic services for free, once the user becomes loyal they may advance to the premium services available. Web sites such Linkedin, Skype, Flickr and more recently Spotify all use this model.
Some say you should not spend money on marketing, offer flexibility and data exporting to eliminate buyers’ regret, make sure to capitalize on and value goodwill, and only charge for things that are hard to do. The word ‘Free’ is still the most powerful word in marketing, not everything has become free just yet - even on the web. The iPhone has demonstrated that millions of people will pay small amounts for applications that entertain and inform, proving that it is still possible to build revenue streams even in our brave new world.
I think it evolved gradually out of clicks and views, as things have begun to get tougher. It is really no different from loss leaders, flat rate pricing, mass media advertising, franchising, Tupperware parties and other Ponzi-type devices intended to build markets. As we know that moving consumers up in price has been a major goal of marketers for many years as a result of greater efficiency and declining margins. How free then can we give our products in this industry to keep and gain more consumers.
Enjoy the video below, as you may or may not get answers to your tasking questions about freemium.
A conversation with Chris Anderson of Wired Magazine.
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