Within IT
The term freemium is said to have been coined by Venture capitalist Fred Wilson.
His firm invests a lot in web 2.0 companies, and freemium was coined to describe a model that was prominent within this area of business.
Giving away a free web service and charging for a “pro” account.
Frequently mentioned examples of freemium in web 2.0 are Flickr and LinkedIn. Over the last few years a lot of web startups are using a freemium model.
Outside IT
As mentioned earlier, a precondition for effective freemium is digital production. As IT businesses are built entirely on digital production, it makes sense that this business model appeared first in the IT industry.
But today digital production is possible in a lot more industries/sectors outside of IT as well. Digitally it is possible to duplicate text, images, audio, video and music.
As a result of this, more and more businesses are starting to adopt the freemium model.
Personally I am most interested in freemium outside the world of IT. As a result of this, tools like “Conversion Calculator” and “Prototyping Freemium” are aimed at non-IT businesses.
An example of this is Nine Inch nails. The way they distributed a free album and sold a range of premium products, perfectly illustrates the potential of this model. There are many different areas where freemium is getting increasingly more relevant including publishing, movie and consultancy.
What would a freemium model look like in your industry? I would love to hear your thoughts.
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1 Comment
Easy answer. I give away the conversational tools - http://edbrenegar.typepad.com/AllIMPACTDiagrams.pdf - and provide mentoring, consulting and facilitation services to those who want to make them work. If they can learn to use the tools without me, that’s fine. I want to work with people whose situations are more difficult to address. And that seems to be working out fine.