Freemium – Gabriel Catalano®

MBA Mondays: Revenue Models – Gaming // thnxz to @fredwilson – avc.com

This is the last post in the revenue model series, which is based on the peer produced revenue model hackpad we created at the start of the series.

Gaming is interesting because there are a number of revenue options that game developers can choose from when thinking about how to make money from their game. The hackpad lists the following:

There is still a sizeable business in selling a version of the game to the game player. That’s how the console game (xbox, etc) market works. It is also how downloadable games market works. And there is a vibrant market in mobile games that you have to pay for to play.

But the games market has been moving to newer models in recent years. In app upgrades is certainly one of the more important revenue models. Many of the most popular mobile games are free to play but offer in app upgrades to get more game elements or simply to eliminate the ads. This is an example of the freemium business model in action.

Advertising is another important revenue model. For many web based games, advertising is the dominant form of revenue. On mobile, advertising supports the free offer and the elimination of advertising is often the value proposition for the in app upgrade.

The revenue model that is mostly (but not totally) unique to gaming is virtual goods. Virtual goods (like a tractor in Farmville) allow the player to have more capability in the game and they can be earned over time but are often purchased to enhance game play. This revenue model was inititally created in the asian gaming market but has been adopted by game developers all over the world.

Full article

Cómo utilizar el modelo Freemium (y no ir a la quiebra)

Autor: Lincinews

Hace un tiempo, los modelos de negocio freemium eran la moda- es decir, regalar una parte de tus servicios en línea mientras cargas un pequeño porcentaje a los clientes por las versiones premium. A este tipo de empresas como LinkedIn, Dropbox y Skype parecía irles bien. El editor de Wired Chris Anderson publicó el libro definitivo sobre el modelo freemium en 2009.

Avanzando rápidamente hasta el 2012, algunas empresas se quedaron atrapadas con “costos de operación muy altos y miles de aprovechadores (freeloaders)”, como señala The Wall Street Journal. Una compañía llamada Chargify, ofrecía un software de gestión de facturas… Continuar leyendo «Cómo utilizar el modelo Freemium (y no ir a la quiebra)»

Freemium has run its course | By Rags Srinivasan

By Rags Srinivasan, management professional
http://gigaom.com

“We are now seeing the end of the freemium model — signing up users for free and trying to upsell,” said Christian Vanek, CEO of the Boulder-based SurveyGizmo, in a recent phone conversation.

“6.5 million unique users is not all that it’s cracked up to be. I don’t want hits. I want revenue. I want a real business,” said Matt Wensing, founder and CEO of Stormpulse, in an interview with Mixergy.

“Make a product people want to pay for,” said Marco Arment, founder of Instapaper, in a Planet Money interview.

Three easily available examples do not make indisputable evidence against freemium. Just like Dropbox, Evernote and RememberTheMilk do not make a case for freemium. But these three quotes reflect a return to the roots of marketing — starting with customer needs, choosing the needs you want to serve and getting your fair share of the value created.

In the oft-cited Hershey’s experiment that started the free-mania, behavioral economists from MIT tested customer preference for Hershey’s and Ferrero Rocher chocolates at two different price points. For one group, they offered Hershey’s at one cent and Ferrero Rocher for 26 cents. For another, they offered the chocolates at zero cents and 25 cents respectively. When the Hershey’s chocolate was free and the Ferrero Rocher chocolate was 25 cents, 90 percent of the participants chose Hershey’s. $0 price seems to have done the magic in driving customer adoption. The result became the foundation of the freemium school of thought — free is free marketing. First use the free version to drive adoption and build a large customer base, and then find ways to monetize that base by upselling the paid version and selling extras.

Ninety percent is an eye-catching statistic in books about the freemium model, but let’s stop and ask some basic questions about running a profitable venture.

What do you know about your target customers?
What urgent needs do the free and paid versions meet for these customers?
Will the products remain relevant in the customers’ future?
If fifty other sellers stand next to you and give away free Hershey’s chocolates, Skittles etc., what will happen to your share of the market?
As a startup founder, which customers should you focus on first with your limited resources?

The five questions above are the key principles of marketing… Continuar leyendo «Freemium has run its course | By Rags Srinivasan»

Freemium… ¿el modelo de negocio de los vagos?

http://ciclog.blogspot.com.es

Estamos viviendo una sorprendente explosión de nuevos modelos de negocio basados en Internet, consecuencia de sus bajas barreras de entrada y la creciente sensación de burbuja asociada al sector. Muchos de ellos se han planteado sobre modelosfreemium, donde una pequeña base de usuarios “paga la fiesta” de una gran mayoría que obtiene unos servicios gratuitos.. ¿tiene sentido?

¿Por qué está de moda el freemium?

El auge de este tipo de modelos de negocio se debe a varios factores, algunos con más sentido que otros:

Cultura de lo gratis: Aunque visto desde fuera pueda resultar absurdo, lo cierto es que nos hemos acostumbrado a que en Internet todo debe ser gratis. Hay una tremenda barrera en conseguir que alguien pague por un servicio online, lo que resulta curioso, ya que en la vida real no tenemos ningún problema en acudir a nuestro gestor y pagarle por hacernos la declaración de la renta… ¿y sin embargo en el momento que un servicio es online consideramos que por defecto se nos debería dar gratuitamente?.

Coste de servicio y escalabilidad: En modelos de negocio muy escalables (como suelen ser los freemium) el coste de prestar un servicio “puro” basado en Internet tiende a cero… lo que parcialmente apoya el argumento de la gratuidad. Pero la clave es que tiende a cero… pero NO es cero. Alguien tiene que pagar la estructura de costes, por ligera que ésta sea.

Google, Facebook…etc: Los puntos de referencia, podríamos decir ídolos sagrados de los emprendedores en Internet, trabajan con modelos de negocio freemium. De hecho es habitual que alguien te diga: “Youtube al principio perdía 1 millon de dólares al día… y mira ahora”. El problema base de esos razonamientos es que, por cada Google y Facebook, han nacido millones de startups que han muerto en la más absoluta pobreza… y en el caso de Youtube la empresa matriz Google ya tenía un modelo de negocio rentable capaz de “pagar la fiesta”. Continuar leyendo

Mobile Games: The Economics of Freemium [Infographic]

by Linda Bustos | http://www.getelastic.com

Who creates a game only to give it away for free? Where’s the $$ in that?

The freemium business model is taking over — an estimated 65% of revenue generated by the 100 top grossing apps in the App Store, and an estimated 72% of total App Store revenue comes from freemium mobile games. In-game purchases like extra lives, special powers, virtual goods and personalizations are driving the revenue.

This week’s Infographic Friday is homegrown, featuring snippets of findings from our latest research report Cashing in on the Smartphone Gaming Boom that examine avid and causal mobile gamers’ in-app spending habits.