Freemium - Definition
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Freemium Definition Academic Research on Freemium Freemium: attributes of an emerging business model, Pujol, N. (2010). This paper draws concepts from the book The Mind Share Market: The Power of an Alternative Currency to analyse how freemium works as a model and in practice. This paper first provides the necessary foundations to understand the model and describes 13 monetization strategies used in 3 types of freemium: quantity, feature, and distribution. Second, it defines two distinct transactions taking place during the sale cycle: one using money, and the other using mind share as an alternative currency. Third, the paper considers freemium's attributes relative to multi-sided markets, and how their interdependence generates indirect network effects. Thefreemiumbusiness model, Wilson, F. (2006). A VC Blog, March,23, 201. This case study provides details of the conversion rate of Freemium users on different platforms in different categories. Making"freemium" work, Kumar, V. (2014). Harvard business review,92(5), 27-29. The article discusses the "freemium" business model which is used by some Internet businesses and smartphone application developers to give users free basic features of a digital product and access to premium functionality for a subscription fee. The discussion topics include the freemium marketing strategy, the life cycle of upgrades in freemium companies, and the six questions that new business enterprises should explore when considering the freemium model. The article mentions how four companies including NYTimes.com newspaper and Dropbox cloud storage use the freemium model. When should software firms commercialize new products viafreemiumbusiness models, Niculescu, M. F., & Wu, D. J. (2011). Under Review. This paper analyses the challenges faced by firms in the software industry, with emphasis placed on the inability to eectively commercialize innovations. The paper goes on to explain the concept of freemium in the software industry, where freemium is the act of giving out premium services for free for a limited time to get more customers. The paper develops a unifying multi-period microeconomic framework with network externalities embedded into consumer learning in order to capture the essence of conventional key freemium business models such as feature-limited or time-limited, and uniform market seeding models. Making digitalfreemiumbusiness models a success: predicting customers' lifetime value via initial purchase information, Voigt, S., & Hinz, O. (2016). Business & Information Systems Engineering,58(2), 107-118. This paper explores the revenue stream of most businesses that provide software services to users. The paper shows that most businesses get their large revenue from just a bsmall amount of heavy users, thus leading to the interest of companies in finding potential heavy users. The paper observes three digital freemium companies that sell virtual credits and investigate to what extent initial purchase information can be used to determine a given customers lifetime value. Economic essentials of online publishing with associated trends and patterns, Hung, J. (2010). Publishing Research Quarterly,26(2), 79-95. This article takes a look at the common types of revenues and expenses prevalent in the online publishing world, and examines the economic trends and contrasts of upstart entities vs. larger, more established organizations. Through the use of examples and case studies, the article surfaces information that is useful in managing for economic value. Monetizingfreemiumcommunities: Does paying forpremiumincrease social engagement?, Bapna, R., Ramaprasad, J., & Umyarov, A. (2016). This paper advances the notion that social engagement and peer influence are two important drivers of users converting to premium subscribers in such communities. This paper flips the perspective of prior research and ask whether the decision to pay for premium subscription causes users to become more socially engaged. The paper finds that paying for premium leads to an increase in both content-related and community-related social engagement. The paper aims to show that premium subscribers create value not only for themselves but also for the community and site by organizing more content and adding more friends. Social influence on being a pay user infreemium-based social networks, Wang, H., & Chin, A. (2011, March). InAdvanced Information Networking and Applications (AINA), 2011 IEEE International Conference on(pp. 526-533). IEEE. This paper explains the concept and the processes of Freemium services, with emphasis placed on how companies involved in this model generate income. The paper performs an empirical study on the probability of being a pay user under the social influence of pay users in the 59 million friend pairs of Flickr and 61 million friend pairs of Last. The study aims to show that the greater the number of pay users in the three types of influence, the more likely that a user would be a pay user. Designingfreemium: a model of consumer usage, upgrade, and referral dynamics, Lee, C., Kumar, V., & Gupta, S. (2013). MimeoLeung, Michael (2013), Two-step estimation of network formation models with incomplete information. OptimalPricingof Information Goods under theFreemiumStrategy in the Presence of Piracy and Network Effects, Nan, G., Wu, D., Li, M., & Tan, Y. (2016). This paper examines the use of the Freemium model by information goods providers to increase their user base and maximize their profits. This paper investigates the optimal pricing of information goods under the freemium strategy in the presence of piracy and network effects. In this paper, consumers perception change is considered to determine the market structure by a two-stage model. The results show that a portion of consumers who use free version will become paying consumers under some conditions. This result proofs the effectiveness of the Freemium service. TheFreemiumEffect: Why Consumers Perceive More Value with Free Than withPremiumOffers, Niemand, T., Tischer, S., Fritzsche, T., & Kraus, S. (2015). This paper investigates the consequences of offering basic features for free. Based on research complementing the relationship between quality and price, the paper provides evidence for an inversed freemium effect. The effect of free sampling strategies onfreemiumconversion rates, Koch, O. F., & Benlian, A. (2017). Electronic Markets,27(1), 67-76. This paper explores the large number of businesses, firms, games, and softwares that offer Freemium services, and analyses the effect of this model on customer acquisition. Results from observations show that due to the availability of Freemium services, most of these establishments suffer low engagement of Premium users. The paper examines the effect of two common free trial strategies on consumers conversion likelihood: Free first, where consumers start in the free and then opt into a trial of the premium version and Premium First, where things work in reverse.