The freemium economy

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Group 1 Thomas Beauchemin Justine Bohelay Camille Bruzeau Iona Casta Magny Dan Assous Margaux Bervas

Transcript of The freemium economy

Page 1: The freemium economy

Group 1 Thomas Beauchemin

Justine BohelayCamille Bruzeau

Iona Casta Magny Dan Assous

Margaux Bervas

Page 2: The freemium economy

KEY CONCEPTS

= €-ESTABLISHMENT OF A FREE SERVICE

HIGH NUMBER OF USERS

PROPOSE PREMIUM FUNCTIONALITIES

CONVERT A PART OF FREE USERS INTO PREMIUM USERS

FUND THE FREE SERVICE BY THE PREMIUM SERVICE

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KEY CONCEPTSTo create a Freemium Business Model:

-The target market has to be important

-The Premium service has to provide a real added value compared to the Free service

-The cost of the Free service must be low

-Need to find a good strategy to convert free users into premium users

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WHY HAS FREEMIUM STARTED?

With the commercialization of internet people got used to getting access to more things without paying

Ancestor of « Freemium » : Shareware (1980)

Emerged as a model where product/service is available for free trial but with restrictions (functionability, availability, convenience..)

Freemium concept appeared later in the mid 2000 First recorded use of the term : Venture capitalist Fred Wilson in 2006

The Freemium model than shifted to other sectors :• video games (free-to-play games such as League of Legends or World of

Warcraft)• phone applications that generates tons of money (Candy Crush,

Evernote…)

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HOW DO WE TRANSFER FREE IN MONEY?

-Several ways to transform free into money

-Most common way: advertising

-Other systems: motivation to buy Premium version after free “Lite” Version

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HOW DO WE TRANSFER FREE IN MONEY?

-In-App purchaseso Improvementso New data

-Free services created to sell after gain of recognition

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WHAT ARE THE DIFFERENT MODELS OF VALUATION OF CONTENT?

• Advertising model

• Subscription model

the values are reinforcing the customer’s experience

examples: customers subscribe on-line for the New York Times or for Music etc.

• Media model

• Servicing your audience

provide the product quality for costumers.

one of the models that create most profits for companies

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WHAT ARE THE DIFFERENT MODELS OF VALUATION OF CONTENT?

• Games model

• Virtual goods

non-physical objects and money purchased for use in online communities or games

• Virtual currency

anything that can be used (gold, lindens) to purchase items & upgrades within the economy for a given game

• Software

• Web services

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WHAT IS THE RELATIONSHIP BETWEEN FEE AND VALUE

In every day language :-The value is the usefulness or desirability of good or service, how much you love it or what it is “worth to me”.

-A fee is an amount paid in order to access a particular service or right.

In economic language :-The value is how much usefulness or pleasure an individual gets from a commodity or service.

-A fee can be charged to the customer in order for them to access an additional content of the product / service and improve its experience.

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WHAT IS THE RELATIONSHIP BETWEEN FEE AND VALUE

Relationship between fee and value

The product gains value Because of this high value, the customer is ready to pay for it = a fee

= the more the product is worth for the customer, the more he is ready to pay a fee for an improvement.

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AQUAMIUM

What is Aquamium ?

Aquamium is a pool which is free for everybody, but has some constraints. However, If users want to remove these constraints and have an access to slides, Jacuzzi or sauna it is necessary to pay.

When ? : from March to JulyWhere ? : In EuropeFor Who? : Everybody between 3 and 80 years old

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AQUAMIUM

 NB : Segways are available for moving in the aquatic centre. They are waterproof.