

Is Freemium the Emperor’s New Clothes? - lkrubner
http://blog.kachingle.com/2012/08/is-freemium-the-emperors-new-clothes/

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joelrunyon
I'm glad you note Evernote as an exception. That's a great example of an app
that's:

1) Ridiculously Useful

2) No Comparable Competition

3) Has A Tie-In Factor That Makes Any Power User EVENTUALLY Pay (and be more
than happy to).

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janlukacs
We use the freemium model with our time tracking/pm/billing app Paymo
succesfully. I don't think the model is finished, it really has great
potential BUT it's not a magical formula that works everywhere.

The way we do it with Paymo is that we offer basic functionality for free to
people who can't afford the software at that point in time. (eg: someone who
just starting freelancing). In time some of these users convert to paying
customers.

The major problem developers face at the moment is the huge availability of
"free" - some users just assume that they are entitled to free software no
matter what. You really need to provide real value and have your users
perceive this value in order to make money.

At the moment we have a bubble forming with huge amounts of cash poured into
businesses that will never ever earn any real cash and i think it will pop
pretty soon. This creates a lot of problems both short and long term which
we'll have to deal with.

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EwanToo
"You really need to provide real value and have your users perceive this value
in order to make money."

This will always be true, no matter the business model involved.

~~~
ktizo
I'd say that there are quite a few business models where you don't need to
provide real value, or even have the people you are getting money off to
perceive any real value and still make money. And some of these business
models are even legal.

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benologist
You attribute the WSJ writup to Sarah Silverman heh.

~~~
typaldos
Oops. Good catch. Sarah Needleman. Fixed in the post. -- Cynthia

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wavesounds
The console and pc video game industry makes plenty of money just by charging
for their software. I think App developers need to stop this race to the
bottom thats killing everyone. I guess its fueled by this idea that on the
internet the number of users is paramount to everything. Which I think is a
silicon valley culture thing that seems like its going to cause or has caused
a bubble.

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jmitcheson
I'm not necessarily disagreeing with you, but you mention the gaming industry;
I thought I'd point out the biggest new development there is giving away the
games for free and charging for items, aka. F2P (Valve/TF2 is one example.
They increased their revenue 12x[1]).

Is this just not another form of freemium?

[1]<https://www.google.com.au/search?q=tf2+f2p+revenue>

~~~
bluedanieru
Valve is not a good example for anything. They do things other companies
can't, or won't, and at any rate, don't. They are the exception that proves
the rule, in most things. In the TF2 case, they went to that model as an
experiment, after TF2 had already been paid software for a long time and had
made a lot of money for Valve. So, you don't see much of the annoying
'monetization' bullshit that you see with other titles, because there wasn't
any pressure to put it in. Instead, they sold things that people wanted
_without impacting core gameplay_ which is something that no other freemium
developer seems able to pull off.

I haven't encountered other examples of freemium games of that type, that
weren't utter garbage.

~~~
gizzlon
Check out the new Tribes: <http://en.wikipedia.org/wiki/Tribes:_Ascend>

~~~
thedrbrian
Hi Rez are selling power. The expensive paid guns are a definite upgrade
rather than a side grade on TF2. And their player base is dying compared to
TF2
[http://steamgraph.net/index.php?action=graph&appid=17080...](http://steamgraph.net/index.php?action=graph&appid=17080q440&from=0)

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legulere
There also exist exceptions where there are competitors: Sharehosters

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ktizo
Somehow people seem to have forgot along the way that value != money. I am a
huge fan of people doing things just because they are useful without worrying
about how they are going to try and monetise them, but just because something
is useful and used by masses of people doesn't mean that the network of people
that use it is easily monetisable, especially after the fact.

It seems that people just looked at the number of users and assumed that
because a company can get millions of users, that the people working there
must be bright enough to work out how to get loads of money out of them
eventually, while forgetting that you don't need to be that smart to get
millions of users when you are providing a useful service for free.

