Freemium is a term I see thrown around a lot this day. It's sunk into the vocabulary of media producers, programmers, and marketers quickly – so quickly I don't think we've really analyzed the repercussions of it. As I've seen the term used more and more, as I've played Freemium games, I think we've gotten so used to it we don't think about it.
This of course gets me thinking. Not that it's not hard to do that . . .
Freemium itself is simply defined – it's something where a free version or limited version of a product is given away, and additional features and content are available for pay. It's a simple, sensible business model made easier in an age of DLC and easily distributed content. It's probably its' very sensibility that makes analyzing it rather difficult – Freemium is "obvious" and seems pretty effective, so we don't analyze it.
But beyond the obvious and effective marketing tool, a few things I've noticed about Freemium:
- Freemium is a great sales tool because it makes the initial download, product, or what have you a near no-brainer for download. It gets product awareness out there.
- Freemium builds trust. Giving something away is a classic human way to build trust. The move to Freemium for a company, or just the use of Freemium, helps build goodwill.
- Freemium allows for a sense of consumer control. You get what you want (often when you want it), and get only as much as you want of the new features, content, etc. in most cases. Giving people a Freemium product gives the consumer a sense of control.
- Freemium also allows for people to say "enough" – enough features, enough content, enough game levels, what have you. It gives a sense of control to the consumer – I think this may be a goodwill builder in the area of MMOs.
- Freemium is a fantastic way to measure performance and popularity of individual elements of a product. What game levels sell more than others? What content sells more than others? What features do people want? The ability to analyze consumer choice – and then tweak prices and offerings – offers considerable control and ability to serve customers.
Freemium as a pricing model is something I think developers and creators have yet to fully understand, optimize, and employ. It's new enough -and logical enough – that it's easy not to think about it very much.
But if we do, we can leverage it for our own efforts more effectively . . .
– Steven Savage