Freemium Is A Neat Concept, But Does It Pay?

One of the things I find frustrating about the search for freemium offers that a small percentage of readers might buy is the fact that it fails to address the monetary value of a site’s core offering.

The main idea regarding Free as a business model, forwarded by Wired editor Chris Anderson and others, is that a site’s core offering brings in the audience, and once the audience is established a small portion of it can then be converted to paid. Sounds logical, as long we keep the discussion focused on sites that are massively popular. A site with a small-to-medium sized audience isn’t going to benefit from this strategy. And the reality is very few sites are going to achieve the kind of scale that allows freemium to work. Does this mean paid content is for sites of scale only? That the small-to-medium sized sites have no business even thinking about being paid for their contributions?

Call me crazy, but I think we are fast reaching a point where turning to a close circle of trusted sources is going to win out over the act of combing through volumes of messy search results. There’s simply too much information available and the web is too vast to manage. The first wave of thinkers about our information glut concluded that information today is therefore a commodity, and with digital production models being what they are, basically value-less. But is that the right call? It seems to me the more noise there is–and there’s more noise every day–the more value we assign to the things, people and places that provide shelter from the noise storm.

Perhaps, readers do not want to be just another set of eyeballs, with no real connection to the media brand in question. Gary Vaynerchuk keeps saying it’s all about scaling one-to-one. If he’s right and I believe he is, readers may be perfectly willing to pay for custom content solutions that meet their specific needs. And content producers may find it more fulfilling and profitable to serve 300 paid subscribers versus 3000, or 30,000 unpaid.



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.