There are several business models used to sell goods and services on the internet. Users prefer things that are free or at least free at the beginning.
But is free really free?
First paid app on Google play is on
place of top played games.
Freemium now accounts for
of Apple AppStore revenues in the US.
of freemium users become customers.
Business models on the internet
There are a lot of ways to do business on the internet. These are some of the most popular from the users perspective:
- Pay once – when buying things, this is the model that we all use. We pay for the things in advance and wait for them to be delivered.
- Use services for free – some services are really free to use. Basically, this means that there is a community behind it that raises money for running their business through different channels. In some cases, free services raise money with advertisements.
- Subscription model – users are charged periodically. Subscriptions can be of many types. Each subscription type gives the user access to different services, features, or resources.
- Utility model – in this case, users pay by usage. The payments can be based on time or amount of resources used.
But the most popular business model is a combination of some of the above – Freemium.
Freemium comes from Free and Premium. It means that users can use a service or app for free. At least at the beginning or with a limited set of features. If they want to use more features they are required to pay – in most cases a move to a subscription model is required.