An Argument Against "Freemium" Content
Mac Slocum
May 13, 2008
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The "pay to remove ads" model -- also known as "freemium" -- is inherently flawed, argues Andrew Parker:
Why? Because the people in your audience with disposable income who are willing to pay for web services are the same ones that will self-select out of your audience for your ads. So, all that remains in your audience are people that are too cheap to opt out. That doesn't sound like the audience that Disney (DIS), Coca Cola (CKE), or even your average direct response advertiser wants to reach.
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May 15, 2008 1:28 PM
Good logic, but not sure I agree on the Coca Cola. If anything, lower income people probably drink more Coke.
Also, fremium is not always about avoiding ads. LogMeIn is an example of a company that just adds more value in it's premium products. The free product is valuable to users and does not include advertising (last I checked).