The Noisy Channel

 

Freemium is the new black

December 9th, 2008 · 4 Comments · Uncategorized

An article by Claire Cain Miller in today’s New York Time proclaims: “A Web Start-Up Counting on Ad Sales? Good Luck“. The article isn’t kind to the ad-supported model in general, but the particular concern is for startups. The article quotes David Weiden from Kholsa Ventures:

“The ad model is somewhat worse but not radically worse,” he said. “What’s worse is getting funded that way.” If a company approaches investors with a plan to lose money for three or four years while building an audience, it will encounter many closed doors, he said. “It’s gone from plausible to almost implausible.”

The preferred alternative is the “freemium” model: offer basic services for free, and upsell advanced or special features. I marvel how it’s controversial to talk about charging for services. But that’s what happens in a world where people have come to expect information to be free–an expectation that the current economic conditions will surely reinforce.

4 responses so far ↓

  • 1 dumbwhore // Dec 9, 2008 at 9:25 pm

    FYI, your tweets have 404′s in them from zz.dd. I’m having the same issue. Am trying to track down what’s going on.

  • 2 Daniel Tunkelang // Dec 9, 2008 at 10:19 pm

    Thanks; just retweeted a working link.

  • 3 dumbwhore // Dec 10, 2008 at 12:01 am

    hmmm, I’m still getting failures. Did you retweet it from your wordpress or did you manually fix the tweet?

  • 4 dumbwhore // Dec 10, 2008 at 9:14 am

    for the moment I’ve abandoned twitter updater and moved to twitterfeed. best of luck.

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