Although it was first dreamt up in the mid-2000s, freemium only really took off with the possibility of making “in-app” purchases on smartphones and tablets. The concept is simple: offer potential customers a free version of the app and then steer them towards paid-for (premium) features. The free model can often be supported by advertising. While video games are the biggest purveyor of freemium content, this relatively new model is also found in other sectors. For example, a cooking app publisher may offer a number of free recipes, before charging for others. Recently, SwiftKey – one of the most popular alternative keyboards on Android – switched to a freemium model by making its app free, although it monetizes additional themes. The music streaming service Deezer is another very good example of a coherent freemium service. It offers a free version funded by advertising, with millions of accessible songs, and another paid-for version, offering advanced features and no advertising.
A bastion against privacy
Freemium also looks to be an excellent response to piracy in some business sectors. An obvious example is music, as we have seen above, but also and more importantly video games. The most popular titles on Android have piracy rates of up to 80%. With freemium, designers have found two ways of fighting back. In the first, it offers a “demo” taster of the game. If users want more, they then pay to unblock it. The other model involves providing the whole game free of charge, but offering paid-for upgrades – such as better weapons, faster or more powerful characters, etc. Players are therefore less tempted to pirate the game, since they have free access to all or part of the content. Some of the target users will then pay to extend their use of the app, to the benefit of the game’s publishers.
This has led to abuses, however, since some developers have seen it as an excellent means of monetizing their creations to the extreme. The most striking example remains the famous game Candy Crush Saga. Most players noticed that they regularly reached a kind of glass ceiling, when it became impossible to advance without stumping up cash. In some cases, when done badly, use of the freemium model therefore distorts the very structure of video-game production and may lead to frustration in an increasing number of players. This model is likely to become the norm however. As long as it remains possible to install a pirated app on Android (which accounts for more than 80% of mobile phones shipped worldwide), publishers will have no other choice if they want to monetize their work. Particularly since freemium, used wisely, continues to benefit both users and publishers.