what is the freemium business model and what are the problems it?
Firms give users the product/service to use for free in the hope that they will purchase the paid version. Has become the standard model for apps, 77% of apps on app store use freemium model.
+ helps to build customer base
+ platform for testing features
+ marketing function
- hard to determine what features should be free and which paid (too many and no-one will pay, too few and no-one will be attracted to free version)
- takes time to find the right balance
- sets standard, expectations of everything being free -> very hard to monetize.
- The Economist - The world in 2013 predicted that the freemium business model will falter as only a tiny fraction of users convert into paying customers. Only huge levels of downloads can make the model work financially meaning that well established brands are favoured.
Phil Libin on freemium
- Phil Libin of Evernote said ‘freemium needs time to work’
- Only 1% of evernote users paid for the service within a month of launching it. Compared with 12% paying after 2 years
- Businesses need to be able to cover their costs over this period to be viable in the long-run.
location-based services
+ good for matching unmet supply with unmet demand
e. g. Opentable allows customers to finad and book tables in restaurants and helps restaurants to fill seats.
e. g. Groupon allows group purchasing of discounted goods.
e. g. Hailo uses location-based services to match taxi drivers with people wanting a lift.
Revenue model for these types of businesses is generally to take a cut of the revenue generated through the service.
- Another model is the ‘collaborative consumption’ which attempts to monetise unused assets
e. g. BlablaCar - carpooling service and AirBnb which allows people to rent out spare rooms to travellers. - Other model is the location-based social network e.g. FourSquare
what is a cookie?
A cookie is a small text-based file that is automatically saved on your computer in the background while you’re browsing. These files have the ability to track the sites that you surf, how much time you spend there, how much money you spend and how often you visit.
Using the collected data, companies can then make guesses about how much more willing you might be to pay for the same item or service, and adjust prices accordingly in real time.
censorship example
Until March 2010, Google adhered to the Internet censorship policies of China, enforced by filters colloquially known as “The Great Firewall of China”.
Google.cn search results were filtered to remove some results concerning the Tiananmen Square protests of 1989, sites supporting the independence movements of Tibet and Taiwan, the Falun Gong movement, and other information perceived to be harmful to the People’s Republic of China (PRC).
Google claimed that some censorship is necessary in order to keep the Chinese government from blocking Google entirely, as occurred in 2002.
syria internet incident
In November 2012 and recently in May, the Syrian internet was disabled - allegedly in an attempt to silence the protests that have been building up and gathering steam online amongst the conflict in the country.
