The Freemium Purchase Decision

If you are reading this, you probably use one or more freemium web services. One example of a freemium service is Flickr. It’s been my web photo service for years, and for the last few years, I’ve paid for a Pro account.

This blog is hosted at another freemium service: I pay for some premium services, including domain mapping (which is the reason you’re seeing this site as rather than as

How much are you willing to pay for the premium version of a freemium service? Two prices seem particularly salient. One price reflects the value of the premium version, including the features in the free version and the features added by the premium option. A second price reflects the value of the premium features, ignoring the value of the free features.

There are other answers to the question, besides the two prices described. In particular, some people will refuse to pay anything at all.

That said, I think that a lot of people will answer the question with one or other of the two prices. So, at the risk of over-explaining, I’ll be more explicit about the two prices. The first price is value (free features + premium features). The second is value (premium features only). For example, in deciding whether $25 is a reasonable price for a year of Flickr Pro, are you thinking about what a Pro user gets, or only about what a Pro user gets and a user of the free Flickr service doesn’t?

Maybe I should use a polling service to gather response to my question. A freemium polling service, perhaps? It just so happens that I recently signed up for such a service: GoPollGo, “a social polling application” that I found via TechCrunch.

You can respond to the question about freemium pricing over at GoPollGo. Or you can leave your response to the question, or any other comment you want to make on the freemium pricing issue, right here.

37signals, One Suite








Freemium, Ad-Supported Books?







Reddit Has Freemium Thrust Upon It

Reddit is among the handful of sites I visit most days. It’s always been free. It’s supported by ads. It’s owned by Conde Nast, but that doesn’t mean it’s supported by Conde Nast. As mike [raldi] explained at the end of last week:

We’ve been kinda bummed at reddit these days. It seems like every week something comes up that slows performance to a crawl or even leads to a total site outage. And we almost never get a chance to release new features anymore…

The bottom line is, we need more resources.

Whenever this topic comes up on the site, someone always posts a comment about how reddit is owned by Conde Nast… and how if they wanted to they could hire a thousand engineers and purchase a million dollars worth of heavy iron. But here’s the thing: corporations aren’t run like charities. They keep separate budgets for each business line, and usually allocate resources proportionate to revenue. And reddit’s revenue isn’t great.

The good news is, our traffic continues to grow by leaps and bounds… to about 280 million pageviews per month.

Reddit addressed the resources problem by going freemium, but in a rather unusual way. The usual freemium proposition is: it’s a free service, but you can pay $X to get the following features. The Reddit proposition was a lot less specific:

in exchange for subscribing to reddit, we can right now only offer you our undying gratitude and an optional trophy on your userpage. It’s kind of a lame offer, we know, but if the program is a success, we’ll be able to give subscribers better incentives in the coming months. We invite you to post ideas in the comments section; in the meantime, I suppose it’s more or less a pledge drive.

The Reddit people called this Reddit Gold. Mashable Stan called it going freemium out of necessity. He also called it “a huge success” and an example of how “a very dedicated community can sometimes shape not only your service… but also your business plan.”

Reddit’s Chris [KeyserSosa] also hails the success of Gold, and promises that “there are some cool things coming that would be impossible for us to do for eight million active users, but totally feasible to bring to the 6000 or so who have taken a leap of faith with us so far.”

That figure of 6000 Gold members: it’s 6000 more users paying for Reddit than there were a week ago, but it’s a lot less than the 2% rule of freemium would suggest. That said, we’re a only few days into a rather sudden and unorthodox leap into freemium.

I hope that many more will sign on to Reddit Gold. Some intermittent users of Reddit have probably only just become aware of the Gold program. It’s currently the number five story on Reddit itself, by the way. Others may be waiting to see what the premium features will be. Some of us are prone to procrastinate, and/or are delaying discretionary outlays until we get our tax refund (and yes we did file on time, back in April).

Ning Takes the Free Out of Freemium













Freemium Summit

The Freemium Summit sounds to have been one of the more interesting “about social media but held in meatspace” events. It was a single day (Friday, March 26) focused on “models that combine a free offering with a premium, paid offering.” This is way late by web standards, but nothing has happened in the last couple of weeks to make the summit’s content obsolete. Here’s some coverage worth checking out, with a sample quote from each post:

Tumbling Toward Freemium












Freemium and Fencing






  1. You need custom CSS to change the background color.
  3. That loophole is going away soon.






Conversion Rates and Funnels







No Such Thing as a Free Sprout






