Wednesday, August 12, 2009

Chris Anderson on Freemium: The First Business Model of the 21st Century

A short but content rich presentation about the Freemium Business Model by Chris Anderson, that starts off by quoting five principles from Alan Murray, Deputy Managing Editor of The Wall Street Journal and Executive Editor for the Journal Online:
  1. The best model is a mix of paid and free content
  2. You can't charge for exclusives that will just be repeated elsewhere
  3. Don't charge for the most popular content on your site
  4. Content behind a pay wall should appeal to niches
  5. The narrower the niche, the better
“If you don’t make your exclusives free, other people will report on your exclusives, and they will get all the traffic… To reference my last book, The Long Tail, you get the head of the curve, the most popular stuff, that's best to monetize with advertising, and you got the tail of the curve, the niche stuff, a more narrow interest, that is best to monetize with direct payments… Give away the head, sell the tail”

This is very much in line with the results of the report On the outlook for newspapers in the digital age: Moving into multiple business models, by PricewaterhouseCoopers, summarized here.

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