November 30, 2016

[Video] Subscription or freemium: Which is the better model for an online business? – Bobby’s Minute, ep. 68

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It’s better to find a hybrid between the 2. Why would I want to stop people from giving me more money?

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Subscription or freemium: which is the better business model for an online business? I have to say that i’m biased, because I come from gaming and gaming, especially mobile gaming, is usually not necessarily embracing the subscription model.

But the reasoning behind it makes sense for any type of online project, so what I would try to do is to find a hybrid between the two. The reasoning behind it is this one: subscriptions can show you steady growth, they can show you exactly how you’re going to evolve in the next 6 months,12 months or 18 months. I think that having subscriptions only is a bad business model because you’re limiting the users that want to give you more money to just the small amount of money that the subscription represents per month.

So what I would try to do is I would create a subscription that gives the basic level of the product and I would try to create a consumable that would allow users that want to spend more or need more from your product, to  allow them to do just that. So, a model that I think is quite similar to what I’m trying to explain, I think, is hosting. Most of the users have a really basic package and they just use that specific package, but the power users, those that really use your product, they want more bandwidth, they want more space and usually they pay for that as they consume it and they do that month after month after month and they are happy to do that, because they know the value of that specific consumable.

So, if I would have to choose between subscription and freemium, I think I would try to find a hybrid of both, but i’d probably go freemium if I had the opportunity. Bear in mind: this is if I would have to CHOOSE one of those to either subscription or freemium and the reasons for choosing freemium are the exact reasons I told you before that. If you have users that want to spend more money with you and those are the users that, most of the time, make the bulk of all of your revenues, let them, GIVE them opportunities.

Give them options, so that they can spend more money with you. A subscription model stops them from doing that and I don’t want to find clients and basically force them not to give me money.

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