A good prensentation of the Freemium economy form my students in Bachelor at PSB Paris school of Business. Thanks to : Thomas Beauchemin Justine Bohelay Camille Bruzeau Iona Casta Magny Dan Assous Margaux Bervas

1. Group 1
Thomas Beauchemin
Justine Bohelay
Camille Bruzeau
Iona Casta Magny
Dan Assous
Margaux Bervas

2. KEY CONCEPTS
= €
-ESTABLISHMENT OF
A FREE SERVICE
HIGH NUMBER
OF USERS
PROPOSE PREMIUM
FUNCTIONALITIES
CONVERT A
PART OF FREE
USERS INTO
PREMIUM
USERS
FUND THE FREE
SERVICE BY THE
PREMIUM SERVICE

3. KEY CONCEPTS
To create a Freemium Business Model:
-The target market has to be important
-The Premium service has to provide a real added value compared to the
Free service
-The cost of the Free service must be low
-Need to find a good strategy to convert free users into premium users

4. STARTED?
With the commercialization of internet people got used to getting access to more things
without paying
Ancestor of « Freemium » : Shareware (1980)
Emerged as a model where product/service is available for free trial but with restrictions
(functionability, availability, convenience..)
Freemium concept appeared later in the mid 2000
First recorded use of the term : Venture capitalist Fred Wilson in 2006
The Freemium model than shifted to other sectors :
• video games (free-to-play games such as League of Legends or World of Warcraft)
• phone applications that generates tons of money (Candy Crush, Evernote…)

5. HOW DO WE TRANSFER FREE
IN MONEY?
-Several ways to transform free into
money
-Most common way: advertising
-Other systems: motivation to buy
Premium version after free “Lite” Version

6. HOW DO WE TRANSFER FREE
IN MONEY?
-In-App purchases
o Improvements
o New data
-Free services created to sell after
gain of recognition

7. WHAT ARE THE DIFFERENT MODELS OF
VALUATION OF CONTENT?
• Advertising model
• Subscription model
 the values are reinforcing the customer’s experience
examples: customers subscribe on-line for the New York Times or for
Music etc.
• Media model
• Servicing your audience
provide the product quality for costumers.
 one of the models that create most profits for companies

8. WHAT ARE THE DIFFERENT MODELS
OF VALUATION OF CONTENT?
• Games model
• Virtual goods
 non-physical objects and money purchased for use in online communities
or games
• Virtual currency
 anything that can be used (gold, lindens) to purchase items & upgrades
within the economy for a given game
• Software
• Web services

9. WHAT IS THE RELATIONSHIP
BETWEEN FEE AND VALUE
In every day language :
-The value is the usefulness or desirability of good or service, how much you love it or
what it is “worth to me”.
-A fee is an amount paid in order to access a particular service or right.
In economic language :
-The value is how much usefulness or pleasure an individual gets from a commodity or
service.
-A fee can be charged to the customer in order for them to access an additional content
of the product / service and improve its experience.

10. WHAT IS THE RELATIONSHIP
BETWEEN FEE AND VALUE
Relationship between fee and value
 The product gains value
 Because of this high value, the customer is ready to pay for it = a fee
= the more the product is worth for the customer, the more he is ready to pay a fee for
an improvement.

11. AQUAMIUM
What is Aquamium ?
Aquamium is a pool which is free for everybody, but has some constraints.
However, If users want to remove these constraints and have an access to
slides, Jacuzzi or sauna it is necessary to pay.
When ? : from March to July
Where ? : In Europe
For Who? : Everybody between 3 and 80 years old

12. AQUAMIUM
NB : Segways are available for moving in the
aquatic centre. They are waterproof.