To free or not to free, that is the question

by Suw on January 19, 2012

I was fascinated by this post from Tyler Nichols about his experience providing a freemium Letter from Santa service before Christmas. In short, Tyler had found that few people upgraded from the free version to the paid, and that those who did use the free version were much more likely to send him support queries.

I was wondering as I read how much of this is transferable to ebooks. Is the freemium model a sensible one for writers? Does giving away your work get you a bigger audience of people willing to pay next time round? Or does it just mean that lots of people download your stuff, never read it, and have no interesting in paying for future works?

I’ve always been a big advocate of free and I don’t think I’m convinced that it’s worth giving up on yet, but I did find this comment from Wei on Tyler’s post really interesting:

Freemium works with some business models but in this case, I’m pretty sure it’s not the right play. Freemium works best when you get the customer addicted to the point that they would be willing to pay money to get more of it. It seems like your website gave out the entire product for free and you are asking money for the accessories. Imagine Dell giving you a free laptop then get mad when you choose not to buy the leather case or an extra battery. Unfortunately I think that is how you have setup the site this year.

And this reply from Nate:

I agree. I always thought freemium was best explained in the gaming sense. You can play the game for free (e.g. MafiWars) but if you want the better weapon, or faster upgrades, or one time kill shot, you fork over $5, $10, or $20.

Most people won’t come in and instantly buy 1000 experience points. But after they’ve played for a time, for example a month, and are tired at how slow they upgrade, they fork over $5 for 1000XP without batting an eye. After all, it’s wired up to paypal, and the process is instant.

Giving away a book for free is the Dell model. You are giving someone the entire thing and then hoping that they buy the audiobook or a Kindle version or whathaveyou. But what would be the equivalent of the MafiaWars weapon upgrade? Certainly it’s not the last chapter, because that would essentially be a bait and switch, which is likely to piss people off.

Indeed, what upgrades can a book even have? Are people really interested in author annotations? I would imagine most are not. Audiobooks don’t feel like an upgrade – they aren’t an enhancement as much as they are simply a different version. Once you’ve read the story, you’ve read the story, you know how it ends. The audiobook is probably only attractive to the subset of your readers who like to listen.

So what about merchandise? That relies on the idea that you’re actually selling identity, not a story, and whilst in general terms that’s sort of true, is it true enough to pin a business model to? Or would selling merchandise simply mean that you have more awareness to raise and are taking a bigger risk spending time, effort and possibly money getting your shop set up? Even if you go with only on-demand merch, like t-shirts, there’s still an initial outlay on design, etc., so it’s not completely free.

But games and books are different to, say, software. People really do become enthusiastic fans of games and books, gobbling up every release as soon as it is out, in a way that I suspect isn’t the case for (much) software. I may love a particular app or service, but that doesn’t mean that I’m going to upgrade to premium if I don’t need to or that I’m going to go and buy everything else that developer does. If I find an author I love, on the other hand, I will go and raid their back-catalogue without a second thought.

Of course the big problem is that as a newbie author, you don’t have fans, let alone the most valuable kind of hardcore fans that buy every version of everything. Your first and biggest challenge is reaching enough people to find the ones who are interested in becoming your fans. It is a huge hurdle, and although I’m still not sure what the most efficient way of surmounting it is, I do think I’ll be more likely to achieve that with the freemium model than without.

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