Free or charge? It's a problem.

When the internet age falls in our lives, users enjoy a wide range of services through the network, but, with the increase in the number of users, the demand for various differentiated services is growing, and more and more software and services began to charge, this article will be detailed analysis of the current application and service charging mode. However, one thing is also of course, because the development of the Internet is usually a fast-changing, you never know what the Internet will happen in the next second, so this article is just for everyone to provide reference.

There are usually three types of traditional application charging models:

Built-in ads

In the application of the built-in advertising model is currently a more common mode, by inserting a variety of code in the application, and then through advertising to charge, but the application itself is free. The advantage is that in the application itself, the quality can be guaranteed in a short period of time to accumulate a large number of users, after all, free things everyone will be happy to try, however, such applications are always at the expense of the user's experience.

Direct charge (free trial + purchase use)

Since the App Store has built a complete and mature purchase payment system for the use of applications, more and more applications have been put on the app store at the time of the application of the download, a permanent use of the purchase mode.

The direct charge model may be difficult for most developers, because the user will not be in the unknown so the purchase of money, so many applications provide a trial version, give the user a trial period before deciding whether to buy. However, to do the charging application, the first must be commonly used applications, such as tools, and second, the product should be good enough; third, there is a certain degree of user viscosity. This kind of fee application will have users willing to pay.

In-app purchase (IAP)

In APP Purchase provides flexibility for various business models. Developers can benefit by providing additional services and content to their customers within the program. The profits currently earned by IAP account for a significant proportion of application revenue, and have become a revenue channel for mobile app developers, embraced by a large number of iPhone and Android apps, and seen as an alternative profitability solution that uses built-in advertising. (For more details, see: "Amazon App Store with IAP vs Google Apple") but "buy in App" is not for all applications, more for content consumption and game classes.

We are willing to pay for what mode

As a regular user, we are willing to pay for what services:

skype--Internet communication software, free basic Internet Call services, and Internet calls outside the network is required to pay.

flickr--Image storage Services, free users a number of monthly pictures of the service is free, further large and long service is paid.

dropbox--file storage services, free users can get 3GB of networked storage space, and larger space services are charged.

evernote--notebook Tools software, free users 60M per month traffic, paid users can receive more traffic.

Thunder vip--download software, VIP users to provide offline download, seed on demand and other value-added services.

QQ members-Instant messaging software, convenient and efficient communication services, ordinary users to provide basic chat services, paying users to provide cloud storage chat records and other value-added services.

Referring to the above services, I have to say that the Internet is now more popular business model: Freemium

Mature freemium

freemium mode refers to the use of free services to attract users, and then through value-added services, some of the free users into the toll users, to achieve revenue.

Freemium characteristics

1: Free is the trend of the Internet

Free is the inevitable trend of the Internet, and in the past, users do not have to spend a lot of money to find their own information and services. The initial charge will block a large number of users outside the threshold, and for "Freemium" this mode, will undoubtedly in the beginning and all the free services, like a large number of user base. This is crucial for an internet company.

2: Reduce the cost of education to the user

Freemium does not require you to spend a large amount of advertising money to introduce users to the various features of your service, but through the user's free use, so that users can provide you with the service of self-learning and familiarity. Compared to most of the previous websites through advertising mode to educate users, "Freemium" mode makes it easier for users to understand and learn your products.

3: Cheap marginal cost

By Freemium this model to operate the product, you need to consider the marginal cost of the product. With each additional user, you need to increase the cost of serving this user. At present, the main cost of products based on this model on the Internet is bandwidth and storage, and the marginal cost of both is already very low today.

Freemium contrast the advantages of different free strategies

Freemium is not the only Internet free way, the current Internet mainstream free way has the following three kinds:

1: Advertising mode-advertising mode is the most common way for all users free of charge on the site ads ads advertisers money.

2: Cross-aid mode--cross-assisted mode, free for a product, but when the user buys another product, the charge is attached to the product.

3:freemium mode-Basic service free, custom premium service charge.

(Illustrated Freemium)

By contrast, Freemium's mode of operation has a clearer profit point than the advertising model. It is simpler to execute than cross assist mode and is easy to achieve profitability.

The mature model that can be used for reference

Google Apps is a good attempt: as an individual, you can use Gmail and Calendar for free, but to become an enterprise user, you need to pay. And another domestic giant Tencent QQ personal version and Enterprise version also provides more customizable value-added services: specific to the following table.

The prospect of charging for applications or services

According to the latest statistics from the media, revenue for individual developer (team) product income 72.9% is obtained through advertising, while institutional (enterprise) developers profit mainly from games and advertising, each accounting for 60.2% and 27.7%. Whether it's a personal developer or an organization developer, whether it's IOS or Android platform, the proportion of income paid for downloads is low and there is a gradual decline, particularly in the Android platform. Meanwhile, in the 1 million mobile phone application development Army, the realization of the profit of only 13.7%, mainly dependent on the enterprise itself (such as Tencent's developers) or personal research and development applications of the product following the main profit, the loss accounted for 64.5, flat 21.8%. The developer's profitability is very unsatisfactory, Even if the application outlook is optimistic, how to survive is the first problem.

The DCCI data is a more straightforward illustration of the problem:

360 rely on the client to achieve the browser and Web site navigation, Tencent relies on value-added services to create the Empire, free download software Thunderbolt has achieved the Thunder to see and now the Thunder VIP. Regardless of whether the above business model is applicable to all Internet products or services, but provides some reference model for the entrepreneurs to refer to and encourage.