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BizReport : Internet : May 16, 2012

Freemium model works well for online movie, video industry

Over 4 out of 10 consumers have subscribed to a new product or service as a result of being offered a freebie, according to new research from iYogi Insights.

by Helen Leggatt

The findings were based on the responses of more than 2,000 iYogi customers and the data shows that a "freemium" offer is vital to the success and market penetration for new products and services.

The movie and video industry showed the most success using freemium techniques, with a 57% conversion rate from free to paid subscriptions. This is particularly true of first time users among which conversion rates from freemium promotions were highest:

- 68% of first time users subscribed to a video-streaming or movie service after a free trial period;

- Over half (54%) subscribed to productivity tools after a free trial;

- 51% opted to sign up for Cloud services after a free trial.

The research shows that people often aren't aware of the vale of new products and services until they actually try them.

"This new research reveals that a free introductory offer goes a long way in unlocking the value of a new product or service and leads to higher acceptance among potential buyers. In fact, pioneering services need to use a freemium if they want to achieve their business goals," said Vishal Dhar, co-founder and president of marketing at iYogi.

Tags: customer acquisition, free trial, Freemium, online conversion, online movies, video-streaming

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