Reports Media & Marketing

Paid Versus Free Monetisation In The Post-Sales World

Report by Zach Fuller
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20,000 Foot View: As the app economy matures into an amorphous content landscape, a picture emerges of how free and pure subscription models impact the bottom-line of the creative industries across music, online video, publishing and gaming. In one corner, freemium has been accused of devaluing content as a product, yet it is also credited with driving higher revenues from super-fans who previously had their spending capped by blanket pricing, at least in sectors like games (music still caps spending). The super fan remains the freemium evangelist’s most frequently articulated critique against subscription models, yet subscription’s advantage is that its consistent revenue streams facilitate a more predictable income. Which model can be considered better is defined by context, and this report addresses individual content markets and their experiences of adopting freemium and pure subscription.

Key Findings: 

  • Advertising seasonality impacts freemium ARPU for paid content through disparity in quarterly spend
  • Growth in emerging digital ad markets leads to a decline in ARPU 
  •        of music spenders fall into the top spending cohort, compared to        for both video and apps
  • Facebook’s               ARPU came in at        for Asia, compared to        for the US and Canada
  • Music consumers overall have a higher share of high spenders (across all formats) than apps
  • Netflix’s churn rate of        monthly is significantly higher than that of music streaming services 
  •        of video subscribers churn out once they have watched all the episodes of their favourites shows

Companies and brands mentioned in this report: Apple, Blendle, Facebook, Google, Medium, Netflix, Pandora, Spotify, Supercell, Yours

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