Paid Versus Free Monetisation In The Post-Sales World

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            freemium ARPU for paid content            disparity in quarterly spend
• Growth in            digital ad markets leads to            decline in ARPU 
           of music spenders fall into the top spending cohort, compared to            for both video and apps
• Facebook’s                       ARPU            in at            for Asia, compared                       for the US and Canada
• Music consumers            have a higher share of            spenders (across all formats) than           
• Netflix’s churn            of            monthly is significantly higher            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