NOTHING IS FREE Data-driven optimisation unlocks freemium business models’ real potential

In today’s digital era when the marginal cost of (re)production and distribution of products and services tend to be close to zero, freemium strategy is becoming more appealing among companies as going freemium can be an effective strategy for customer acquisition and the monetisation of their digital products. Stefan Wagner and Julian Runge present an effective approach to designing freemium business models that would maximise the business impact of a product or service.

Digitisation has a tremendous impact on the conduct and the economics of business as it has the power to transform virtually every step in the value chain of almost every industry. Most visibly to the public, digitisation has transformed consumer software in video and content-related industries including publishing of text, music, and videos. In particular, long-established pricing schemes are being overturned by distributing content in a digital fashion via the internet and through mobile applications (apps). Digital content and products more generally are characterised by high cost to produce the first copy or version. The marginal cost of (re)production and distribution then tend to be