Ning provides Data Point for “Freemium” Pricing Model
3% of Nings customers actually pay for premium services…
This is a good data point for all start-ups (including mine) that are contemplating the “Freemium” pricing model. This pricing model is certainly the most popular on the web and allows a company to get a large customer base of free users to monetize with ads along with some subscription revenue from the power users. I have heard some entrepreneurs state they plan to get 10-20% of their user base to pay for the premium features…but that is probably not going to happen. Obviously this percentage depends on a lot of factors such as pricing, features, market and others, but I think the 3% figure that Ning is reporting seems to be the ballpark for the premium component of the Freemium pricing model.
500,000 networks is a big number…what is even more impressive is the fact that 65% of them are active.
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