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Freemium Revenue Model

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This template worksheet can be used to calculate freemium revenue models for products such as trial software, applications, or free storage. In a freemium revenue model, the most basic service level of a product is available to the user at no cost. However, more sophisticated, premium, services or products require users to pay tiered subscription fees based on usage. The freemium business model allows companies a means of achieving market penetration as well as building revenue.

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									FREEMIUM REVENUE MODEL
             About Freemium Revenue: In a freemium revenue model, the most basic service level of
             a product is available at not cost, while more sophisticated service levels require users to
             pay tiered subscription fees based on his or her level of usage. The freemium revenue
             model is popular among Web 2.0 service companies as a means of simultaneously getting
             market penetration, while also building revenues. Examples of successful freemium
             companies include Flickr, Dropbox, Skype, 37signals and PDF Online.


              Trial Membership
                                                                GUIDELINES
                                             This template can be used to calculate freemium revenue for
                                             popular freemium revenue models such as trial software,
                Trial Software               application and free storage. Click on the buttons on this page
                                             to explore each of the models included in this template.

              Online application


                Online Storage




© Copyright 2013 Docstoc Inc.                                                                                  1
                                     TRIAL MEMBERSHIP



            No. of free members added per day                                      400
            No. of trial days                                                       20
            Avg. no of membership months for every paid member (Tier1)               3
            % conversion                                                             6
            Monthly membership fee (Tier 1)                              $      30.00
            Avg. no of membership months for every paid member (Tier1)               1
            % conversion                                                             1
            Monthly membership fee (Tier 2)                              $      50.00


            Total freemium revenue                                       $   70,800.00




© Copyright 2013 Docstoc Inc.                                                            2
                                          TRIAL SOFTWARE



            No. of unique free trial downloads per day             4,000
            % conversion to full version software (basic)              2
            Price of full version software (basic)          $      40.00
            % conversion to enterprise edition                         0
            Price of enterprise edition                     $     150.00
            No. of direct purchase of full basic version             130
            No. of direct downloads of enterprise edition              5
            No. of purchases of multi-license (3)                      3
            Price of multi-license (3)                      $     400.00
            No. of purchases of multi-license (5)                      2
            Price of multi license (5)                      $     600.00
            No. of purchases of multi-license (10)                     1
            Price of multi license (10)                     $    1,200.00


            Total freemium revenue                          $   14,550.00




© Copyright 2013 Docstoc Inc.                                               3
                                       ONLINE APPLICATION

           No. of users for the demo/evaluation use of application           5000
           % users that will buy the full version                               1
           Price of the full version                                 $     20.00


           Total Freemium Revenue                                    $   1,000.00




© Copyright 2013 Docstoc Inc.                                                       4
                                     ONLINE STORAGE

            Free storage allowed (GB)                                        5
            No. of registered users per month                             3000
            % conversion to paid storage (Tier 1-monthly plan)               2
            Price of Tier 1-monthly plan                          $     30.00
            % conversion to paid storage (Tier 2-quaterly plan)            0.3
            Price of Tier 1-quarterly plan                        $     80.00
            % conversion to paid storage (Tier 3-yearly plan)              0.1
            Price of Tier 1-yearly plan                           $    250.00


            Total Freemium Revenue                                $   2,102.50




© Copyright 2013 Docstoc Inc.                                                    5
								
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