Freemium volatility

If a product were judged purely on the basis of what paying customers pay for, or don’t, then just as free sell-side financial research is a commissioned trade solicitation, published media content is an ad. If the publication is subscription based, then the ad is for itself. Otherwise, for some third party. In either case, the transaction is what matters. It pays for the content production, which is to say, the ad placement, ideally at a profit.

The difference between assorted models is mainly a matter of disclosure. Many take sell-side research with a grain of salt because they know the underlying model. In media, the cynicism translates thus: If you’re not paying for it, you are the product. In other words, you are what is sold to those who pay. Either way, there is disclosure, though sometimes it’s implied. It’s always about the customer who pays, in big print or the fine print.

In the economics of digital supply and demand, where the supply of product is the content that is published and its demand is either free (i.e., promotional) or paid (i.e., subscription-based) attention, the demand-side (i.e., buy-side) is these days under the microscope for clues. Whether it’s the advertiser cutting back on spend, or the subscriber re-channeling income disposition, the dynamic has begun to signal a rebalancing.

Source: The Information [from free email Tech Briefing, incidentally, in support of subscription product]
Same source

In this universal freemium model, which is in essence what we’re talking about one way or the other, in which perceived value is the driver of both supply and demand, the currently prolonged period of general positioning and repositioning, investment and divestment, customer growth and churn, preference and subordination, focus and inattention, will likely shape new patterns of behavior (for both suppliers and demanders) as the meaning and relative scale of value are rejudged.

If the digital economy should see a lift, as is generally now contemplated, this will coincide with the aforementioned scrambling of patterns. We’re at the early stages of all this. The expectation is for greater possibilities.