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More Freemium Data: Pandora & Dropbox

Submitted by Ryan Spoon on March 28, 2010 – 12:37 pmView Comments

More data out of the Freemium Summit and following the great insights from Evernote. Here are tidbits from Pandora and Dropbox about their freemium business models and results. More case studies and data are available on GigaOM.

Pandora
Freemium product: Pandora One
Premium features: higher quality streams, desktop app, no usage limits
Results: 300,000 subscribers – 1.6-1.7% of monthly uniques

Dropbox
Premium features: Bandwidth
Results: Dropbox has one of the best referral programs on the web (see my review here). The program increased signups by 60% and now drives 30% of all signups.
Organization: 30% of the engineering is devoted to user acquisition

Evernote (see full write up here)
Premium features: premium account, bandwidth
Results: 1.8% of users (6% of active users) have converted to premium users. And Evernote has driven 50K premium subs in 28 months.

Popularity: 1% [?]

  • These are great notes. I have some additional data on freemium and some takeaways:

    http://expostfacto.posterous.com/freemium-summit-notes-and-data

    An excerpt:
    Generally, user conversion rates to paid products vary from 1-4% across sectors. Across small and medium business software, social and mobile gaming and music, paid upsell conversion rates were fairly constant. Many companies found that cross device usage of a product was the best correlating factor to paid upsell.

    Free users are assets, if you can control the cost: Free users build network effects and user mindshare that are useful for later upselling and refer a friend incentive program .Evernote measures revenue per active member per month as a key performance metric (KPI). In month 1, a user will generate $0.02 per month. In month 24, an active user wil generate $0.75. Focusing on upsell and building value drives enormous revenue opportunities. As for referral marketing, Dropbox’s two sided incentives offer increases conversion rates by 60%!
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