Usage-based business models
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Usage-based billing models
I bought some credits for my long distance calling service Mobivox last week. I use this service at least once a week and yet this was the 1st time I had bought credits since April 2008 (when I was working there). I have to be one of the better users on this service, yet it has only extracted $ 20 from me in a year and a 1/2.
Or why usage billing makes more sense In the freemium model, a free version of a product is used as a marketing tool to entice people to sign-up for an extended paid version. The term was first coined on Fred Wilson’s blog back in 2006.
Freemium - Shmeemium - Or why usage billing makes more sense
We had a great discussion going here over the weekend on Friday’s post about usage-based billing. David from LM Framework bravely defended his position that usage-based billing is better than subscriptions. There were some examples brought up about tangible goods – DVDs, Coke, etc. Its difficult to compare how we buy (and how merchants sell) tangible goods vs. virtual goods. With a software subscription, there is no cost of goods sold and the best thing possible for you is if your user logs on and uses your app every single day.
Usage-based billing models – part two