I had to look up the “word” freemium to verify its meaning, quickly confirming what I had thought it meant: the term is used to describe web services offering both free and paid access options for its members. Supposedly, if you join a site and enjoy its free services, you might be enticed to upgrade to a paid plan offering more features and a robust platform.
As soon as I understood the term, I realized I participated in such an arrangement when I used EZBoard (now Yuku) to power my message board communities. That eventually proved a disaster–and the community’s undoing–when a 2005 security breach resulted in many member boards being erased with most of their information permanently deleted.
That’s another story, one I would much rather forget, but that incident lead me to explore my own hosting options. Today, I use WordPress exclusively on sites I manage and control. Lesson learned.
Ning employs a freemium model or least they do at the moment. According to The Wall Street Journal, Ning is getting rid of its free option and laying off 40 percent of its workforce. Ning expects that as it moves from free to paid services many of its members will leave, thus the cutback.
Ning’s decision is based largely on web advertising income or the lack of it. Some companies, such as Facebook, seem to have found their revenue generating cash cow, but then few sites have the scale of Facebook to attract a variety of lucrative advertisers. Like some newspapers, including the Journal, Ning believes promoting a paid model is in its best interest.
At the moment, Ning claims 46 million subscribers across 300,000 active networks. Many of these networks are managed by educators and non-profits, people who are attracted to this sort of arrangement. I haven’t confirmed what the paying model will be, but a base fee of $4.95 is being considered which is also what GoDaddy charges monthly to host your website on your domain.
Just this morning I registered for Ning and discovered I was already participating through another network. I established my own community, PR Writer, with tentative plans to develop it into something to attract people to my press release writing services. Ning didn’t ask me if I wanted a free account so I don’t know if I’ll get an upgrade request or have my account erased when the new business model is released next month.
In any case, I’ll hold back from adding anything to PR Writer until I see if my Ning account will be around and whether this option proves worthwhile for me.
Yes, there is a reason why Ning and arrangements like it can be beneficial: social networks of this kind make it easier for people to find you. For no other reason if Ning brings in some customers, then it might be worth paying the token fee to them each month.