文档介绍：Koen Pauwels & Allen Weiss
Moving from Free to Fee: How Online
Firms Market to Change Their
Business Model essfully
Moving from free to “free and fee” for any product or service represents a challenge to managers, especially when
consumers have plenty of free alternatives. For one online content provider, this article examines (1) the sources
of long-term revenue loss (through attracting fewer free subscribers) and (2) how the firm’s marketing actions affect
its revenue gains (through attracting paid subscribers). The authors quantify revenue loss from several sources,
including the direct effects of charging for part of the online content and the reduced effectiveness of search-engine
referrals and e-mails. The analysis suggests several managerial implications. Managers should focus their price
promotions on stimulating new monthly subscriptions, rather than the current promotional focus on stimulating new
yearly contracts. In contrast, e-mail and search-engine referrals appear to be effective at generating yearly
subscriptions. Meanwhile, free-to-fee conversion e-mail blasts are a double-edged sword; they increase
subscription revenue at the expense of advertising revenue. Finally, further analysis shows that the move was
preceded by the buildup of momentum in new free subscriptions, which appears to be beneficial for the move’s
ess. The position parison of the sources of revenue loss versus gains reveals several trade-offs
panies moving from free to free and fee.
Keywords: free to fee, online content, price, munication, search-engine referrals, time-series
analysis, vector-autoregressive models
decade ago, Peterson, Balasubramanian, and Bron- (Dyson 1995). Empirical findings on these issues are scarce
nenberg (1997) heralded the as a promising because firms are uneasy sharing data with academic
Anew channel for products and services that are low researchers for confidentiality petitive reasons.
outlay, are frequently purchased, and hav