The Future of Social Media and Freemium Models in 2021

The Future of Social Media and Freemium Models in 2021

Introduction:

As we enter the year 2021, it is crucial to analyze the trends and predictions that will shape the world of social media and freemium models. In this article, we will dive into the evolving landscape of social media, explore the concept of freemium, and discuss actionable advice for businesses looking to thrive in this dynamic environment.

1. The Evolution of Social Media:

a) Censorship and Autosharing: One prediction for 2021 is the increase in censorship on platforms like Twitter, juxtaposed with the rise of platforms like Parler, which emphasize less censorship. This dichotomy reflects the ongoing struggle to strike a balance between freedom of expression and maintaining a safe online environment.

b) Vertical Networks and Intimacy: With the rise of vertical networks and social networks tailored for close-knit groups, the social internet is becoming more intimate. Implicit social sharing, where features auto-share content, will become popular. This trend allows for natural conversations and fosters a sense of closeness among friends and family.

c) Audio Social Networks: Another intriguing prediction is the emergence of billion-dollar audio social networks, surpassing the growth rate of podcast companies. This shift signifies the growing popularity of audio content and the potential for new avenues of social interaction.

d) Paid Social Apps: Ad-based models are slowly losing their appeal, making way for paid social apps. It is anticipated that social apps charging premium subscriptions ranging from $5 to $5,000 per month will gain traction. This transition reflects a desire for premium experiences and a willingness to pay for exclusive content and features.

2. Understanding Freemium Models:

a) The Value of Free Users: Research suggests that a free user is typically worth 15% to 25% as much as a premium subscriber, with referrals being a significant source of value. Freemium models are successful because they offer indefinite free access, eliminating the cumbersome cancellation processes associated with limited-term offers.

b) Balancing Free and Premium Offerings: To attract new users effectively, free offerings must be compelling. If conversion rates are low, it indicates a need for more or better features to be provided for free. Conversely, if traffic is high but upgrades are minimal, it may be necessary to scale back on free offerings. Striking a balance between free and premium features is essential for long-term success.

c) Conversion Rates and Market Size: Aim for a moderate conversion rate, typically ranging from 2% to 5%. However, if targeting a smaller market, a higher conversion rate may be necessary. Early adopters, who are less price-sensitive, are likely to upgrade first due to the compelling value proposition. Consider their influence in driving product virality.

d) Sustaining Value: In order to keep increasing upgrades, it is crucial to continuously enhance the value of premium services. Late adopters are typically harder to convert, emphasizing the need for ongoing innovation and the provision of a compelling value proposition.

3. Actionable Advice for Businesses:

a) Understand Your Target Market: Conduct thorough market research to identify what drives your target audience's decision to upgrade. Tailor your freemium model to cater to their needs while providing a clear value proposition.

b) Continuously Innovate: View freemium as a commitment to innovation. Regularly assess and enhance your premium offerings to sustain and increase the conversion rate. Adapt to new trends and technologies to stay ahead of the competition.

c) Encourage User Referrals: Leverage the power of satisfied users to help your product go viral. Implement referral programs and incentivize existing users to invite their friends. Word-of-mouth marketing can be a valuable tool in expanding your user base.

Conclusion:

As we venture into 2021, the world of social media and freemium models presents both challenges and opportunities. By understanding the evolving landscape of social media and implementing a well-balanced freemium strategy, businesses can position themselves for success. Embrace innovation, cater to your target market, and foster user engagement to build a thriving social startup or leverage freemium models effectively. The future holds immense potential for those who navigate these realms wisely.