Mashable let’s us know that Reddit looked a gift horse in the mouth and the experience was positive.
Many companies are faced with dire financial situations. In Reddit’s case it is a stingy corporate parent. Instead of watching their baby slowly die, the staff asked readers to donate. At first the plan was to give the micro philanthropists a profile badge, but that quickly changed once Reddit realized people were willing to pay. Enter the freemium model. Reddit’s future is still likely in doubt, but this is a great case study on consumer behavior.
Even in one of the harshest economic downturns in US history, people are still spending money. This begs the question. Are you willing to go out of business or ask your customers to pay for what they want? The answer, apparently, is ask them to pay. You may risk alienating some people of course. But the alternative is much worse. Reddit did this in the right way.
Without realizing it, they surveyed their readers and asked who might be willing to plop down the cash. The ones that said “yes” will now get added value. These readers are willing to pay. It’s not like Reddit suddenly went subscription only. The freemium model likely avoided a mass exodus that is typically accompanied by the Free>Subscription Only shift. In this instance Free>Freemium works.
Squeaky wheel normally gets the grease, no?
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