The Drawback of Freemium Publishing

The drawback of Freemium Publishing, as highlighted by Gobry is that in order to generate a profit you require a lot of repeat users who would be willing to spend money on reading a serial. This means that this business model will not produce an income in the early years, while gaining readers. Hence in order for a publishing company to attempt this business model, they must be prepared to take the risk of losing money.  This ultimately means that this business model may not be attempted by smaller publishing houses, which will not have the resources to spare.

In China, Shanda Literature who provides Freemium publishing is a subsidiary of Shanda Interactive Entertainment Ltd; hence they can afford to run their Freemium Publishing site at a loss in the early years. Furthermore Shanda Literature makes a profit from its e-reader, the Bambook (Sun) and benefits from its relationship with China Mobile. 

Prior to a UK based publisher bringing the Freemium business model to the UK they should examine the successful Freemium providers in China with a view to harbouring similar relationships with mobile phone providers and facilitating the reading of Freemium literature through e-reading devices provided by them.

Gobry, P. “Explained: what is The Freemium Business Model?” Business Insider WebApril 8 2011 2.59pm. http://www.businessinsider.com/what-is-the-freemium-business-model-2011-4

Huang, W. “Shanda’ Stunning Success”. Publishing Perspectives. Web October, 16 2009.  http://publishingperspectives.com/2009/10/shandas-stunning-success/

Sun, H. “Publishing in China – Freemium Fiction”.  26 October 2011 http://blog.publishingtechnology.com/digital-solutions/freemiumfiction/