According to marketingbinder.com, Freenomics s a business model that encourages giving products away for free because of the increase in profits that can be achieved by getting more people to participate in a market. We as consumers don't quite grasp how a company can be successful by giving away products and services for free. The example that comes to mind when I think of freenomics is the free music app called Pandora. Pandora is a great example of how freenomics works. Although there is the option for subscribers to purchase ad-free listening for $4.99 per month, that is not how Pandora makes their profits. Pandora, and other freenomic operating businesses make their money because they have the ears of so many consumers listening to their streaming that advertisers will pay big bucks to get their advertisement streamed to listeners on pandora. Essentially, the more people that listen to Pandora the bigger the market gets which means the bigger the audience get which ultimately leads to higher priced advertisements. By offering free music services Pandora has earned profit into the millions in recent years. Freenomics turns out to be a win-win situation for consumers and Pandora. This new business model has show quite the success over the last few years and will continue to grow as we enter into more and more technology driven markets.
works cited:
"Freenomics." Marketing Binder. N.p., n.d. Web. 23 Nov. 2015.
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