It depends on your definition of freemium & your definition of user, I suppose. The 95/5 is Chris Anderson's guess/recommendation, not mine. But I'm sure you can find examples at all ratios.
I'll look at what I use. Both Weebly & Dropbox (I use the free of both) follow a true freemium model. IE, they both offer a perfectly usable free version. I'm not sure what percentage they do, but 1% - 10% sounds about right to me, especially if you discount those who are really sampling vs those who actually use.
I also use Gmail & Gdocs. These are theoretically freemium too, but at a much higher free/paid ratio.
You're going to see quite a lot in the professional/business software category. My explanation for this is that it is software people pay for. If you can sell your software/service, maybe can probably sell it with a freemium model.
If you can't sell it (eg photo sharing/search/etc.), maybe you just can't sell it. Freemium isn't magic.
The percentage has to relate to your marginal costs in some way. Even 1:2000 can be fine if your marginal costs are zero. You care about conversion rates only inasmuch as you care about absolute numbers.
*I recoiled a little when I read Anderson quoting an actual ratio. I think that it's a bit off. But I do think segmenting businesses by their ratio would be an interesting way of looking at them. A 5% business isn't following the same model as a .01% one.
There are a lot of different subsets of products that you could sell using the freemium model (content, raw infrastructure, access to applications and so on), I figure there are probably ballpark figures for the conversion rates for each of these.
What the big question is to me is what the 'optimal' conversion rate is and what the path to achieving that is.
Another huge factor (and one that the article completely overlooks) is what the competitive landscape looks like. If you're in the business of providing some freemium based item (say free email with a 100MB inbox, more is paid) then you're toast if you get a competitor with deeper pockets that gives away the same product that you are charging for.
Storage and services related to it (and bandwidth) will converge on '0' so you will need a lot of users on the input side of the funnel in order to make it work for the few that will max out your caps and that don't want to game the system by setting up multiple accounts.
I'll look at what I use. Both Weebly & Dropbox (I use the free of both) follow a true freemium model. IE, they both offer a perfectly usable free version. I'm not sure what percentage they do, but 1% - 10% sounds about right to me, especially if you discount those who are really sampling vs those who actually use.
I also use Gmail & Gdocs. These are theoretically freemium too, but at a much higher free/paid ratio.
You're going to see quite a lot in the professional/business software category. My explanation for this is that it is software people pay for. If you can sell your software/service, maybe can probably sell it with a freemium model.
If you can't sell it (eg photo sharing/search/etc.), maybe you just can't sell it. Freemium isn't magic.
The percentage has to relate to your marginal costs in some way. Even 1:2000 can be fine if your marginal costs are zero. You care about conversion rates only inasmuch as you care about absolute numbers.
*I recoiled a little when I read Anderson quoting an actual ratio. I think that it's a bit off. But I do think segmenting businesses by their ratio would be an interesting way of looking at them. A 5% business isn't following the same model as a .01% one.