Psychic Friends Network (PFNI) Readies 'Freemium' Mobile Apps in Bid to
Re-Dominate the Nearly $2.5B Psychic Entertainment Market
NEWARK, Delaware, December 12, 2012
NEWARK, Delaware, December 12, 2012 /PRNewswire/ --
Psychic Friends Network, the company that single-handedly created the psychic
entertainment market in the 1990s and generated over $1 billion in revenue, is
developing a mobile smartphone/tablet application (mobile app), a first for
the psychic service industry.
"This is a major breakthrough not just for the Psychic Friends Network, but
for the entire psychic service industry," said Marc Lasky, CEO of Psychic
Friends Network. "Our research indicates that among the under-40 customer
base, the new mobile app could quickly become the primary means for seeking
psychic services. And among our more traditional customer base, the new app
could broadly increase usage with its ease of accessibility."
Make Money by Giving Something Away
According to information and analysis provider IHS, "…the best way to make
money in the smartphone apps market is to give away apps for free-and to
generate revenue on subsequent sales of in-app purchases." This model of
offering apps for free, then charging for content, is known as "freemium."
This strategy represents the fastest-growing segment of the global smartphone
apps business, and will soon dominate the market.
IHS notes that a whopping 96 percent of all smartphone apps downloaded in 2011
were free and, predicts that in-app purchases will account for 64 percent of
total market revenue by 2015, compared to 39 percent in 2011. They further
reveal that well over 50 percent of the top-grossing apps on Android and half
the top games for iOS are free. It is notable that this trend is largely
limited to games, but then again, games are by far the most popular category
of all apps.
The company with the greatest success to date with freemium games and who
helped to popularize them is Zynga, which rode the popular FarmVille and its
other Facebook games to an initial public offering of almost $1 billion.
FarmVille is free to play, but players can purchase "farm cash," which can be
used to make crops immediately available for harvest. Other top public
companies using this strategy with mobile games include Electronic Arts
(NASDAQ:EA) with a market cap of $4.5B, Glu Mobile with a cap of $181M, Vringo
at $272M, and Renren at $1.2B.
The growth of mobile games, paid or freemium, is linked directly to the
explosive growth of smartphone use worldwide. A Gartner study states that in
the third quarter 2012, smartphones represented almost 40 percent of all
mobile units sold worldwide, a 47 percent increase from one year earlier.
The smartphone market is dominated by Apple and Samsung, with both companies
together controlling 46.5 percent of the smartphone market. Samsung's mobile
phones sales in particular continued to accelerate, totaling almost 98 million
units in the third quarter of 2012, up 18.6 percent year-on-year. Nokia
continues to sell enough units worldwide to garner attention, but its overall
market share has slipped to 19 percent compared to 24 percent for the same
period last year.
Adapting the Freemium Strategy to the Psychic Industry
Psychic Friends Network may not produce games, but they are in the
entertainment content business. In the past, the company's sizable content
offering could only be consumed by customers calling 1-900 numbers and
speaking live to psychic readers. In today's mobile-connected world, customers
want to enjoy their horoscopes and personalized psychic consultations from
anywhere, on the device of their choice and in many forms (text, audio chat,
video chat and more).
To address this new reality, the company plans to offer its new branded mobile
apps free for download with a special free text psychic reading introductory
"I expect that the new PFN mobile app will rival, and perhaps even surpass,
PFNI TV and more conventional online revenues within a very short order,"
Lasky said. "And our free-message offers will jumpstart that success."
In addition to branded mobile apps offering daily horoscopes and live
connections to psychic readers, PFNI will also offer other mobile services
that do not require an app:
oPremium SMS text services. Through this type of paid service, the company
will offer a daily horoscope sent to a customer's mobile phone.
oLive psychic advice. Customers can send a SMS text to a live psychic, such
as, "What do you think about my new job?" They will instantly receive a
text reply (at $.99 per text).
These premium SMS services can be directly added to the customer's mobile
phone bill (also known as carrier billing). This lowers the barrier to
purchase, as the customer does not have to key in a credit card on their
Freemium Is Not for Every Company
Dropbox, LinkedIn, Pandora and Skype are notable companies that gained success
by giving away their products and services free to build a customer base.
Skype was acquired by Microsoft for $8.5B, LinkedIn was worth over $9B after
its first day of trading, Pandora debuted with a $3B IPO, and pre-IPO Dropbox
raised a whopping $250 million on a $4 billion valuation.
According to Simon Hill at Digital Trends, the big freemium successes have
managed to combine good conversion rates with high retention, so that people
continue to play and purchase content for weeks, months or even longer.
The freemium approach, however, doesn't make sense for any business that can't
eventually reach millions of users. Typically only 1% or 2% of users will
upgrade to a paid product, according to David Cohen, founder and CEO of
TechStars, a start-up accelerator since 2007.
Psychic Friends Network is no stranger to large customer volumes with high
conversion and customer retention rates. At the peak in the 1990s, PFNI had
more than 10 million unique customers, with an impressive 25% conversion rate
over 1-900 phone numbers and an even more impressive 75% retention. The
average PFNI customer spent $350 per year, with 80% spent in the first six
PFNI is about to re-launch with a newly developed "version 2.0" technology
platform. The centerpiece of this re-launch are the company's new mobile apps,
which combine the best of PFNI's past proven conversion methods with the
latest freemium revenue strategy. Given their past track record, the company
is fully expecting to re-dominate the nearly $2.5B psychic market.
About the Psychic Friends Network, Inc.
The Psychic Friends Network, Inc. (PFNI) is a marketing and entertainment
company providing on-demand psychic advice as well as daily and weekly
horoscopes. PFNI connects professional live psychic readers with customers via
telephone (mobile and landline) and through their newly developed
state-of-the-art online platform enabling interaction with video chat, voice
or text chat. During the 1990s, PFNI pioneered the psychic industry with
memorable television/radio marketing and infomercials. PFNI is re-launching
the original brand on a new technology platform that will capitalize on the
latest social media and video technologies to connect psychics with consumers.
To learn more about PFNI, visit PsychicFriendsNetwork.com
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Forward Looking Statements
This press release may be deemed to contain forward-looking statements, which
may be subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements regarding the re-launch of
the Psychic Friends Network brand, PFNI's business plan, website and mobile
applications. Readers are cautioned that these forward-looking statements are
only predictions and may differ materially from actual future events or
results due to a variety of factors, including, among other things, PFNI's
ability to successfully re-launch its brand and operations and other risk
factors set forth in PFNI's current report on Form 8-K dated March 30, 2012.
Any forward-looking statements in this release are based on limited
information currently available to PFNI, which is subject to change, and PFNI
will not necessarily update the information.
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