I believe that it has to to do with the number of entries. I have seen it vary from 10% ITM to 25%, Some freerolls have a set number ITM so the percent in the money can be much lower. I played on yesterday that had over 600 players and only paid the top ten. So, that would be about the top 1.5% ITM.
Every site and tournament has different structures. Also something to consider too is if it just makes it into the next tier before registration closes, the eligible players going for ITM might be smaller. Ultimately it's up to you on what you prefer. More winners for a better chance to profit or less winners and bigger prizes if you get to the later stages of the MTT.
Interesting topic and comments. I also think the percentage of players that get a percentage of the prize pool is directly associated with the buy-in amount.
Here is an example;
I regularly play one 500gtd event that costs $2.75 to buy into.
There is another 500gtd that runs daily - and this event is a 0.27 cent buyin. I do not play in this event very often. I prefer the 2.75 buyin event - mainly because their are 90% less idiots - that jam with any pair on the flop. Of course we want to play against these idiots - but when the field is 75% of these players - it makes NOT POKER - and more some kind of happy go lucky IDIOT bingo fest.
In the 2.75 500gtd - these players are poker players that play poker - not bingo. We will get on occasion some of the "special" helmet wearing players mentioned above - but they last about 3 orbits and have donated all their chips to the stronger player pool.
Back to the related topic though - the 27 cent event gets about 1000 runners in it daily and the money bubble is somewhere around 180th, with about a 3x return of 78 cents, with the top winner getting 16% of the prize pool which is about $80.00.
Compare that to the 2.75 buyin. which only gets about 350 runners on average. Stronger players but the field is approximately 1/3rd.
The payout doesn't start until about 50th place and the min-cash is essentially slightly over the buyin, but up top the winner is getting almost 18% of the prize pool - about 90 bucks.
So to reduce variance - the players have to pay more to enter - logical - but will have smaller field to go through - and they will get a larger cut of the prize pool up top.