What is Freemium ?
It describes a business model in which you give a core product away for free to a large group of users and sell premium products to a smaller fraction of this user base.
Freemium is not....
A common misconception is that freemium includes or consists of a free trial period though this is not the case. The difference is that a free trial allows a user to test a product or service for a limited time before buying the actual product.
A freemium model on the other hand provides a product or service that is always free and the premium part comes from offering the free platform of users additional products or services that for a fee can expand or improve their experience. So just because a free product appears in a business model does not make it freemium.
Another common misconception is that all business models that involve the use of free products
are freemium models.
There are three other business models centered on a free product, which are commonly used;
- Direct cross-subsidy,
- Gift economy.
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