What is Freemium Model?
Freemium, which is a combination of the words free and premium, is the definition of a free version of any product or service.
Companies with a membership revenue model use the Freemium business model to build a base audience for their products. At the same time, it can be considered as an advertisement that prepares the ground for the sale of paid memberships. This model is commonly used in internet software and computer programs.
Freemium Model in the Software Industry
This business model has been used in the software industry since the 1980s. A similar version of the game definition in video games is called free-to-play.
Generally, freemium versions of services or products provide restricted usage to users and there are various methods of restriction;
- If you do not have a paid (Premium) membership in your Spotify subscription, you can listen to music in Spotify’s mobile application, but you cannot choose the song you want from the list you want. You cannot skip more than 5 songs during the day. The offline music listening feature also comes with the premium option.
- With the reinforcement called Nitro, the Discord application increases the voice and broadcast quality, as well as the server emoji and sticker capacity.
- According to the Freemium strategy, free storage is limited on cloud-based platforms such as iCloud and Google Drive, you have to pay additional fees to increase the storage space.
Limited Use Time
- All features of Microsoft Office applications are available to students free of charge and are under an educational license.
- Similarly, Jetbrains PyCharm IDE product is provided free of charge to students under an educational license. Non-student users must pay a fee.
- Some applications, such as Teamviewer, are free for personal use on the Freemium model.
The purpose of free product services is to increase the sales of paid memberships by enabling users to need other features.