Freemium is a business model that combines offering a product or service for free, with the option to upgrade or access additional features through a paid subscription or in-app purchases. The term “freemium” is a combination of the words “free” and “premium”.

In the freemium model, the basic version of a product or service is made available to users at no cost. This allows the company to attract a large user base and gain visibility in the market. The free version typically offers limited functionality or includes advertisements, which can be removed or enhanced by upgrading to the premium version.

The goal of freemium is to convert a portion of free users into paying customers by providing them with a taste of the value and benefits that the premium version offers. This strategy relies on the principle of the “freemium funnel”, where a small percentage of free users will eventually choose to upgrade.

Freemium models are commonly found in various industries, including software applications, mobile games, online services, and media platforms. Companies that adopt this model often focus on creating a compelling user experience in the free version to encourage users to explore the premium features.