How the Freemium Model Works
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A play on the words "free" and "premium", the freemium revenue model relies on providing a free good or service to attract customers in the hopes that those same customers will upgrade to a premium good or service. Popular among online media companies, social media companies, and subscription-based businesses, the freemium model lowers barriers to entry by providing its service free-of-charge. While customers are certainly more likely to adopt when they pay nothing, the success of the freemium revenue model lies in the business' ability to convince its free users to upgrades to a premium service.
In this lecture, we'll explore the freemium revenue model in more detail and I'll explained why I don't recommend it for small businesses.