Freemium

Freemium is a business model that offers a basic version of a product or service for free, while charging a premium for additional features or functionality. The term is a portmanteau of the words "free" and "premium."

Freemium models are often used by software companies, as they allow them to reach a wider audience and generate revenue from a smaller number of users. For example, the popular productivity software suite Microsoft Office offers a free version that includes basic word processing, spreadsheet, and presentation tools. Users who need more advanced features can purchase a subscription to Microsoft Office 365, which includes additional features such as online collaboration, cloud storage, and security.

Freemium models can also be used by other businesses, such as online streaming services. For example, the popular video streaming service Netflix offers a basic subscription plan that allows users to watch a limited number of movies and TV shows. Users who want to watch more content can upgrade to a premium subscription plan, which offers access to a wider selection of movies and TV shows.

Freemium models can be a successful way for businesses to generate revenue, but there are also some risks associated with this business model. For example, businesses that rely on freemium models need to make sure that they offer enough value to their free users to keep them from switching to a competitor's product or service. Additionally, businesses need to be careful not to alienate their free users by making the premium version of their product or service too expensive or too difficult to use.

Overall, freemium models can be a valuable tool for businesses that want to reach a wider audience and generate revenue from a smaller number of users. However, businesses that use this business model need to be aware of the risks involved and make sure that they offer enough value to their free users to keep them from switching to a competitor's product or service.