Startup Dictionary
Freemium
Definition
A business model where basic services are provided free of charge while more advanced features must be paid for.
Deep Dive
Freemium is a business model where basic services or a limited version of a product are provided free of charge, while more advanced features, functionality, or additional content must be paid for. The word itself is a portmanteau of "free" and "premium." This model aims to attract a large user base with the free offering, creating widespread adoption and brand recognition without the friction of an upfront cost. Users can then experience the core value of the product before committing financially.
Examples & Use Cases
- 1Spotify offering free music streaming with ads and limited skips, alongside a paid premium subscription for ad-free listening and offline downloads
- 2Zoom providing free video conferencing for limited durations, with paid plans for extended meetings and advanced features.
Related Terms
Subscription ModelTiered PricingUser Acquisition