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Freemium 18#

The basic version of an offering is given away for free in the hope of eventually persuading the customers to pay for the premium version. The free offering is able to attract the highest volume of customers possible for the company. The generally smaller volume of paying ‘premium customers’ generate the revenue, which also cross-finances the free offering.

Apply this pattern to your own business and create your next innovative business model!

Examples: Iconic Cases

How they do it: Much of Skype’s service is free. Skype-to-Skype calls to other users are free of charge, while calls to landline telephones and mobile phones (over traditional telephone networks) are charged via a debit-based user account system called Skype Credit.
Learn more about Skype →

How they do it: Hotmails basic inbox and email service was offered to customers for free. However, the inboxes came with limited storage for messages. Users could upgrade their storage by paying a monthly or annual fee.
Learn more about Hotmail →

How they do it: Amazon is giving away a free 1-month trial for its premium subscription ”kindleunlimited” which allows the customer unlimited access to media such as e-books, magazines and audio books for a flat fee payable every month. This enables customers to test the service and Amazon to upsell the full subscription to users of the free trial.
Learn more about Amazon Kindle →

How they do it: A basic version with limited hosting space is offered to customers for free. However, customers then have the chance to purchase subscriptions for larger amounts of storage space.
Learn more about Dropbox →

How they do it: Regular use of the LinkedIn platform is free and users can use the majority of the functions. However, LinkedIn offers various premium subscriptions allowing users to unlock even more functions or more intense use (e.g. unlimited profile searches).
Learn more about LinkedIn →

Apply this pattern to your own business and create your next innovative business model!