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.
Examples: Iconic Cases
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 →
How they do it: AWS gives away free ”credits” to use their service and set up ones infrastructure on the AWS cloud computers However as soon as the company’s product need grow and exceed the capacity covered by the free credits, it has to pay for the additional use.
Learn more about Amazon Web Services →
How they do it: Spotify is a freemium service; basic features are free with advertisements or limitations, while additional features, such as improved streaming quality and music downloads, are offered via paid subscriptions.
Learn more about Spotify →
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 lot of apps in the Apple AppStore are accessible for free but then only allow using limited features or a trial period for the full version. To have access to the full version permamently, the user has to purchase a premium version.
Learn more about Apple iPhone/AppStore →
Below, the top industries for the pattern "Freemium" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Top Industries
17% of firms using pattern
14% of firms using pattern
12% of firms using pattern
All Industries
Below, the pattern "Freemium" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
7 pattern co-occurrences
5 pattern co-occurrences
5 pattern co-occurrences