Freemium is a business model that offers the use of software applications, online services, or computer games for free, while an enhanced (improved, premium) version of the product, with advanced functionality, services, or other related features, are offered for an additional fee.
In the 1990-2000s, programs distributed under the terms "freemium", as a rule, belonged to the shareware group. Since 2010, "freemium" is regarded as a separate class of software.
Usually, a freemium model is used when it is important to attract more potential customers to the project. To implement this strategy, the owner sets the lowest possible entry threshold for using the app. In this case, as a result, the share of paying users is quite small.
The ability to pay for the full version without leaving the mobile application, transfers freemium apps to the category of projects that support in-app purchase.
Product distribution based on the "freemium" model serves to:
- Attract a wide range of users;
- Receive feedback from users;
- Estimate a demand for a product (service) in the market;
- Identify people and organizations willing to pay for a product (service) with improved qualities;
- and others.
Most software products provided on the basis of the "freemium" model are limited to:
- Set of available functions;
- Amount of free space;
- Number of licenses;
- Sphere of usage (for example, free antivirus only for home use or only for educational institutions).
"Free-to-play" is the term used for massive multiplayer online games (MMOG).You can play for free, but make regular small purchases to gain additional features or advanced conditions, improving your playing potential. Most social games are monetized this way; provided that you buy game currency for real money first, and then spend it on virtual items.
Mobile application stores like Google Play and the App Store almost profit by the "free-to-play"/"freemium" programs.