55 Business Model Patterns. #18. Freemium

 

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: 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.

Top Industries

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.

Pattern Co-Occurrence

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.

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