Freemium
Freemium is a business model where a company offers a basic version of its software or service for free, while charging for access to more advanced features or capabilities.
How it works
It works by attracting a large user base with the free tier, then converting a portion of those users into paying customers who need the premium features. This model is common in SaaS and AI tools because it lowers the barrier to entry and allows users to experience the product's core value before committing financially.
Examples
- 1.A project management tool that is free for up to 3 users but requires a paid subscription for larger teams and advanced reporting.
- 2.An AI image generator that offers a limited number of free images per month, with a paid plan for higher resolution, faster generation, and commercial usage rights.
- 3.A music streaming service with a free, ad-supported tier and a premium subscription for ad-free listening and offline downloads.