Freemium is a business model through which products can be proposed, or more commonly services that are provided free of charge and aimed at attracting a large number of users. We then sought to convert these users into customers to use paid premium service versions or other services that were paid concurrently.
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The principle of freemium is especially applicable to games on mobile phones or social networks, so we also call it “free games” or F2P. In theory, revenue is generated by additional payment levels, virtual goods that can be purchased in the game, or time-accelerated services. For more details, see Free Games.
The principle of freemium is mainly developed on the Internet because it makes it possible to provide free services at a lower cost and to fund free services at least in part through advertising.
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In fact, many free Internet services are based on a hybrid and often evolving model that mixes advertising funds with premium service funds. The basic version of LinkedIn, a free social platform, is free. It is funded by advertising and sells other features for users.
The whole challenge of the freemium model is to convert users from free to paid services. Freemium versions of some services or games are very successful, but it is difficult to get enough profitability.
UPdates: February 2023