Freemium is a business model that combines the words “free” and “premium.” It allows companies to offer basic services at no cost while providing advanced features or expanded functionality at a paid tier. This approach helps brands attract a broad user base quickly while converting a portion into paying customers.

Examples of freemium models include platforms like LinkedIn, Dropbox, and YouTube. Users can access essential services free of charge but must upgrade to unlock premium benefits such as additional storage, advanced tools, or ad-free experiences.

The freemium model is powerful because it lowers the entry barrier for customers, builds trust, and showcases value before asking for payment. However, success depends on balancing the free offering so it’s useful enough to attract users while reserving features compelling enough to encourage upgrades.