The freemium business model is still a viable strategy for companies that offer long-term free-of-charge access to users but not for premium features. Ensuring its success requires meticulous planning and consideration.
Offering an excessive amount of free content and too few premium features may pose a challenge. In a study, low-end products should be "regular-priced", and the profit of a single product should be maximized.
Freemium can provide a reliable source of revenue, eliminate payment hassles for users, and serve as a potent tool for behavioural marketing. However, it also carries potential risks, such as the cannibalization of the premium version or the emergence of substitutes. Companies should adopt this strategy only when network effects between the products are symmetrical, ensuring optimal outcomes.