Definition of freemium

Freemium is a strategy for the marketing of products or services offered for free (from there "free") but where it will be necessary to pay to access advanced features or functionalities or virtual goods (from there "premium").

Usually the Freemium products are offered digitally as programs, games, web services, etc.due to the advantage of being able to be distributed with very low copy cost.

Freemium has become a very popular distribution model for products/services such as LinkedIn, Badoo, The New York Times, some Amazon services and countless free mobile games such as Bejeweled Blitz, Candy Crush Saga, etc.

In the case of freemium games It is very common for the player to buy virtual items that help improve the game (See: virtual goods).

Many critics of this model call it derogatory "Pay2Win" (pay to win), where it is criticized that the players that pay have advantages over those who have more skills.

In fact there are games that require considerable effort to finish them, such as My Little Pony: Friendship Is Magic, it has been calculated that you need to play every day for 10 years to complete it for free (without buying the necessary gems).

Origin of the freemium

The freemium, as a business model, has been present in the marketing of software since the 80, for example when a program was offered in a "lite" version (limited, see: crippleware) and then promote the full paid version.

Instead, the term "freemium" was created more recently, when Fred Wilson in 2006 when he wrote on his blog: "Offer your service for free, possibly supported by advertising but maybe not, get many customers thanks to word of mouth, through recommendations and referrals, search engine advertising , etc., and then offer paid services from added value or an enhanced version of your service to your customers."

Then Jarid Lukin suggested the term" freemium "for this model.

Features of the freemium

A freemium product or service has certain restrictions in its free version:

-Limited features.For example, a program that has almost all its free features but to access the most advanced or useful ones, it is necessary to pay.

-Capacity limited.For example, a free online storage service limited to an X amount of gigabytes per user.

-Limited by type of user.For example, a program that It is only free for home use, but must be paid if used in a company.

-Support or limited help.For example, the freemium version of a service does not offer personalized help.

-Limited in time or bandwidth.

-Effort limited.For example, a game where all or almost all of its features are free, but requires s Ustantial effort to advance or obtain items or virtual currency and, therefore, these allow to be purchased with real money.

• Virtual goods

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