Definition of freemium

Freemium is a business model where a free product or service is provided along with optional premium upgrades.

It was popularised in the 1980s through software products, where a limited version was given away for free on disc as an incentive to upgrade to a more extensive, paid option. The word comes from the union of 'free and premium'.

The model is frequently used for paywalled websites, on which a limited amount of information is available before readers are required to subscribe. It is also used in gaming, whereby in-game currency for premium items can be bought with real-world money. 

 

freemium in the news

In April 2013, an FT report drew attention to the increasing number of complaints about children being "unfairly pressured" into buying additional content on games downloaded from online stores. It reported that Apple has been giving refunds on a case by case basis and that in March 2013 had refunded £1,700 to parents whose son had spent it playing an iPad game. In February Apple had settled a class action suit brought by parents in the US who blamed the company for failing to provide adequate controls.

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