Any of the apps above look familiar? You may know them as your average app in your smartphones that you downloaded for free. What you don’t know is that they are part of a grand scheme called Freemium.
So, what are Freemiums and why are they taking the world of applications by storm?
Freemium is a coined term that combines the word Free and Premium. From the name itself, it is giving a premium product for free. It can be an application, game, or any service that a company offers for free, but with the long term goal of eventually making money from it by charging for upgrades, improvements or additional services.
There are many ways on how companies use Freemiums. Some offer them for free, but for you to move on to the next level or buy a certain product; you have to shell out money to avail them. On the other hand, others offer the full version of the app for a limited time, and then once time is up, the app will no longer allow them to enter, thus, giving the subscriber no choice but to buy the whole app because he is already hooked.
You must be wondering on how the app developers earn millions, when they sell a free product. Well, the answer is easy, Freemiums. Based from recent research, regular apps which you have to pay to download doesn’t have a steady revenue path. This is because they only get the money at the onset, after that, they no longer get any money from their subscriber. While with Freemiums, money is sustained because the revenue path is, yes, low, but has a steadier path when compared to regular apps. This is because money doesn’t stop upon getting the app, money is earned through time. With more people appreciating the app because it is free at the start, there will be more people who can be potentials for your revenue to even grow.