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Freemium – the new way to pay

Freemium is a business model whereby a product (typically a video game or app) is given away freely, but the user must pay for premium content or add-ons within the product. The term comes from a mixture of the words free and premium.

This is a growing trend in the mobile app business, where end-users are more inclined to download an app or game for free than to pay outright for something they’re uncertain about.

Sometimes the app will be limited in some way and extra features may be unlocked by paying for them. In games, it may be possible to gain additional features such as new characters, levels or abilities by paying for them.

An example of a Freemium app is Skype, which allows you to make internet-based phone calls, however additional features such as voicemail or calling to landlines must be paid for.  An example of a game that is Freemium is Farmville, that allows you to play for free, but also to pay for premium content.

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