DEFINITION of 'Freemium'

A combination of the words "free" and "premium" used to describe a business model that offers both free and premium services. The freemium business model works by offering simple and basic services for free for the user to try and more advanced or additional features at a premium. This is a common practice with many software companies, who offer basic software free to try but with limited capabilities.


The freemium business model is popular for companies just starting out as they try to lure users to their software or service. An example of a freemium business model is Skype, a company that allows you to make calls over the Internet. Their basic service is free, but for more advanced services you have to pay a premium.

  1. Net Premiums Written

    Net premiums written is the sum of premiums written by an insurance ...
  2. Earned Premium

    Earned premium is a pro-rated amount of paid-in-advance premiums ...
  3. At A Premium

    At a premium is a phrase attached to a variety of situations ...
  4. Premium Balance

    The amount of premium that is owed to an insurer for a policy, ...
  5. Business Model

    A business model is a company's plan for generating revenues ...
  6. Annual Premium Equivalent (APE)

    Annual premium equivalent (APE) is a common sales measure technique ...
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