freemium

thumb|In the freemium business model, business tiers start with a "free" tier. Freemium, a portmanteau of the words "free" and "premium", is a pricing strategy by which a basic product or service is provided free of charge, but money (a premium) is charged for additional features, services and virtual (online) or physical (offline) goods that expand the functionality of the free version of the software. This business model has been used in the software industry since the 1980s and is closely related to tiered services. A subset of this model used by the video game industry is called free-to-play.

The term freemium was coined in 2006 in response to a blog post by venture capitalist Fred Wilson. Freemium services commonly limit the free version by features, capacity, or time, while reserving additional functionality or content for paid users. The model is used in software, online services, media paywalls, and video games, where revenue may come from subscriptions, advertising, or purchases of premium content. It has also been the subject of criticism, particularly in discussions of monetization practices in some free-to-play games.