What is freemium?
"The term freemium is coined using two powerful words ‘Free’ and ‘Premium’. It describes a business model where in you give away a core product for free and then generate revenue by selling premium products to a small percentage of free users" (http://www.freemium.org/what-is-freemium-2/)
ExamplesThe internet phone service Skype is a prime example of the Freemium business model. The program that enables you to call between computers is offered free. If you want to call from a computer to a landline or have a voicemail associated with your Skype account you have to pay. The free program has hundreds of millions of users and only 10% of these free users are paying customers.This succinctly illustrates how Freemium has become a very popular business model in the software and internet services industry. Similar successful models are also emerging in the publishing, consulting and music industry. For an introduction to a range of example see ‘Tools and Cases’How is this possibleIn most freemium models less than 5-10% of the end users eventually buy something. When viewed from the traditional business point of view this does not make much financial sense. It is akin to giving away 100 apples for every 5 pears you sell.In spite of this things have changed. Thanks to innovations in digital production and distribution via the internet. This has created the possibility to copy and distribute free products to a larger group at very low or minimal costs. It is precisely because of this that it is easy to create a viable business model from selling to only a small percentage of end/free users.For more information on this please see http://www.freemium.org/what-is-freemium-2/
Here's a brilliant article on Freemium: what it means, what mistakes can be done when developing freemium apps/websites, and what customers are looking for when starting to pay after using the free version of a free app/website/webservice.
Here's the link: brett nelson freemium and I will just put a few paragraphs I found extremely interesting and importing when thinking of developing a freemium service.
"Most freemium businesses fail because Part 1 of the “right market” definition isn’t satisfied—that is, founders pick a hobbyist or “passion” niche where it’s much more difficult to charge money no matter how great your free version is. It’s much easier to stack the odds in your favor if: 1) you help people and companies make money, or 2) you’re in a market where spending habits are already proven, even if the relationship between price and value isn’t hard and fast (as with health sites and fitness, or dating sites and relationships).""Offer a minimum set of features for free, but charge for premium features, more storage space, and so on. (Think LinkedIn,SurveyMonkey, Dropbox and myriad online games.)"
"We give away either the process or the examples—but if you want both, you have to pay." http://www.forbes.com/sites/brettnelson/2013/07/23/the-freemium-model-top-flaws-and-potent-fixes/
A brilliant example for this, is a website I found extremely useful personally: Drawing tutorials online http://www.drawing-tutorials-online.com/. Matt Archambault, who is the artist offering these tutorials, has posted 12 really useful tutorials about drawing the figure from memory, free of charge online. they teach you a lot, they make you hungry for more, and, of course, if you DO want more, you need to get a membership which is chargeable. Brilliant freemium example and I can vouch I have experienced it myself.
If your freemium strategy amounts to a simple call to action—“Here’s a free sample… now sign up for the paid version to get even more!”)—then you’re in big trouble. To convert prospects to paying customers, you have to guide them down a specific path. Here’s one way:Step 1. Create a “general purpose” path that offers free content / tips / services to prospects who are interested in your topic, but not yet convinced they have a problem or that they need a product/service to solve this problem.Step 2. As they proceed on that path, ask if they want to learn more about a specific topic / solve a specific problem / take advantage of a premium feature—and be perfectly clear about what’s in it for them.Step 3. Deliver free content and/or a free service that solves part, but not all, of this problem and illustrate the benefits with case studies, testimonials, and client success stories. Throughout this sequence, offer multiple opportunities to sign up for your paid product or service.Step 4. If the person signs up, great! At that point, offer quick start guides, tutorials on using the product/service, and all the excellent support you can.Step 5. As part of that post-purchase period, ask what the next problems they want to solve are and go back to Step 3 to offer more free tips, tutorials, and services that solve some, but not all, of these problems.Step 6. If the prospect doesn’t bite on any of the paid products or services, that’s okay. Just go back to Step 1 and continue to stay in touch, offering more of your topical content and building the relationship.We do all of the above with a strategic barrage of emails, postal mail and (for existing customers) phone calls. The system grows in size and complexity each month. As an example, the arsenal might include:— General newsletter. This might feature weekly tips and interviews on the finance industry and tutorials on specific areas such as resume writing, networking, and interviewing.— Interview-prep content. If someone signs up and clicks a link indicating that she wants to learn more about how to ace a job interview, we would start sending over free tips and tutorials on that topic, with occasional prompts to sign up for our paid interview guide.— Post-purchase content. Say the person bought that guide. At this stage, we begin offering additional tips not found anywhere, and customers only receive these as a reward for continuing to open our emails. Along this path, we’ll offer opportunities to learn about more advanced topics (e.g. financial modeling or industry-specific nuances), structured tutorials, and other bundled packages.Sound too time-consuming to set up and maintain? I hear that a lot. But really: What else are you going to spend your time and resources on? Creating random free content or promotions with no real structure or strategy?I once considered creating free promotional sequences for all of our entry-level products. (More free tips and tutorials could only help boost conversion rates, right?) After way too many lost hours, I scrapped much of this work and focused the teaser sequences on: 1) higher-priced courses (because entry-level products are rarely the best candidates for comprehensive promotions), 2) customers who had already paid for entry-level courses and might be looking to learn more, and 3) courses where conversion rates could be substantially improved.Remember: If you want to lure customers without giving away the store, stick to the four freemium fundamentals: Choose the right market; distinguish between free and paid content in a way users care about; track the metrics that matter; and create clear “paths” for promising prospects.Do all that and you’ll turn your freemium fantasies into real profits."(http://www.forbes.com/sites/brettnelson/2013/07/23/the-freemium-model-top-flaws-and-potent-fixes/)
Web browser based games
"A browser game is a computer game that is played over the Internet using a web browser.[1] Browser games can be run using standard web technologies[2] or browser plug-ins. The creation of such games usually involves use of standard web technologies as a frontend and other technologies to provide a backend. Browser games include all video game genres and can be single-player or multiplayer. Browser games are also portable and can be played on multiple different devices, web browsers and operating systems.[3]Browser games come in many genres and themes that appeal to both regular and casual players." (http://en.wikipedia.org/wiki/Browser_game)Here's a really good top of 50 best web browser games, I found quite inetersting: http://www.computerandvideogames.com/385605/best-browser-games-50-best-free-web-browser-games-you-can-play-right-now/?page=5

