What is freemium and what are its risks?

Freemium is a monetization model where the basic product or service is provided for free, and additional features, extensions, or premium services are available for a fee.

Risks of freemium:

• Low conversion to paying users. Most users may remain on the free tier, reducing revenue.
• Abuse of free access. Users may use free features excessively, creating load on infrastructure without compensation.
• Difficulties in balancing functionality. It is necessary to find the right balance between free and paid features to avoid deterring users or making the paid product too weak.
• Support and updates. Free users require support, which increases costs.

Example: in a file storage app, the basic disk space is provided for free, but additional space and advanced features require payment.