If your free product is indeed a quality product that people want, it will generate a lot of attention. In order to make the overall model profitable, you need the right complementary products to generate revenue from this attention.
The Rock group Nine Inch Nails is a great example of adaption product. In conjunction with the free album “Ghost I-IV”, fans could buy a range of other products – ranging from the extended $5 download, to a $ 300 limited edition super deluxe box edition.
Isn’t this just a marketing stunt?
In modern society based on broadcast media, most people associate marketing with a narrow definition. You probably don’t want the aggressive advertising and PR involved in selling products. From this perspective freemium is not marketing. You give people a product of value and they are free to stop there.
In a broad definition, this is about creating, communicating and delivering offerings. From this perspective, freemium is marketing. It is a way of spreading your ideas to a large group of people.
When Google launched Gmail, half the people I know had a Gmail address within one year. The service spreads viral, without advertising. While Gmail is not based on the freemium model, it is a great example of how a great free product that people want will spread.
Using freemium, the free product has the possibility of spreading viral. As the use of the free product increases, the demand for the revenue generating products increases.
The business model recognises the value of a free user, even if they don’t end up generating revenue.
Instead of calling freemium a marketing stunt, I would define it as a business model with integrated viral potential.