Freemium is a business model in which a company offers basic or limited features to users at no cost and then charges a premium for supplemental or advanced features. The freemium business model dates back to the 1980s, though the term was coined in 2006. Freemium models are especially popular among software applications and internet-based businesses. This type of business model has the advantage of acquiring a large set of initial users, especially when there’s no cost associated with trying out an app or a service. Ultimately, for the freemium model to work, companies must ensure that their premium users can access more upgraded features, such as increased storage or customizations, and additional customer service.