What Is Freemium vs Premium? In the race to create membership websites that customers will stick to, businesses are constantly exploring new ways to monetize their products or services. 

One popular strategy is to offer membership sites where users can access exclusive content or features. Deciding between freemium and premium models, however, can be a challenging task. 

So what is freemium vs premium all about? What are the pros and cons of each approach? Let’s find out.

What is Freemium?

Freemium is a business model that offers basic services or features for free, while charging a premium for additional or advanced functionalities. 

It combines the words “free” and “premium” to reflect this dual approach. Freemium models are designed to attract a large user base by providing a taste of the product or service, and then encouraging users to upgrade to a paid version for enhanced benefits. 

One example is how Remini allows users to enhance their photos once per ad view using AI, then offer weekly, monthly, and yearly packages to be able to enhance multiple photos, generate AI images using uploaded photos, and other advanced features. 

This strategy allows businesses to grow their customer base while generating revenue from a subset of users who require more advanced features.

What is Premium?

Premium, on the other hand, is a business model that offers a product or service at a fixed price or through a subscription. 

Unlike freemium, premium models do not offer a free version or limited features. Instead, customers are required to pay upfront to access the full range of benefits. Premium models are often associated with higher quality, exclusivity, and a more comprehensive set of features. 

Have a Netflix subscription? They work on the premium model. Netflix only allows people to watch its content if they subscribe, since both the company and prospects know that Netflix offers premium content that is multiple levels above the free stuff on YouTube. 

Netflix, like other premium providers, cater to customers who are willing to invest in a premium experience and value the convenience and enhanced functionalities it offers.

Freemium vs Premium: Which Monetization Strategy Should You Use?

Choosing between freemium and premium depends on various factors, including your target audience, the nature of your product or service, and your long-term goals. 

Let’s discuss the pros and cons of each strategy to help you make an informed decision:

1. Freemium Model:


  • Attracts a larger user base by offering free access to basic features.
  • Provides an opportunity to upsell premium features to a subset of users by warming them up via your free version.
  • Helps build brand loyalty and a community around your product or service.


  • May lead to lower revenue initially, as only a portion of users upgrade to the premium version.
  • Requires careful planning to strike a balance between free and premium features.
  • Involves ongoing maintenance and support for both free and premium users.

2. Premium Model:


  • Generates immediate revenue from customers who are willing to pay for your product or service.
  • Allows you to focus on delivering a premium experience without the limitations of a free version.
  • Offers a clear value proposition and positions your business as a premium brand.
  • Lowers support costs as you do not have to provide tech and delivery costs to people who aren’t paying.


  • May limit your customer base to those willing to pay upfront.
  • Requires consistent delivery of high-quality features and customer support to justify the premium price.
  • Might face competition from freemium alternatives or similar products with lower price points.

Deciding between freemium and premium models is a crucial step when building a membership or subscription site. 

While freemium attracts a larger user base and offers upsell opportunities, premium models provide immediate revenue and position your business as a premium brand. 

Ultimately, the right strategy depends on your target audience, the nature of your product or service, and your long-term goals. 

By carefully considering these factors, you can choose the most suitable monetization strategy to drive success for your membership site.

Read next: What Are The Steps In Membership Management?