But this also seems to be another case of tech companies trying to have it's cake and eat it too like the recent reddit debacle. The freemium model comes with trade-offs and businesses can't have it both ways. 'Free' users should be viewed as free marketing and advertising for generating paid users not as lost potential revenue.
No business using the freemium model should expect to magically convert the free users to paid users and still retain the popularity generated by the free users. You would think as many times as tech companies have that shot themselves in the foot like this our industry might stop attempting to do this. When does this actually work?
It works when the free tier is usable, but highly limited. Then it effectively becomes a free trial, albeit with no time restriction.
For example, if Evernote had limited the free tier to 99 notes and syncing with 2 devices. That’s usable enough for a user to get a feel for whether they like it or not, but without an expectation that the free tier could support all their needs for note generation and storage.
The problem comes when the free tier is so restraint-free that people begin to use it as a daily driver without ever expecting to upgrade to a paid tier. At that point, the company has boxed themselves into a situation with users who generate costs but no corresponding revenues. Trying to convert _those_ users into paying customers is difficult or impossible, in my opinion.
No business using the freemium model should expect to magically convert the free users to paid users and still retain the popularity generated by the free users. You would think as many times as tech companies have that shot themselves in the foot like this our industry might stop attempting to do this. When does this actually work?