What Is Freemium?

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Freemium is a business model that works by offering basic Web services, or a basic downloadable digital product, for free, while charging a premium for advanced or special features. The word "freemium" is created by combining the two aspects of the business model: "free" and "premium". The business model has gained popularity with Web 2.0companies.

The freemium business model was articulated by venture capitalist Fred Wilson on 23 March 2006.

"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base."

An early example of the freemium model working on the internet was Musicmatch Jukebox, an all-in-one music management tool that was first marketed with a freemium model in 1999. Most users could use the Basic/Free version, but a $19.99 upgrade provided extra features such as supertagging and faster ripping and burning. 

According to the New York Times, freemium is becoming the "most popular business model among Web start-ups." Some of the most popular services, such as Pandora, Flickr, LinkedIn, Spotify and Skype use the freemium model.

§  Feature limited

§  Time Limited

§  Capacity limited

§  Seat limited

§  Customer Class Limited

What is Dodd-Frank Act?

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President Barack Obama's policy architects say they will begin enforcement of a sweeping new set of financial regulations intended to govern risk-taking on Wall Street and offer greater protection to consumers. The goal is to help the U.S. economy return to prosperity even as troubling signs of a global downturn remain.

According to Wharton experts, the Dodd-Frank Wall Street Reform and Consumer Protection Act is a good start toward future financial stability, but they warn that significant concerns remain unaddressed, and stress that the details of implementation must be handled carefully to avoid creating new problems.

 HIGHLIGHTS OF DODD-FRANK ACT

1.    Consumer Protections with Authority and Independence: Creates a new independent watchdog, housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

2.    Ends Too Big to Fail Bailouts: Ends the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy by: creating a safe way to liquidate failed financial firms; imposing tough new capital and leverage requirements that make it undesirable to get too big; updating the Fed’s authority to allow system-wide support but no longer prop up individual firms; and establishing rigorous standards and supervision to protect the economy and American consumers, investors and businesses.

3.    Advance Warning System: Creates a council to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy.

4.    Transparency & Accountability for Exotic Instruments: Eliminates loopholes that allow risky and abusive practices to go on unnoticed and unregulated -- including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

5.    Executive Compensation and Corporate Governance: Provides shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.

6.    Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.

7.    Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits special interests at the expense of American families and businesses.