A “freemium” pricing model like Pandora, Dropbox, or LinkedIn off ers a basic service free of charge with the option to upgrade at a cost. It’s a common pricing strategy among web start-up companies to get users onto the site and then later to convince them to subscribe to a premium or enhanced version of the service. What are some of the benefits of a freemium pricing model to a company? To consumers?

Can you think of a situation when freemium pricing wouldn’t work?