My site uses a freemium model, and in some ways it kind of has to. The site is a social-network type site where writers critique each other's work. Members ca

My site uses a freemium model, and in some ways it kind of has to. The site is a social-network type site where writers critique each other's work. Members can join for free, but their accounts have lots of limitations that are lifted by paying a monthly fee. For my site, the most important part is having active members, whether they're paying or not. If nobody is active on the site to critique writing, then new writers won't join. Having a pay barrier to joining a community like this one would very quickly strangle it. Like most freemium plans, only a small percentage convert to a paid plan, but enough do to keep making it worthwhile. I even doubled the price of the paid plan at one point to see if it would affect conversions, and it didn't, so people are finding the model useful. So freemium works for a model like mine; but for many web apps, especially ones where the customer sets-and-forgets it, it might not make as much sense.