"What they fail to realize is that once you start offering a valuable service for free it is very difficult to later charge for that same service." Of course.

"What they fail to realize is that once you start offering a valuable service for free it is very difficult to later charge for that same service." Of course. That's why you never give away for free those parts of your service that you think you might charge for someday. If you lure people with free services to grow an audience and then start charging for those same services when you have an established userbase, do expect a serious backlash against this bait-and-switch. You can't give things away then claw them out of the hands of your users like that. "And if that service happens to be the core value of what you have to offer, well, then you’ve just given it away. Yes, you can claim to use a “freemium” model in order to charge for added features or services over and above your core service, but, if you give away the most valuable part of your service, the uptake on the number of people who convert to the for-pay premium services is not going to be very high." Well, don't do that either, then. It's not because you're using a freemium model that you have to give away the best parts and then charge for some mostly irrelevant gimmicks and hope people will make what amounts to a donation to your business. The free parts of your service are a loss leader. You aren't merely not making money on the free parts, you're losing some. You have to justify those costs. Don't lose sight of that.