Giving the core product away free forever and earning money from the small slice of users who pay to unlock limits, features, or extra seats.
Spotify ended 2024 with around 615 million monthly active users, of which roughly 263 million were paying subscribers, a conversion rate near 43%. The free tier carries ads and skips restrictions, the paid tier removes both. The model only works because music is cheap to stream relative to the lifetime value of a paying user, a balance most freemium attempts cannot strike.