'Freemium' model a growing marketing trend

According to a recent iYogi study of 2,000 people, 42 percent of respondents said they've paid for new products and services after they've experienced them for free.

This emphasizes the rise of the "freemium" model of business marketing that more companies have employed, including brand names such as Ancestry.com and Words with Friends, Fox Small Business explains.

The model works by giving away basic versions of a product or service for limited use, and then charging a premium for long-term use with the addition of advanced features, functionality or related products.

Researchers found that the movie and video industry showed the most success using freemium techniques, with a 57 percent conversion rate from free to paid subscriptions. What's more, the majority (68 percent) of first time users of streaming services such as Netflix were more apt to subscribe after the free trial period ended.

"The internet has led to the launch of a wide range of innovative products and services that change the way we interact with and use media and other goods," said Vishal Dhar, co-founder and marketing president of iYogi. "People often don't realize the value of these products in their everyday lives until they actually try them, especially if they have to use their hard-earned money to access them. This new research reveals that a free introductory offer goes a long way in unlocking the value of a new product or service and leads to higher acceptance among potential buyers."

CNet Asia recently reported that game consoles such as Xbox 360 may also consider freemium in the future, although because titles cost too much for developers to just give them away, a price barrier still exists.