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Cloudlink is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?

a. pay-as-you-go
b. subscription-based
c. freemium
d. razor-razor-blade

1 Answer

4 votes

Answer:

C, freemium

Step-by-step explanation:

The word freemium is the combination of the words 'free' and 'premium' which translates to the provision of a good or service as free but charging for extra/additional features or services.

From the above question, the file hosting service is free with a 5GB cloud data storage for free. A fee is then charged for additional services on the hosting service as well as increase in storage space after the 5GB free storage cap.

Simply put, the freemium business model entails the payment for more data storage space and other services after the free storage space has been used up as well as other advanced feature consumers might be interested in.

A simple example is antivirus toolkit. A free antivirus software does the basic thing of securing your computer system. But services such as password security and internet security require you to pay a monthly or yearly subscription fee.

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