Designing Freemium with Usage Limitation: When Is It a Viable Strategy?

•This study models the usage-limiting variants of freemium operations.•Two freemium strategies emerge from analyzing users’ response to usage insufficiency.•A full coverage strategy results in a high free-usage limit and price but low demand.•A partial coverage strategy results in low free-usage limit and price but high demand.•Market parameters determining the optimal strategy are identified.