Switching from hard paywall to freemium: over 50% fewer subscribers
Commentary byLiftArchiveOur analysis, not theirsA subscription app swapped its hard paywall for a freemium model and saw subscriber conversion fall by more than 50%.
Growth advisor Phil Carter (Elemental Growth) ran the change with the app's team, then reversed it after a couple of weeks; it was published on the RevenueCat blog.
It was a clear loss, from a move that had worked for a different client.
- Subscriber conversion: down by more than 50%. This is a negative result.
- The team pulled the change after about two weeks.
- No LTV, retention or sample figures were shared.
The change
Hard paywall vs a dismissible paywall with a free version behind it
Simplified mockup drawn by LiftArchive from the shared screenshots.
Control
A hard paywall: users had to subscribe to use the core product.
Variant
A freemium model similar to one that had raised LTV for another client, with a free version of the product available.
Why it likely lost
Our reading of the result, not the practitioner's claim.
- With the gate gone, the free product had to prove its value alone. Users got too little reason to upgrade, or left before forming a habit.
- A model that worked for one app doesn't carry over unless product-market fit and retention are just as strong.
- Two weeks is too short to see any later upside of freemium, such as more organic installs.
Caveats: Before/after rollout over a couple of weeks; the source does not say whether it was a split test. Few details on the free tier itself were shared.
Who ran it
Phil Carter ran this test. Source: RevenueCat blog. The numbers are theirs; the summary and commentary on this page are ours.
How to run this test on your app
- Hypothesis
- If we add a free tier instead of a hard paywall, then LTV per install will rise because more users build a habit before paying, provided the free tier still leaves a clear reason to upgrade.
- Primary metric
- LTV per install
- Guardrails
- Subscriber conversion
- Early churn of free users
- Cash flow from paid acquisition
- Who should test it
- Only apps with strong retention, runway to ride out a conversion dip, and analytics to tune gating. Apps that solve a one-off, urgent problem, or that are bootstrapped, are likely to see this kind of drop.
Questions
Why did freemium fail here when it worked elsewhere?
The source points to product-market fit. Freemium only works if the free product earns daily use and still leaves a strong reason to pay.
How long should a freemium test run?
Long enough to see retention and LTV, not just day-one conversion.
This team stopped after two weeks because the drop was so large, which is a fair call when cash is at stake.
How can we lower the risk of trying freemium?
Roll it out to a slice of new users with a holdout on the hard paywall, and set a stop-loss on subscriber conversion before you start.