Free gets people to try. If they it like it enough, they’ll pay a premium or subscribe. This is the Spotify model and works for companies looking for wide scale. It also works for companies like Paper 53.
Paid also gets people to test, especially at the .99 price point. You may not scale but you’ll make money from a solid fan base, which you have to continue up-selling into long-term customers.
Then there’s products that are completely free and supported by ads, such as Facebook and Twitter. The large community and conversation enriches these products
A combination of product utility and developer ambition determine the incipient model: Freemium, free, or paid. How you start isn’t necessarily how you evolve.