Freemium model vs Paid app?

I have a free app in the market and had been planning on developing a paid version, but my concerns are that (1) the 30% Google takes from app purchases is way too much, and (2) the paid version of the app won’t get nearly as many downloads, and the low download count will cause some people to avoid considering it.

Has anyone had success with making an app (with website login also) that allows users to create accounts (email/username/password) for free membership, and upgrade to premium account via Paypal or Stripe credit card payments? I feel like doing that will prevent a lot of data redundancy, since I could just add all of the premium features to the current version of my app and make it accessible if the logged in user has a premium account. Another benefit is that I could run better promotions, such as giving away a free month of premium membership - Google doesn’t allow you to set a paid app as free, then charge for it again.

But how will you distribute your app without Google Play? SlideMe etc.?

It would still use Google Play, but the payments would be through another service (Paypal, Stripe, etc) to avoid the 30% fee. Evernote is the only app I can think of at the moment that does this (you pay for premium membership on their website), but you can still access all the premium features within the Android app.

From Android Developer:

In general, the terms of Google Play allow you to sell in-app subscriptions only through the standard payment processor, Google Wallet. For purchases of any subscription products, the transaction fee is the same as the transaction fee for application purchases (30%).

Apps published on Google Play that are selling subscriptions must use In-app Billing to handle the transaction and may not provide links to a purchase flow outside of the app and Google Play (such as to a web site).

I think Evernote may have a own deal with Google. Unless you are big as Evernote, changes are really slim to get your subscriptions through external pay gateways …

But the same page about billing also states the following:

If you sell subscriptions on a web site, for example, you can add your own business logic to your Android app to determine whether the user has already purchased a subscription elsewhere, then allow access to your content if so or offer a subscription purchase from Google Play if not.

So the best thing for you is to maybe provide both opportunities, and try to channel most users as you can through your website. So long as they buy throught the app, it must go through Google…

freemium is the future