I don't view freemium as a business model, I view it as a distribution model. The distribution model changed from paid to free. This usually results in a user base that grows faster but pays less. By making the app free you've set an expectation of not having to pay. This attracts a certain type of customer, which are usually much harder to convert. If you're trying to build traction for investors this might not matter. If you are trying to monetize then this does matter.
The business model changed from a one time purchase model to a micro payment model. My recommendation would be to try a monthly payment model for v3. Let the users pay to access the service (setting an expectation to pay for value) but allow them to pay less than what you perceive to be the cost barrier (the amount you believe is the maximum amount they would pay to give it a try). I'm going to agree with others that you are priced too low. One of the best lessons I've learned is that it's not what you think it's worth, it's what your customer thinks it's worth.
The business model changed from a one time purchase model to a micro payment model. My recommendation would be to try a monthly payment model for v3. Let the users pay to access the service (setting an expectation to pay for value) but allow them to pay less than what you perceive to be the cost barrier (the amount you believe is the maximum amount they would pay to give it a try). I'm going to agree with others that you are priced too low. One of the best lessons I've learned is that it's not what you think it's worth, it's what your customer thinks it's worth.