So it depends a bit on what you are hosting, but a real concern for myself at least is the value that free users bring to your service.

I'm not talking about the costs of running your service to support them, but everything else. A part of your free userbase will expect the world for free and start demanding more, and as they outnumber your paid users by so much it can just be a huge distraction. The question is how many of these free users will convert to paying users?

I personally add a free tier to my products because I want to make the tool accessible to hobby and other small projects without a budget, but it's probably not a good business decision.

Something I've been considering: charge some small one-time payment, say $10, for a lifetime 'try-out' plan. Then when they want to upgrade to a subscription you give them that $10 as a discount for their subscription. It may filter those users that will never upgrade anyway.