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In recent years, the freemium model is popular with online users in internet markets. Regarding operation, the characteristics of the freemium business model are the focus of all websites and software managers. However, research lacks the literature on the development of the dimensions of the freemium business model and validation of measurement. Hence, the purpose of this paper is to probe into the development of the dimensions of the freemium business model and validate the measurement.

First, by related literature and practical observations, this study reorganizes the characteristics of the freemium business model and develops dimensions and items of the freemium business model to design the items of scale. The development of scale is based on the procedures of standardized testing, including draft, expert consultation, and pretest and test analysis, in order to test the reliability and validity of the scale. This study treated online users as the questionnaire subjects and analyzed 1,016 valid questionnaires.

Regarding empirical analysis, confirmatory factor analysis is conducted to test the internal quality of the model, including composite reliability, convergent validity, and discriminant validity. According to the empirical result, the freemium business model can be divided into basic free tier, two-sided markets, revenue sharing, service convenience, and network effect, which are the key factors of users’ selection of freemium products or services. This study developed 25 items of scale for the freemium business model.

Finally, this study plans to develop a scale of the freemium business model, which can serve as an appropriate measurement tool to measure the freemium business model, as well as help websites and software developers to plan or execute the introduction of freemium products and services. Hence, it can develop and design products and services meeting the needs of online consumers. Website and software managers can adjust their products and services to satisfy online users’ needs.

The purpose of this study is to identify how the value dynamics of the freemium business model (BM) play out in a social enterprise.

We draw on a multiple case study of two social enterprises –one nonprofit (Aravind Eyecare) in Asia and one for-profit in Latin America (Biodent)– to analyze the implications of applying the value architecture of a freemium BM to social enterprises.

The freemium BM departs from standard practice when applied in social enterprises. Meaningful differences include the feasibility/desirability of converting free users to paying ones, the presence of significant variable costs –which requires balancing the ratio of free and paying customers– and the use of nontraditional pricing schemes to enhance value capture. The social freemium BM can increase scalability, value creation and value capture. Under this model, “beneficiaries” can be more than passive recipients of value and contribute to a venture's success in various ways –such as lowering its operational costs or enhancing its value proposition toward third parties.

While in the past years commercial enterprises have been disrupted by the emergence of freemium platforms, the social enterprise field has barely taken notice. We extract lessons and implications from this paradigmatic change for the theory and practice of business model innovation in social enterprises, of particular relevance to Latin America, where social and environmental disequilibria remain a recurring feat.

Identificar cómo el modelo de negocio freemium impacta el desarrollo de un emprendimiento social.

realizamos un estudio de caso múltiple de dos emprendimientos sociales –uno sin fines de lucro (Aravind Eyecare) ubicada en Asia y el otro con fines de lucro ubicada en América Latina (Biodent)– para analizar las dinámicas qué genera el modelo de negocio freemium en la arquitectura de valor de los emprendimientos sociales.

Cuando el modelo freemium se aplica a un emprendimiento social, surgen diferencias respecto de la práctica estándar en empresas comerciales. Estas diferencias incluyen la viabilidad/conveniencia de convertir a los usuarios gratuitos en clientes de pago, la presencia de costos variables significativos –que imponen la necesidad de equilibrar la proporción de usuarios gratuitos y clientes de pago– y el uso de esquemas de precios no tradicionales para mejorar la captura de valor. El modelo freemium social puede contribuir a facilitar la escalabilidad, así como la creación y captura de valor de un emprendimiento social. Bajo este modelo, los “beneficiarios” pueden ser más qué receptores pasivos de valor y contribuir al éxito de la empresa de diversas formas –por ejemplo, reduciendo sus costos operativos o mejorando su propuesta de valor.

En las últimas dos décadas, varias industrias sufrieron grandes disrupciones por el surgimiento de modelos de negocio basados en plataformas, como el freemium. Sin embargo, hasta ahora el campo del emprendimiento social parecía no haber tomado nota de este cambio paradigmático. En este artículo, extraemos lecciones e implicaciones de este cambio para la teoría y la práctica de los emprendimientos sociales. Nuestros hallazgos son particularmente relevantes para América Latina, en donde subsisten profundos déficits socio-ambientales.

The purpose of this article is to highlight the key points for succeeding with the freemium business model in online digital business from a strategic point of view. The freemium business model has recently become one of the most dominant business models in online markets. However, entrepreneurs and managers still have a limited understanding of why some freemium business models become successful and sustainable while others do not.

The findings and recommendations derive from the study of online digital companies and applications, which either succeeded or failed to develop a sustainable freemium model. These are LinkedIn, Spotify, Box, Eventbrite, Chargify, Gasketball and TravelCrony.

The article describes the generic strategy and the key strategic choices that enable and support successful freemium business model execution in an online digital business.

The research is limited to digital companies applying a freemium business model and offering their products and services online.

The findings and recommendations can help new and existing companies, first, to evaluate if the freemium business model is feasible for them, and second, to adjust strategies to develop a successful freemium business model and scale it up.

The article extends the current understanding of the freemium business model logic.

A rarely discussed type of indulgence good is “virtual” goods featured in freemium games, one of the most important platforms for online retailing. The freemium business model becomes popular amid the growth of mobile games and smartphones. The purpose of this research is to look into the factors that influence the intention to play freemium games and purchase in-game virtual goods, as well as to compare male and female millennial gamers in Indonesia, Southeast Asia's largest mobile gaming market. This research discusses the phenomenon in the context of compensatory consumption.

This quantitative research used an online questionnaire for data collections. A total of 275 millennial mobile gamers were selected via purposive sampling. In total, there are six factors incorporated in this research: utility, self-indulgence, social interaction, competition, the intention to play freemium games and the intention to pay for virtual goods. This research used structural equation modelling (SEM) via AMOS software to test the hypotheses.

This research reveals that (1) utility is a negative predictor of the intention to pay for virtual goods, (2) self-indulgence is a positive predictor of the intention to play freemium games, (3) there is a mediation effect of the intention to play freemium games on the relationship between self-indulgence and the intention to pay for virtual goods, (4) social interaction is a positive predictor of the intention to pay for virtual goods, (5) competition is a positive predictor of the intention to play freemium games, (6) there is a mediation effect of the intention to play freemium games on the relationship between competition and the intention to pay for virtual goods and (7) the intention to play freemium games is a positive predictor of the intention to pay for virtual goods.

This research has several limitations: first, half of the study’s millennial respondents were students whose gaming expenditures might depend on their parents or guardians' willingness to accommodate their gaming activities. Therefore, there might be some biases in the intention to pay for virtual goods. Second, the numbers of female respondents outweigh male respondents (44.4% males), hence the sample representativeness issue in a slightly male-dominated gaming industry in Indonesia. Third, the game genres the millennial respondents mostly played were the battle royale and the shooter games. Other game genres (e.g. puzzles) might involve a different mechanism. Lastly, the authors measured the compensatory consumption concept indirectly, such as by measuring variables associated with lack of time (utility), the need for virtual achievements or online recognitions (competition), mood-related issues (self-indulgence) and lack of belongingness (social interaction).

Game developers and online retailers (e.g. Google Play Store, Android App Store and Microsoft Store) should incorporate competition, indulgence and social interaction elements when designing and promoting freemium games. Based on the results of this research, a combination of these three elements improves the likelihood of purchasing virtual goods via online retail platforms

This is the first research to demonstrate a link between online retailing and compensatory consumption, particularly in the context of freemium games. This research extends the literature on online retailing in the context of freemium games, which has received little attention. In addition to theoretical support, this research provides new empirical evidence for previously unexplored and unsupported relationships.

Online services are increasingly utilizing gamification techniques to encourage consumer loyalty and engagement. However, the majority of the gamified services fail to be financially sustainable. Existing freemium and gamified services literature provides scant knowledge on behavioral predictors of in-app purchases in freemium gamified services. The research examines highly interactive consumers' in-app behaviors using competition-based motivational affordances, daily usage behavior and social competition motivation that convert them into super engagers.

The authors applied a multimethod approach by using Multivariate Logistic Regression (n = 685) to analyze in-app behavioral data and Qualitative Comparative Analysis (n = 94) to examine survey and in-app behavioral data of highly interactive consumers of a freemium gamified service to explain paying behaviors.

Results reveal highly interactive consumers that elicit heavy daily usage of the application or excel at in-app challenges are less likely to convert to super engagers. Among super engagers, some are socially competitive, and their inability to advance in the leaderboard corresponds to in-app purchases, while non-socially competitive consumers make purchases to collect extrinsic rewards. Additionally, highly interactive consumers who possess more knowledge about the gamified service become super engagers to increase their chances to be socially competitive.

This research examines in-app behaviors of highly interactive consumers of a freemium gamified service that lead to in-app purchases following varying levels of daily usage behavior and social competition motivation. The authors contribute to the previous literature by defining and examining a new consumer segment – super engagers – that is financially beneficial for freemium services because of their in-app purchases. The authors provide insight on in-app behaviors that convert highly interactive consumers to super engagers and demonstrate that the reason for highly interactive consumers to make in-app purchases is a function of acquiring specific internal and external rewards based on their level of social competition.

In specifically examining uses of freemium applications for children, this study aims to investigate the effects on user well-being after the experiential value by examining the influence of experiential value in terms of domain-specific innovativeness; the impact of domain-specific innovativeness in terms of child well-being; the moderating role of child socialization; and the relevance of contextual variables associated with media exposure during freemium game use.

The study is based on a survey of children who had downloaded freemium games on their smartphones. A total of 410 completed questionnaires were collected from children of 9 to 12 years of age. Confirmatory factor analyses and structural equation models were applied to examine and test the study hypotheses.

The results indicate that experiential value influences domain-specific innovativeness; domain-specific innovativeness is a significant predictor of well-being; parental materialism and communication with friends significantly moderates domain-specific innovativeness and well-being; and contextual variables do not influence the model.

Public policy managers should be cognizant of these results and should make every effort to prevent the identified relationships from becoming too strong, given the strong effect of domain-specific innovativeness on child well-being.

This paper contributes to the extant literature by incorporating experiential value and domain-specific innovativeness variables within a comprehensive model and by accounting for the effects of relevant contextual variables and the moderating role of child socialization.

The purpose of this paper is to study the details of new age digital business using a freemium business model.

Study of the various prospects of various digital business firms like revenues, customer base, share price, ranks. Uses of freemium business model to hold on to existing customers and attract new customers.

Innovative service or product offerings and growth strategy is the base of this business model. So businesses must assess innovation strategy before deciding whether to opt the freemium business model or not. Retaining the existing user and constant addition of new users are the founding stone of the freemium business model. So, the value offerings have to be well perceived by the customer so that switching costs will be increased for them and the customer will remain loyal.

Analyzing consumer behavior with recent analytical tools and techniques such as web analytics, bigdata analytics are required in order to get deeper market knowledge. It is crucial to get the knowledge of recent trends of markets, the perception of customer and customer’s journey mapping in order to run a business with freemium model.

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

The article describes the generic strategy and the key strategic choices that enable and support successful freemium business model execution in an online digital business.

The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations.

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The purpose of this study was to empirically investigate the role of e-service quality factors in predicting e-satisfaction. The study context was spirituality and well-being over-the-top services. The e-service quality factors consisted of perceived functional completeness, perceived performance, perceived quality of interface and interaction, perceived quality of content and information and perceived quality of customer support. The study goal was to ascertain over-the-top services customers’ behavioral intention toward upgrading to premium subscription and the spread of electronic word of mouth.

This study was based upon the integrated stimulus-organism-response framework where e-service quality represented the stimulus, e-satisfaction the organism, behavioral intention and electronic word of mouth as the response. The study used a moderated-mediation approach with e-satisfaction as the mediator and the price value of a premium subscription as the moderator. To empirically test the model, the authors collected data from 312 spirituality and well-being over-the-top services users in India. Partial least squares-structured equation modeling was used to analyze the collected data.

The findings of the study supported the association between e-service quality factors and e-satisfaction while using spirituality and well-being over-the-top service. The results furthermore indicated that satisfied spirituality and well-being over-the-top customers were willing to upgrade to the premium subscription and spread favorable electronic word of mouth. The moderated-mediation study results revealed that the price value of premium subscriptions moderated the relationship between e-service quality and e-satisfaction but did not moderate the relationship between e-satisfaction and behavioral intention, and e-satisfaction and electronic word of mouth.

This study offered a comprehensive stimulus-organism-response theoretical model by using the five e-service quality measurement factors as “stimuli” for motivating the internal state of spirituality and well-being over-the-top subscribers. This was toward sustained usage in over-the-top services subsequent to the end of the freemium period. Furthermore, in this study, both e-service quality theory and user satisfaction theory were integrated into the stimulus-organism-response model. This helped to better comprehend the impact of e-service quality factors in driving e-satisfaction among spirituality and well-being over-the-top service users.

This study revealed the significance of differentiating premium over-the-top subscriptions based on price value. To ensure a high level of e-satisfaction from a premium subscription, a greater emphasis on the e-service quality dimensions was required. This study provided insights to managers regarding the role of favorable electronic word of mouth in fostering effective customer acquisition.

This was one of the first studies which concurrently integrated perceived value of the premium subscription and e-satisfaction with customers’ behavioral intention and electronic word of mouth through the theoretical lens of stimulus-organism-response.

The purpose of this paper is to contribute to the marketing literature and practice by examining the effect of product pricing on consumer behaviours with regard to the assertiveness and the sentiments expressed in their product reviews. In addition, the paper uses new data collection and machine learning tools that can also be extended for other research of online consumer reviewing behaviours.

Using web crawling techniques, a large data set was extracted from the Google Play Store. Following this, the authors created machine learning algorithms to identify topics from product reviews and to quantify assertiveness and sentiments from the review texts.

The results indicate that product pricing models affect consumer review sentiment, assertiveness and topics. Removing upfront payment obligations positively impacts the overall and pricing specific consumer sentiment and reduces assertiveness.

The results reveal new effects of pricing models on the nature of consumer reviews of products and form a basis for future research. The study was conducted in the gaming category of the Google Play Store and the generalisability of the findings for other app segments or marketplaces should be further tested.

The findings can help companies that create digital products in choosing a pricing strategy for their apps. The paper is the first to investigate how pricing modes affect the nature of online reviews written by consumers.