Factors Driving Mobile App Users to Pay for Freemium Services

With the popularity of smart mobile devices, mobile applications (most commonly referred to as an App) have gradually grown up to be a huge commercial market. Therefore, as the variety and download counts of Apps in the application stores of the two biggest operating systems increase, how to make a profit from Apps has become the most concerned issue for developers. Today the freemium strategy is widely observed in mobile App markets. Freemium is a business model by which an App is offered free of charge, but a premium is charged for advanced features. Hence, the purpose of this study is to explore the factors driving mobile App users to pay for freemium services based on value-based adoption model. An online survey was conducted to collect empirical data in order to test the research model. The results of PLS analysis indicate that an App user’s intention to pay is determined by perceived value, a thorough comparison of benefits and sacrifices, and trust of developer. Furthermore, perceived value will be affected by perceived effort and perceived usefulness while the App user has no experience on premium service. Finally, the implications for practitioners and researchers are discussed

Exploring social gambling: scoping, classification and evidence review

The aim of this report is to speculate on the level of concern we might have regarding consumer risk in relation to ‘social gambling.’ In doing so, this report is intended to help form the basis to initiate debate around a new and under-researched social issue; assist in setting a scientific research agenda; and, where appropriate, highlight concerns about any potential areas that need to be considered in terms of precautionary regulation. This report does not present a set of empirical research findings regarding ‘social gambling’ but rather gathers information to improve stakeholder understanding

The Effects of Social Value, Value for Money, App Rating, and Enjoyment on the Intention to Purchase the Premium Service of the Spotify App

The use of music streaming services has been proliferating all around the world, including in Indonesia. While being a leader in music streaming service, Spotify is not at their top performance lately due to having reached the maturity stage, and even shows a decline in the percentage of paid users as compared to the total users. Their growth has also slowed in the past five years. Strategic marketers claim that companies need to fully understand the needs of the consumers to create suitable products and therefore grow their company, and failure to do so is creating marketing myopia and problems. This research was done to find out the effect of social value, value for money, app rating, and enjoyment on the intention to purchase Spotify, specifically the premium version of Spotify. The sample was Spotify users who had been using Spotify for at least one month (both free and premium), aged at least 13 years old, who had a smart device, and were domiciled in Surabaya, Indonesia. 135 samples were used. All independent variables positively and significantly affected the dependent variable, both individually and as a whole. The most dominant factor was the value for money, followed by enjoyment, app rating, and finally, social value. The findings can be used to develop strategies to help improve the performance of freemium businesses, including Spotify. Keywords: app rating, enjoyment, music streaming, purchase intention, social, technology, value for mone

Investigating factors that affect willingness to pay an analysis on freemium social media apps

While social media has grown in popularity and usage in recent years, little is known about users' willingness to pay for the premium version of them. In this study, we investigate how consumers' perceived value is associated with their intention to use freemium services and to purchase premium content. We employ data gathered through an online survey (N=200) among the users of freemium social media networks, like LinkedIn, YouTube, Reddit and Flickr and tested 15 different hypotheses, using PLS-SEM. Firstly, we find support for the security hypothesis proposed in this study, indicating that if users value the security component of the freemium social media, they will have a higher intention to use the service overall. Secondly, the higher quality of the freemium service leads to higher usage intentions, which further leads to higher purchase intentions. Thirdly, the price value of freemium services shows to have a negative association with the intention to purchase premium content. Fourthly, social platform community is found to positively affect premium purchases. Lastly, we find support for the usage frequency hypothesis proposed in this study, indicating that if a user establishes a habit of using a social media, he will eventually decide to buy the premium version. The current study's findings contribute to the uniqueness of the freemium business model, implying that increasing perceived value of the freemium service, improving security, or increasing usage frequency can all contribute to and subtract from future profitability via increased retention on the one hand and reduced monetization on the other.Embora as redes sociais tenham crescido em popularidade e utilização nos últimos anos, pouco se sabe sobre a vontade dos utilizadores de pagar pela versão premium das mesmas. Neste estudo, investigamos como o valor percebido pelos consumidores está associado à sua intenção de utilizar os serviços freemium e de adquirir conteúdos premium. Investigamos os dados recolhidos através de um inquérito online (N=200) e testamos 15 hipóteses diferentes, utilizando PLS-SEM. Em primeiro lugar, encontrámos suporte para a hipótese de Segurança proposta neste estudo, indicando que os utilizadores que valorizam a componente de segurança nas redes sociais freemium terão uma maior intenção de utilizar o serviço. Em segundo lugar, a maior qualidade da rede social leva a maiores intenções de utilização, o que leva a maiores intenções de compra. Em terceiro lugar, o valor do preço dos serviços freemium mostra ter uma associação negativa com a intenção de compra de conteúdos premium. Em quarto lugar, observámos que a comunidade social afeta positivamente as compra da versão premium. Finalmente, encontrámos apoio para a hipótese de frequência de utilização proposta neste estudo, indicando que se um utilizador estabelecer o hábito de utilizar uma rede social freemium, acabará por decidir comprar a versão premium. As conclusões do presente estudo realçam a singularidade do modelo de negócio freemium, implicando que o aumento do valor percebido do serviço, a melhoria da segurança, ou o aumento da frequência de utilização podem contribuir ou subtrair da rentabilidade futura através do aumento da retenção ou da redução da monetização

Business Models in The Digital Goods and Service Industries: Research of Digital Businesses and Associated Value Capturing Mechanisms

This thesis examines the digital goods and services industry from the point of view of the common business models companies utilize to capture value from their products. As digital products have become an everyday part of life for more and more people globally, the underlying value capturing mechanisms that support the industry are deserving of extensive examination. These business models are found to be able to be divided into four categories of free offering, freemium, premium, and platform business models. This categorization is reflected by digital products in prominent markets like Google Play Store and the Apple App Store. A Meta-analysis of academic research data in combination with current statistics seemingly implies that the market for digital products is transitioning into further favoring initially free products over so-called premium business models with some differences between hedonic and non-hedonic digital products. A market largely devoid of initial monetary costs to consumers and which relies on non-monetary costs to consumers like advertisements as sources of revenues can have implications on both microeconomic and macroeconomic scale. On a small-scale, digital business models and their perceived trends influence the monetization and market entry to digital goods and services markets in general. On the broader scale, digital business models may even go as far as influencing the overall accuracy of GDP calculations by creating welfare not necessarily captured by traditional price indexes

Penerapan Strategi Freemium pada Aplikasi Permainan Ponsel Online

The number of smartphone users are significantly increasing as the technology developed. Many people use their smartphone to play online games. Mobile Legends: Bang Bang (MLBB) is one of the online games that has a lot of users, especially in Indonesia. MLBB is developed by Moonton, which uses freemium strategy to promote their game on applications store. This research’s objective is to find the freemium strategy’s effectivity and other important factors that increase the application’s in-app purchase. The methodology approach of this research is qualitative method. The data were collected by doing literature review and interview. The collected data were processed by coding technique. The research’s result shows that freemium strategy and other important factors could increase users’ in-app purchase intention

Cinema! : a proposition on how to design and position the game in the digital boardgame market

This master thesis evaluates the potential of a new product, a Digital Boardgame named Cinema!. The main objective of this study is to design and position the game in the Digital Boardgame market. The dissertation defines Cinema! relevant market, presents its main competitors, specifies its competitive advantages, proposes a segmentation and targeting strategies and, finally, suggests a go-to-market plan. The methodology included the development of interviews and an online questionnaire, the testing of the game prototype and Cinema!’s competitors with three focus groups, as well as, an analysis of the product development costs. Cinema! intends to be an original party game to play with friends and family. The game is the result of the founder’s passion for cinema and combines the best of the traditional boardgame and the digital markets. The long term vision is to go beyond cinema and extend this innovative digital boardgame to other areas, such as, sports and cooking. The size of the business opportunity is estimated to be 41,5 million potential users, in a market for game Apps valued at $1,629 billion (2016) and with an annual growth rate of 6,275The success of Cinema! depends on two key activies: product development and marketing. The prototype gameplay tests showed Cinema! has a great potential, presenting a challenging game mechanics and an appealing game design. However, every day 500 new Apps are launched, making it difiicult to stand out in such a competitive environment. Thus, the importance of the strategic marketing positioning developed in this thesis.A presente tese avalia o potencial de um novo produto, um Digital Boardgame - Cinema!. O objetivo da dissertação é sugerir uma forma de desenvolver o design e posicionar o jogo no mercado Digital Boardgame. O estudo define o mercado relevante do Cinema!, apresenta os seus concorrentes, especifica as suas vantagens competitivas, propõe uma estratégia de segmentação e targeting e sugere um go-to-market plan. A metodologia compreendeu o desenvolvimento de entrevistas e de um questionário online. Incluiu também o teste do protótipo do jogo e dos concorrentes com três focus groups, bem como uma análise dos custos de desenvolvimento do jogo. Cinema! é um party game para jogar com amigos e familiares. O jogo é o resultado da paixão do fundador por cinema e combina o melhor do mercado tradicional dos jogos de tabuleiro e do mundo digital. A visão de longo prazo é ir para além do cinema e estender a outras áreas de interesse, como o desporto. O potencial de utilizadores está estimado em 41,5 milhões, num mercado de game Apps avaliado em$1,43 biliões (2016), com uma taxa de crescimento de 6,275%. O sucesso do jogo depende de duas actividades chave: desenvolvimento do produto e marketing. A experimentação do protótipo mostrou que o Cinema! tem um grande potencial, apresentando uma mecânica de jogo desafiante e um game design apelativo. Contudo, cerca de 500 Apps são lançadas diariamente, fazendo com que seja dificil destacar-se da concorrência. Daí a importância da estratégia de posicionamento de mercado desenvolvida nesta tese

Entrepreneurship in indie app development: A case study on a Vietnamese indie mobile developer

This paper is a single case study aimed to explore the entrepreneurial process of a Vietnamese indie mobile developer in a real-life context during a three-year period. From the perspective of an insider, the researcher has kept track of the process through various observations, discourses and open interviews with this developer as well as through his personal narratives. By presenting and analysing this intensive case study with a narrative approach, the research sheds light on how a particular Vietnamese indie developer developed his projects and turned them into a promising source of income. The main focus of the study is to understand how an indie developer made a business from his apps, identify the challenges facing him, and the qualities he possesses in order to progress as a mobile application entrepreneur. This case study also contributes to a deeper understanding of technology entrepreneurship in a developing nation and makes way for further research into mobile application entrepreneurship

LEGAL ANALYSIS OF ENTERTAINMENT APPS IN APPLE APPSTORE USING BIG DATA

This research aims to analyze the competition and legal issues among entertainment apps in Apple AppStore. The samples of this study were 2400 apps that were included in the entertainment category. Big data analytics is employed in this study to analyze the competition among entertainment apps and measured by user’s minimum age, price, in-app purchase option, rate, and a number of raters; these factors are processed using hierarchical clustering. Another factor is the description of the apps extracted to keywords and processed using LDA topic modeling and text network to analyze the competition based on the offering products/contents. Hierarchical clustering resulted 7 clusters. The user’s minimum age that the apps’ developers commonly state is four years old. The apps are majority priced at IDR.0 or free, and the highest is IDR3.299.000. The price makes it the only app in cluster 4 because there are no other apps that have a price close to it. Cluster 5 contains free apps with good performance measured by good ratings, many raters, and an in-app purchase option. Ten topics resulted from LDA topic modeling that was further visualized by the text network. Text network shows that the words game, app, video, and image are the most common words that occur in most topics; these also have a high degree centrality and betweenness centrality.