A1 Journal article (refereed)
Willingness to pay for freemium services : Addressing the differences between monetization strategies (2024)
Tyrväinen, O., & Karjaluoto, H. (2024). Willingness to pay for freemium services : Addressing the differences between monetization strategies. International Journal of Information Management, 77, Article 102787. https://doi.org/10.1016/j.ijinfomgt.2024.102787
JYU authors or editors
Publication details
All authors or editors: Tyrväinen, Olli; Karjaluoto, Heikki
Journal or series: International Journal of Information Management
ISSN: 0268-4012
eISSN: 1873-4707
Publication year: 2024
Volume: 77
Article number: 102787
Publisher: Elsevier
Publication country: United Kingdom
Publication language: English
DOI: https://doi.org/10.1016/j.ijinfomgt.2024.102787
Publication open access: Openly available
Publication channel open access: Partially open access channel
Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/94426
Abstract
Freemium business models are a potential monetization strategy wherein companies can persuade consumers to buy premium services by offering a free version with limited functionalities and then benefitting by selling a premium version of the online service. Our empirical investigation followed a mixed-method approach and used meta-analytical data from 55 studies and 15 qualitative interviews. Based on these studies and interviews, we identify key factors influencing consumers’ willingness to pay for freemium services. Additionally, we test moderating effects across different monetization strategies (limited features vs. selling virtual items). The results reveal that the dimensions of perceived value (i.e., functional, hedonic, social, and price value), based on a free version of the service, serve as predictors for willingness to pay for freemium services. Trust in the service provider mediates the effects of dimensions of perceived value on willingness to pay for freemium services. The results also show that these relationships are influenced by the monetization strategy. This study contributes to existing literature by consolidating empirical evidence and offering valuable insights regarding willingness to pay for freemium services. The findings have implications for managers, helping them tailor their monetization strategies based on the type of freemium service.
Keywords: online services; business models; willingness to pay; consumers; services
Free keywords: freemium; online service; business model; monetization strategy; willingness to pay; mixed-method
Contributing organizations
Related projects
- Asiakaskokemuksen rakentuminen Metaversumissa
- Frank, Lauri
- Business Finland
Ministry reporting: Yes
Preliminary JUFO rating: 3
- Digital Business and Economy (focus area) (School of Business and Economics JSBE)
- Marketing (School of Business and Economics JSBE) YMA
- Emergent work in the digital era (University of Jyväskylä JYU) EWIDE
- Engineering (Faculty of Information Technology IT) OHTE; Formerly Software and Communications Engineering
- Value Creation for Cyber-Physical Systems and Services (Faculty of Information Technology IT) CPSS