publication . Article . Research . 2016

Creating Value Through the Freemium Business Model: A Consumer Perspective

Rietveld, Joost;
Open Access
  • Published: 25 Feb 2016 Journal: Academy of Management Proceedings, volume 2,016, page 11,073 (issn: 0065-0668, eissn: 2151-6561, Copyright policy)
  • Publisher: Academy of Management
  • Country: Netherlands
Abstract
textabstractThis paper develops a consumer-centric framework for creating value through the freemium business model. Goods that are commercialized through the freemium business model offer basic functionality for free and monetize users for extended use or complementary features. Compared to premium goods, freemium goods have lower barriers to adoption and allow end-users to accurately assess and act on their willingness to pay. On the other hand, convincing users to spend money on freemium goods is complicated by the positive relationship between price and perceived quality, and by the cognitive effort that is required to map willingness to pay to a menu of mic...
Subjects
free text keywords: Business model, Freemium, Demand perspective, Competition, Video games
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