Escaping the free zone - What makes users pay for freemium online content?

Abstract

Purpose: Ensuring long-term revenue by turning free users to premium users and sustaining premium users are main challenges for all freemium service providers. This study investigates factors contributing to purchase intentions of free and paid consumers in the context related to freemium online media content (OMC) services. Originality/Value: The research contributes to existing literature by exploring the applicability of theory of planned behavior (TPB) and the technology-acceptance model (TAM) to predict purchase intentions towards Freemium OMC and extend the model by introducing five additional latent constructs, including, Added Value, Enjoyment, Brand Trust, Social Trust, and Free Mentality. To fill the gap in e-commerce research, this study examines purchase intention of ‘free’ and ‘paid’ users in the Freemium revenue model by exploring both groups of users in the analysis. Design/Methodology/Approach: The online survey was completed by 214 young adult Freemium OMC service users in Sweden. Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) were performed to test the model. Findings: The results indicate that attitude, subjective norm, and free mentality predict purchase intentions. Perceived behavioral control was found to be an insignificant construct. Among free users, subjective norm is the only significant driver of purchase intention. Regarding premium users, attitudes positively affect purchase intention, while subjective norm and free mentality have a direct negative influence. Implications: Our work suggests business practitioners focus on managing peer influence to improve the conversion rate among free users. Then, putting a primary focus on making the platform easy and enjoyable to use will create a positive attitude for premium users and maintain them in paying for the service.