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