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

• Autor(a) principal: Faria, Ana Margarida Tomé de
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/25765
• topic: Freemium; Social media networks; Quality; Preços -- Prices; Enjoyment; Advertisement; Segurança -- Security; Usage frequency; Media sociais -- Social media; Qualidade; Divertimento; Publicidade -- Publicity; Frequência de utilização

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.