Creating and capturing value from freemium business models: A demand-side perspective

Joost Rietveld

Research output: Contribution to journalArticleAcademicpeer-review

88 Citations (Scopus)
256 Downloads (Pure)

Abstract

Research Summary: While it has long been recognized that the business model can be a source of performance heterogeneity, less is known about how the business model affects consumers' perceptions about a firm's products and services. By taking a demand-side perspective, I argue that business models create and capture value when the elements that compose a business model improve how consumers perceive a firm's products and better enable heterogeneous consumers to act on their willingness-to-pay. I develop theory on how the freemium business model competes with the premium business model and test hypotheses in the market for digital PC games. Results show that freemium games are played less and generate less revenues and that greater variety in games' menus of paid items is associated with higher revenues.
Original languageEnglish
Pages (from-to)171-193
Number of pages23
JournalStrategic Entrepreneurship Journal
Volume12
Issue number2
DOIs
Publication statusPublished - 13 Dec 2017

Research programs

  • RSM S&E

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