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Freemium business model: construct development and measurement validation

Freemium business model: construct development and measurement validation Purpose– In recent years, the freemium model is popular with online users in internet markets. Regarding operation, the characteristics of the freemium business model are the focus of all websites and software managers. However, research lacks the literature on the development of the dimensions of the freemium business model and validation of measurement. Hence, the purpose of this paper is to probe into the development of the dimensions of the freemium business model and validate the measurement. Design/methodology/approach– First, by related literature and practical observations, this study reorganizes the characteristics of the freemium business model and develops dimensions and items of the freemium business model to design the items of scale. The development of scale is based on the procedures of standardized testing, including draft, expert consultation, and pretest and test analysis, in order to test the reliability and validity of the scale. This study treated online users as the questionnaire subjects and analyzed 1,016 valid questionnaires. Findings– Regarding empirical analysis, confirmatory factor analysis is conducted to test the internal quality of the model, including composite reliability, convergent validity, and discriminant validity. According to the empirical result, the freemium business model can be divided into basic free tier, two-sided markets, revenue sharing, service convenience, and network effect, which are the key factors of users’ selection of freemium products or services. This study developed 25 items of scale for the freemium business model. Originality/value– Finally, this study plans to develop a scale of the freemium business model, which can serve as an appropriate measurement tool to measure the freemium business model, as well as help websites and software developers to plan or execute the introduction of freemium products and services. Hence, it can develop and design products and services meeting the needs of online consumers. Website and software managers can adjust their products and services to satisfy online users’ needs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Internet Research Emerald Publishing

Freemium business model: construct development and measurement validation

Internet Research , Volume 26 (3): 22 – Jun 6, 2016

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References (83)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1066-2243
DOI
10.1108/IntR-03-2014-0064
Publisher site
See Article on Publisher Site

Abstract

Purpose– In recent years, the freemium model is popular with online users in internet markets. Regarding operation, the characteristics of the freemium business model are the focus of all websites and software managers. However, research lacks the literature on the development of the dimensions of the freemium business model and validation of measurement. Hence, the purpose of this paper is to probe into the development of the dimensions of the freemium business model and validate the measurement. Design/methodology/approach– First, by related literature and practical observations, this study reorganizes the characteristics of the freemium business model and develops dimensions and items of the freemium business model to design the items of scale. The development of scale is based on the procedures of standardized testing, including draft, expert consultation, and pretest and test analysis, in order to test the reliability and validity of the scale. This study treated online users as the questionnaire subjects and analyzed 1,016 valid questionnaires. Findings– Regarding empirical analysis, confirmatory factor analysis is conducted to test the internal quality of the model, including composite reliability, convergent validity, and discriminant validity. According to the empirical result, the freemium business model can be divided into basic free tier, two-sided markets, revenue sharing, service convenience, and network effect, which are the key factors of users’ selection of freemium products or services. This study developed 25 items of scale for the freemium business model. Originality/value– Finally, this study plans to develop a scale of the freemium business model, which can serve as an appropriate measurement tool to measure the freemium business model, as well as help websites and software developers to plan or execute the introduction of freemium products and services. Hence, it can develop and design products and services meeting the needs of online consumers. Website and software managers can adjust their products and services to satisfy online users’ needs.

Journal

Internet ResearchEmerald Publishing

Published: Jun 6, 2016

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