TY - GEN
T1 - An empirical study of the freemium strategy for mobile apps
T2 - International Conference on Information Systems, ICIS 2012
AU - Liu, Charles Zhechao
AU - Au, Yoris A.
AU - Seok Choi, Hoon
N1 - Welcome to ICIS 2012, the 33rd International Conference on Information Systems. The conference theme -"Digital Innovation in the Service Economy"- reflects not only the heightened economic and social significance of the services sector, but also the transformational effects of information technologies. With its booming hospitality and tourism services, Orlando provides a perfect setting for the conference theme.
PY - 2012
Y1 - 2012
N2 - This paper examines the effect of the freemium strategy on Google Play, an online marketplace for Android mobile apps. By analyzing a large panel dataset consisting of 1,597 ranked mobile apps, we found that the freemium strategy is positively associated with increased sales volume and revenue of the paid apps. Higher sales rank and review rating of the free version of a mobile app both lead to higher sales rank of its paid version. However, only higher review rating of the free app contributes to higher revenue from the paid version, suggesting that although offering a free version is a viable way to improve the visibility of a mobile app, revenue is largely determined by product quality, not product visibility. Moreover, we found that the impact of review rating is not significant when the free version is offered, or when the mobile app is a hedonic app.
AB - This paper examines the effect of the freemium strategy on Google Play, an online marketplace for Android mobile apps. By analyzing a large panel dataset consisting of 1,597 ranked mobile apps, we found that the freemium strategy is positively associated with increased sales volume and revenue of the paid apps. Higher sales rank and review rating of the free version of a mobile app both lead to higher sales rank of its paid version. However, only higher review rating of the free app contributes to higher revenue from the paid version, suggesting that although offering a free version is a viable way to improve the visibility of a mobile app, revenue is largely determined by product quality, not product visibility. Moreover, we found that the impact of review rating is not significant when the free version is offered, or when the mobile app is a hedonic app.
KW - Empirical study
KW - Evidence
KW - Freemium strategy
KW - Google Play
KW - Market
KW - Mobile apps
UR - http://www.scopus.com/inward/record.url?scp=84886579126&partnerID=8YFLogxK
M3 - Conference article
SN - 9781627486040
T3 - International Conference on Information Systems, ICIS 2012
SP - 2069
EP - 2085
BT - International Conference on Information Systems, ICIS 2012
Y2 - 16 December 2012 through 19 December 2012
ER -