Many digital distribution platforms such as the iOS App Store and Steam have allowed content producers to operate the freemium business model. In this model, consumers can download a barebones version of a game or app for free, but then have to pay for additional features such as downloadable content or enhanced functionality. The freemium business model removes consumers’ barriers to adoption and allows consumers to more flexibly pay the exact amount of money they are willing to spend. Not surprisingly, the freemium model has taken off in the last few years: in 2016, 76% of all apps on the iOS App Store and more than 11% of the games released on Steam operated the freemium business model. We do, however, know very little about how the choice of this business model affects consumers’ willingness to spend time and money on digital content.
