Abstract
An increasing number of digital content providers are considering ways to charge consumers for content that was previously free. A key question for these companies is whether a change in business model from one that is advertising-based to one that is subscription-based likely to generate more revenue? Hence, the purpose of the research is to profile consumers who are more likely to pay for online content and estimate the amount they are likely to pay. Data from a nationally representative probability sample of 755 internet users are used to estimate the model. The results indicate that while the estimated amount paid for digital content is related to income and education, willingness to pay is more related to age and gender. The findings have important implications for digital content providers who are evaluating the possibility of shifting from an advertising supported content-for-free model to a subscription supported pay-for-content business model.
Similar content being viewed by others
References
Bourreau, M., & Lethiais, V. (2005). Pricing Information Goods: Free vs. pay content. In E. Brousseau & N. Curien (Eds.), Internet and digital economics (pp. 345–67). Cambridge, UK: Cambridge University Press.
Buchanan, J. M. (1965). An economic theory of clubs. Economica, 32(125), 1–14.
Chyi, H. I., & Yang, M. J. (2009). Is online news an inferior good? Examining the economic nature of online news among users. Journalism and Mass Communication Quarterly, 86(3), 594–612.
Clemons, E. K. (2009). Business models for monetizing internet applications and web sites: Experience, theory and predictions. Journal of Management Information Systems, 26(2), 15–41.
Gefen, D., & Ridings, C. M. (2005). If you spoke as she does, sir, instead of the way you do: A sociolinguistics perspective of gender differences in virtual communities. Advances in Information Systems, 36(2), 78–92.
Jackson, L. A., Ervin, K. S., Gardner, P. D., & Schmitt, N. (2001). Gender and the Internet: Women communicating and men searching. Sex Roles, 44(5/6), 363–379.
Katz, M. L., & Rosen, H. S. (1991). Microeconomics. Homewood, IL: Irwin.
Larose, D. T. (2005). Discovering knowledge in data. Hoboken, NJ: John Wiley & Sons.
Pauwels, K., & Weiss, A. (2008). Moving from free to fee: How online firms market to change their business model successfully. Journal of Marketing, 72, 14–31.
Quinlan, J. R. (1992). C4.5: Programs for machine learning, Morgan Kaufmann, San Francisco, CA.
Stigler, G. J. (1961). The economics of information. Journal of Political Economy, 69, 213–225.
Van Slyke, C., Comunale, C. L., & Belanger, F. (2002). Gender differences in perceptions of web-based shopping. Communications of the ACM, 45(8).
Acknowledgments
The author gratefully acknowledges the financial support provided by the Connecticut Information Technology Institute (CITI) and thanks the Pew Internet & American Life Project for providing the data for the study.
Author information
Authors and Affiliations
Corresponding author
Additional information
Please address all correspondence to Girish N. Punj, Department of Marketing, School of Business, University of Connecticut, 2100 Hillside Road, Storrs, CT 06269-9013. Phone: (860)-486-3835; e-mail: Girish.Punj@business.uconn.edu.
Rights and permissions
About this article
Cite this article
Punj, G. The relationship between consumer characteristics and willingness to pay for general online content: Implications for content providers considering subscription-based business models. Mark Lett 26, 175–186 (2015). https://doi.org/10.1007/s11002-013-9273-y
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11002-013-9273-y