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Monetizing Freemium Communities: Does Paying for Premium Increase Social Engagement?

Authors: Bapna, R., Ramaprasad , J., Umyarov , A.

Publication: MIS Quarterly, 42(3), 719-735

Abstract:

Making sustainable profits from a baseline zero price and motivating free consumers to convert to premium subscribers is a continuing challenge for all freemium communities. Prior research has causally established that social engagement (Oestreicher-Singer and Zalmanson 2013) and peer influence (Bapna and Umyarov 2015) are two important drivers of users converting to premium subscribers in such communities. In this paper, we flip the perspective of prior research and ask whether the decision to pay for premium subscription causes users to become more socially engaged. In the context of the Last.fm music listening freemium social community, we establish, using a novel 41 month long panel dataset, a look-ahead propensity score matching (LA-PSM) procedure coupled with a difference-in-difference estimator of the treatment effect, that payment for premium leads to more social engagement. Specifically, we find that paying for premium leads to an increase in both content-related and community-related social engagement. Free users who convert to premium listen to 287.2% more songs, create 1.92% more playlists, exhibit a 2.01% increase in the number of forum posts made, and gain 15.77% more friends. Thus, premium subscribers create value not only for themselves by consuming more content, but also for the community and site by organizing more content and adding more friends, who are subsequently engaged by the social diffusion emerging from the focal user’s activities.

Read full abstract: MISQ, December 15, 2016

Published: 11 Jan 2017

The influence of IT and knowledge capabilities on the survival of university IT startups

Authors: Divinus Oppong-Tawiah, Yolande E. Chan

Publication: International Journal of Technoentrepreneurship

Abstract:

Published: 12 Dec 2016

Carlos Rodriguez awarded the Gunnar Hedlund Award 2015-2016

Carlos Rodriguez (PhD'15) has been awarded the Gunnar Hedlund Award 2015-2016 for his outstanding dissertation entitled "Global Subunit Specialization: An organizational perspective", which was recognized for its originality, as well as for its sound empirical work and practical results.

Published: 9 Dec 2016

$9.6M from Genome Canada

Genome Canada and its partners have awarded $9.6 million towards the assessment of the risks that toxic chemicals pose to the environment. The funding will support an interdisciplinary team of McGill researchers, including Professor Steve Maguire of the Desautels Faculty of Management, along with partners in industry, Environment and Climate Change Canada, and at the University of Saskatchewan.

Published: 9 Dec 2016

Pilot CEOs and corporate innovation

Authors: Jayanthi Sundera, Shyam V. Sundera, Jingjing Zhang

Publication: Journal of Financial Economics, Vol. 123, No. 1, 2017

Abstract:

Published: 6 Dec 2016

Social Media and Their Affordances for Organizing: A Review and Agenda for Research

Authors: Leonardi, P., Vaast, E.

Publication: Academy of Management Annals

Abstract:

Published: 5 Dec 2016

Robust optimal control with adjustable uncertainty sets

Authors: Xiaojing Zhanga, X., Kamgarpoura, M., Georghiou, A., and Lygeros, J.

Publication: Automatica

Abstract:

Published: 18 Nov 2016

Factors influencing cancer specialists' decision to collaborate with geriatricians in treating older cancer patients

Authors: Bagayogo, F.F., Lepage, A., Denis, J.L., Lamothe, L.,

Published: 3 Nov 2016

Suzanne Gagnon and Saku Mantere awarded 2016 SSHRC Insight Grant

Congratulations to Professor Suzanne Gagnon of Organizational Behaviour and Saku Mantere of Strategy and Organization on being awarded 2016 SSHRC Insight Grant" "Social Innovation in Human Rights, Equity and Diversity: Complex Systems and Discourses of Change".

Published: 24 Oct 2016