Effects of the Subscription-Based Partitioned Pricing Strategy of Digital Content Platforms on User Willingness to Purchase

Abstract

This research explores how the partitioned pricing strategy of premium subscriptions affects user willingness to purchase with two studies. Study 1 finds that all-inclusive pricing is more effective than traditional partitioned pricing (i.e., partitioned pricing in Single) and the two new formats of partitioned pricing (i.e., partitioned pricing in Combination and partitioned pricing in Blind Box) in terms of increasing user willingness to purchase due to the induced higher perceived value and perceived price fairness. Study 2 further finds that partitioned pricing in Combination or partitioned pricing in Blind Box (vs. partitioned pricing in Single) can affect perceived value positively via perceived playfulness and negatively via user-perceived price complexity simultaneously. These indirect effects hold across hedonic and utilitarian digital content products. These findings contribute to the literature on the pricing strategies of subscription-based digital content platforms. This research also provides suggestions for digital content platforms to adopt that will help them design their partitioned pricing strategies effectively.