# Analysis of Online Platforms’ Free Trial Strategies for Digital Content Subscription

*J. Theor. Appl. Electron. Commer. Res.*

**2023**,

*18*(4), 2107-2124; https://doi.org/10.3390/jtaer18040106

## Abstract

**:**

## 1. Introduction

Research question 1: Under what conditions should a digital content platform introduce a free trial promotion?

Research question 2: If a digital content platform chooses to introduce a free trial for promotion, how will the market conditions affect its decisions such as the optimal regular price of the subscription after free trial and the optimal length of free trial?

Research question 3: How will market asymmetry influence platforms’ decisions on free trial promotion such as the optimal regular price of the subscription after the free trial and the optimal length of free trial?

## 2. Literature Review

## 3. Model

#### 3.1. Market Symmetry

#### 3.1.1. Benchmark Case: No Free Trial in Market Symmetry

**Lemma**

**1.**

#### 3.1.2. Case 1: Free Trial in Market Symmetry

**Lemma**

**2.**

**Proposition**

**1.**

**Proposition**

**2.**

#### 3.1.3. Case 2: Free Trial in Market Symmetry with Network Effect

**Lemma**

**3.**

**Proposition**

**3.**

#### 3.2. Market Asymmetry

#### 3.2.1. Benchmark Case: No Free trial in Market Asymmetry

**Lemma**

**4.**

#### 3.2.2. Case 3: Free Trial in Market Asymmetry

**Lemma**

**5.**

**Proposition**

**4.**

**Proposition**

**5.**

## 4. Theoretical and Managerial Implications

#### 4.1. Theoretical Implications

#### 4.2. Managerial Implications

## 5. Conclusions

## Funding

## Institutional Review Board Statement

## Informed Consent Statement

## Data Availability Statement

## Acknowledgments

## Conflicts of Interest

## Appendix A

**Proof of Lemma**

**1.**

**Proof of Lemma**

**2.**

**Proof of Proposition**

**1.**

**Proof of Proposition**

**2.**

**Proof of Lemma**

**3.**

**Proof of Proposition**

**3.**

**Proof of Lemma**

**4.**

**Proof of Lemma**

**5.**

**Proof of Proposition**

**4.**

**Proof of Proposition**

**5.**

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**Figure 4.**(

**a**). Optimal price with respect to consumers’ learning rates (m = 12, r = 0.1). (

**b**). Optimal free trial length ratio with respect to consumers’ learning rates (m = 12).

**Figure 5.**(

**a**). Optimal price with respect to network effect intensity (m = 6, s = 0.1). (

**b**). Optimal free trial length ratio with respect to network effect intensity (m = 6, s = 0.1).

**Figure 7.**Threshold of consumers’ learning rates with respect to market asymmetry (m = 12, r = 0.1).

**Figure 8.**(

**a**). Comparison of optimal price (m = 6, s = 0.2, k = 0.8 and r = 0.1), (

**b**). Comparison of optimal free trial length ratio (m = 6, s = 0.2, and k = 0.8).

Notation | Definition |
---|---|

$\theta $ | Location on the horizontal axis |

$k$ | Intensity of location preference |

$\beta $ | Intensity of network effect |

$r$ | Ratio of free trial length over whole time length |

$m$ | Whole time length |

$d$ | Measure of market asymmetry |

${p}_{A},{p}_{B}$ | Price of subscription program for platform A and platform B |

${\pi}_{A},{\pi}_{B}$ | Revenue for platform A and platform B |

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## Share and Cite

**MDPI and ACS Style**

Chen, L.
Analysis of Online Platforms’ Free Trial Strategies for Digital Content Subscription. *J. Theor. Appl. Electron. Commer. Res.* **2023**, *18*, 2107-2124.
https://doi.org/10.3390/jtaer18040106

**AMA Style**

Chen L.
Analysis of Online Platforms’ Free Trial Strategies for Digital Content Subscription. *Journal of Theoretical and Applied Electronic Commerce Research*. 2023; 18(4):2107-2124.
https://doi.org/10.3390/jtaer18040106

**Chicago/Turabian Style**

Chen, Li.
2023. "Analysis of Online Platforms’ Free Trial Strategies for Digital Content Subscription" *Journal of Theoretical and Applied Electronic Commerce Research* 18, no. 4: 2107-2124.
https://doi.org/10.3390/jtaer18040106