Social Influence on Being a Pay User in Freemium-based Social Networks

Social networks based on free plus premium (Freemium) business model offer basic services for free, while charging premium for advanced features with added value to a small subset of users. While a large loyal user base is indispensable, social connections and interactions with people paying for premium services may, to a great extent, influence the probability of free users to become pay users. We perform an empirical study on the probability of being a pay user under the social influence of pay users in the 59 million friend pairs of Flickr and 61 million friend pairs of Last. FM users, from the influence of pay users in the 40 million Flickr photo favorite interactions and from the influence of pay users in the 59 million Flickr photo comment interactions. With the same number of pay users in the three types of social influence, we find that influence from pay users in one's friend circle is overwhelmingly higher, followed by that from pay users in photo favorite interactions and that from pay users in photo comment interactions. The greater the number of pay users in the three types of influence, the more likely that a user would be a pay user, however there seems to be a limit upon which no additional benefit is reaped. The results can be used to help freemium-based social networks improve and promote the premium features, to attract more users to pay for it.