Free apps and paid apps: monetization strategies for health apps in the Portuguese market

Abstract

Purpose: The rapid advancement of technology has transformed the health-care industry and enabled the emergence of m-Health solutions such as health apps. The viability and success of these apps depends on the definition of a monetization model appropriate to their specificities. In this sense, the purpose of this paper is to study the mechanisms of monetization of health apps, to stablish how alternative revenues determine if a health app is to be free or paid. Design/methodology/approach: Probability models are used to identify the factors that explain if a health app is free or paid. Findings: Results show that the presence of alternative monetization mechanisms negatively impacts the likelihood of a health app being paid for. The use of personal data to customize advertising (the monetization of “privacy capital”) or the inclusion of ads on the app are alternative means of monetization with potential to decrease the likelihood of a health app being paid for. The possibility of in-app purchases has a lower negative impact on the probability of a health app being paid for. The choice of platform to commercialize an app is also a strategic decision that influences the likelihood of an app being paid for. Originality/value: This work stands out for bringing together the two largest platforms present in Portugal and for focusing on the perspective of revenue and monetization of health apps and not on the perspective of downloads.