Giants with Feet of Clay? An Inquiry into User Payment Patterns for Subscription Video-on-Demand Services

Abstract

Subscription video-on-demand platforms such as Netflix and HBO Max are being increasingly challenged by the widespread practice of sharing accounts with individuals outside the household. Platforms face a massive loss of revenue due to the opportunistic behavior of many users who enjoy content without paying anything or paying only a part of the required subscription fees. This study explores which factors influence platform users to pay all, part, or none of the subscription fees. Using a cross-sectional survey from Spain, various demographic, attitudinal, and behavioral factors were identified as predictors of the patterns of full, partial, and non-payment. The findings may help platform managers tailor some interventions to monetize a larger number of actual users by deterring the opportunistic payment patterns without discouraging the full payment pattern.

Authorized and Unauthorized Consumption of SVOD Content: Modeling Determinants of Demand and Measuring Effects of Enforcing Access Control

“…Indeed, social norms developed by consumers have been found to influence their ethical evaluation of digital piracy [24,25]. However, as unauthorized SVOD use tends to be more socially accepted than digital piracy [14], social norms' influence on unauthorized SVOD use should be specifically confirmed. Yet, a consistent relationship can be expected because unauthorized SVOD use and digital piracy coincide in using digital content without providing fair compensation to copyright holders.…”

“…The second option involves enjoying the full service without providing any additional compensation to copyright holders. Interestingly, previous research shows that ethical evaluation predicts the intention to subscribe to SVOD platforms [25] and sense of duty predicts the decision to pay the full cost of SVOD platforms [14]. Moreover, as having the experience of carrying out a certain behavior contributes to its justification, which in turn encourages its repetition [26,27], the use of a proprietary (non-proprietary) subscription can ease the use of additional proprietary (non-proprietary) subscriptions.…”

“…This status can be measured by both household income, an objective indicator that does not assess expenses and future expectations, and household financial situation, a subjective indicator of whether the available resources are perceived as sufficient to cover additional costs. We chose the second one because household income's predictive power shows mixed results, with a positive effect on the payment of copyrighted content [32] and no effect on the form of access to platforms [14], whereas financial situation perception has a notable influence on spending decisions [33] and more specifically on entertainment expenses [34]. Understandably, a better perceived financial situation will make it easier for users to sign up for additional proprietary subscriptions, regardless of the subsequent increase in the total cost.…”

“…In this situation, platforms could start tightening user authentication to hamper account sharing and ultimately encourage new subscriptions. However, such a decision could be a double-edged sword that would deter both authorized and unauthorized use of SVOD accounts [14]. Interestingly, shortly after our fieldwork, Netflix started forcing authentication for users accessing from an unusual location, but the impact of this decision on the number of subscriptions has not been made public.…”

Authorized and unauthorized consumption of SVOD content: Modeling determinants of demand and measuring effects of enforcing access control

“…In this situation, platforms could start tightening user authentication to hamper account sharing and ultimately encourage new subscriptions. However, such a decision could be a double-edged sword that would deter both authorized and unauthorized use of SVOD accounts [7]. Interestingly, shortly after our fieldwork, Netflix started forcing authentication for users accessing from an unusual location, but the impact of this decision on the number of subscriptions has not been made public.…”