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Willingness to pay for over-the-top services in China and Korea

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  • Kim, Min Sung
  • Kim, Eun
  • Hwang, ShinYoung
  • Kim, Junghwan
  • Kim, Seongcheol

Abstract

The increasing penetration of broadband and multiscreen availability has encouraged the development of premium video consumption through over-the-top (OTT) services. Netflix, the leading global OTT provider, is aggressively expanding its international operations and has ambitiously entered the Asian market. To prepare for the shift that the streaming service giant will bring, a proper understanding of consumer acceptance and intent to pay for OTT services is crucial. Therefore, this empirical study uses conjoint analysis to investigate the key attributes and to examine consumers’ marginal willingness to pay (WTP) for OTT services. We identified recommendation systems, resolution, and viewing options as important product attributes of OTT services that influence the WTP of Chinese and Korean consumers. The most important attribute for Chinese consumers of OTT services was resolution, followed by the recommendation system and viewing options. For Korean consumers, the recommendation system was ranked as the most valuable attribute, followed by viewing options and resolution. The overall WTP of Chinese consumers was 22.6 yuan (3.4 USD) per month, while Korean consumers’ intent to pay amounted to a total of 3530 won (3.1 USD) for OTT services.

Suggested Citation

  • Kim, Min Sung & Kim, Eun & Hwang, ShinYoung & Kim, Junghwan & Kim, Seongcheol, 2017. "Willingness to pay for over-the-top services in China and Korea," Telecommunications Policy, Elsevier, vol. 41(3), pages 197-207.
    • Handle: RePEc:eee:telpol:v:41:y:2017:i:3:p:197-207
    DOI: 10.1016/j.telpol.2016.12.011
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    3. Park, Sungwook & Kwon, Youngsun, 2023. "The Content Genre, Audience Share, and Presence of Public Sector Broadcasters in an Era of Overflowing OTT Services," 32nd European Regional ITS Conference, Madrid 2023: Realising the digital decade in the European Union – Easier said than done? 278115, International Telecommunications Society (ITS).
    4. Sangwon Lee & Soomin Joo & Jinyoung Park & Yoonjae Nam, 2022. "ICT Infrastructure, OTT Market Growth, Economic Freedom, and International Tourism: A Cross-Country Empirical Study," Sustainability, MDPI, vol. 14(19), pages 1-12, September.
    5. Ufuk Cebeci & Oguzhan Ince & Hulya Turkcan, 2019. "Understanding the Intention to Use Netflix: An Extended Technology Acceptance Model Approach," International Review of Management and Marketing, Econjournals, vol. 9(6), pages 152-157.
    6. Jang, Moonkyoung & Baek, Hyunmi & Kim, Seongcheol, 2021. "Movie characteristics as determinants of download-to-own performance in the Korean video-on-demand market," Telecommunications Policy, Elsevier, vol. 45(7).
    7. Choi, Heakeng Vivian, 2018. "The provision on Web accessibility and VOD access services for people with disabilities: A case study of South Korea," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190413, International Telecommunications Society (ITS).
    8. Qiuyu Lu & Noriaki Matsushima, 2023. "Personalized pricing when consumers can purchase multiple items," ISER Discussion Paper 1192, Institute of Social and Economic Research, Osaka University.
    9. Garima Gupta & Komal Singharia, 2021. "Consumption of OTT Media Streaming in COVID-19 Lockdown: Insights from PLS Analysis," Vision, , vol. 25(1), pages 36-46, March.
    10. Chen, Yi-Ning Katherine, 2018. "Customer Acceptance of IPTV After Service Failure," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190355, International Telecommunications Society (ITS).
    11. Park, Sungwook & Kwon, Youngsun, 2023. "Disentangling the effects on OTT platform performance of three strategies: Pricing, M&As, and content investments," Telecommunications Policy, Elsevier, vol. 47(8).
    12. Qiuyu Lu & Noriaki Matsushima & Shiva Shekhar, 2024. "Welfare Implications of Personalized Pricing in Competitive Platform Markets: The Role of Network Effects," CESifo Working Paper Series 10994, CESifo.

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