Incentivizing Video-on-Demand Subscription Intention Through Tiered Discounts and Anti-Piracy Messages

Subscription video-on-demand (SVOD) platforms face high churn rates and substantial revenue losses from SVOD content piracy, all of which limit their ability to invest in acquiring/creating content compelling enough to win and retain subscribers. Based on social exchange theory, this study argues that platforms can improve relationships with SVOD content users by offering tiered discounts in exchange for advertising/loyalty and by promoting anti-piracy messages with a prosocial (threatening) approach that emphasizes harm to filmmakers (punishment for pirates). We hypothesize that these incentives enhance subscription intention when the incentive specifications (advertising levels, loyalty levels, message approach, and message credibility) match the public’s heterogeneous dispositions (advertising attitude, loyalty attitude, justice sensitivity, and fear of punishment). In a survey on the intention to subscribe to a hypothetical new platform, we confirmed the hypothesized interactions for advertising-based discounts, loyalty-based discounts, and prosocial messages, but did not find support for threatening messages. Further exploration showed that the evaluation of platform content was much more influential than any other incentive and that tiered loyalty discounts had a remarkable capacity to enhance subscription intention. This study’s findings may help shape incentives that are more satisfying to users and ultimately more profitable for platforms.